Making life tough for the super-rich will not solve our housing problem… what we need is sufficient housing for all, writes Paul Finch
It was good fun listening to Robert Adam defending the indefensible on Radio 4 last week, in a discussion with a very reasonable chap from the Royal Borough of Kensington & Chelsea. They were talking about curbing multi-storey basement development in the borough. Robert has some very rich clients who like doing this sort of thing and he needs to fight his corner. We can admire his understandable support of what they want, while noting that special pleading is just that.
In most of the country, expending millions of pounds on subterranean swimming pools, gymnasiums and safe rooms would seem crazy. Why not just buy a mansion and have it all above ground? But when it comes to central London boroughs, digging down has its attractions. For one thing, construction expenditure of £1,000 per square foot could generate increased value of £5,000 per square foot: not to be sneezed at.
And unlike companies trying to build homes for ordinary people, absentee owners, who are happy to annoy neighbours with construction noise for years while they relax in a property somewhere else, don’t have to pay community infrastructure levy. Nor Mayor Johnson’s Crossrail levy. Nor S106 payments. Nor do they have to supply affordable housing as part of their development. They don’t even pay much more, if anything, in ‘council tax’. Happy days.
Kensington & Chelsea is intent on curbing the activities of these people and councillors are trying their best to come up with policies which do not reject outright the idea of the multi-storey basement, but insist that they can only happen where work can take place without undue disruption to neighbours, streets and local communities. Proposed policies to make life acceptable for neighbours include strict limits on construction timetables, road closures and general disruption caused by major construction work. All power to their elbow.
The government could help by bringing in additional council tax bands, instead of the nutty Lib-Dem ‘mansion tax’ publicity gimmick. A swingeing tax-take in relation to capital values of the homes of the super-rich could make them think twice about precisely what they build. If properly structured, the taxes raised where you did indeed decide to allow permission could easily raise sufficient income to generate a few new homes in the borough.
There is a related problem in relation to the super-rich. That is the extent to which current borough housing targets make no allowance for the likelihood that in central London at least 40 per cent of supply is being taken up by overseas investors, who may not live here. Some commentators think that borough targets, set under the London Plan, should be related to ‘real’ homes for Londoners and find a way of identifying overseas buyers and remove what they have bought from the targets. This ideas has superficial attractions but in the end smacks too much of a butter-ration view of the world. More realistic might be to increase substantially the numbers required in local plans, taking into account the demonstrable extent to which markets in particular areas are about international investment.
Making life tougher for the super-rich in central London will not solve our housing problem. The truth is, if we don’t build enough, overseas investors will snap up what is available elsewhere in the capital. What we need to do is to ensure that there is sufficient housing for all, including investors, everywhere. This would take the sting out of price increases that inevitably accompany shortage, eventually bringing housing supply and demand back into balance. This would entail a massive programme for architects - including Robert Adam.