Section 106 agreements increase land values and hence housing costs. Instead, land needs to be specifically designated for affordable housing, argues Matter Architecture’s Roland Karthaus
The first London Plan was published in 1943 by Patrick Abercrombie. It is an amazingly ambitious and beautiful document which should be read as a piece of propaganda as much as policy. The timing was significant: four years into the war, it was intended as the light at the end of the tunnel; the upside of widespread destruction was that the city could be replanned. We now view this idealistic form of planning as unrealistic and utopian, but rather than replacing it with a realistic model, we have rowed back to a form of planning that is as absurdly vague as the Abercrombie’s was optimistically precise.
Abercrombie plan communities map 1942
The recent draft Affordable Housing and Viability Supplementary Planning Guidance (SPG) presages the next iteration of the London Plan. The reference to ‘genuinely affordable housing’, reveals a loosening grip on reality and a frustration at the inability of planning to deliver affordable housing. The current model, in which affordable housing is secured via Section 106 as a condition of each planning consent, is effectively a land-tax, and has helped drive up land values, making all housing less affordable. ‘Genuinely’ affordable housing, delivered through a reinforcement of the same mechanism will only ever achieve the same result. To understand this trajectory and to consider an alternative, we need to rediscover what existed before.
In the late Victorian period, the industrial revolution was well advanced, but working-class housing had hardly changed. Then, spanning the turn of the century, a wave of industrial philanthropists became the driving force behind mass social housing as we know it, providing for the basic needs of workers that in turn would ensure the economic health of the city. Now we face a similar crisis, as London is unaffordable for the average person. But a city is more than a simple economic engine; a truly healthy city is one that people can be born in, grow up in, work in and die in. Social housing was not invented in Britain by Victorian philanthropists but much earlier by the church. Scattered across the country are almshouses, owned by hyper-local charities that provided truly affordable housing for the elderly and infirm. Now, they could offer part of the answer to a new revolution in affordable housing.
Affordable housing is in fact a land tax, which makes land more expensive and therefore more valuable
The prohibitive cost of housing in London is not mainly due to construction cost, but to the value of the land it sits on. The London Plan fails to grasp this basic fact, and any additional requirements placed on the development of a piece of land can only ever ‘wash through’ into the land value. Developers may say that affordable housing is a development tax but in fact it is a land tax, which makes land more expensive and therefore more valuable.
In the era when council housing was predominant, central tax was used to subsidise the land, funding councils to buy it and rent out the housing at a reduced cost. In the late 1980s and 1990s, the baton was passed to housing associations, many of them former Victorian Philanthropic organisations, with funding still flowing from central tax. Over the past two decades, this has changed and many housing associations have effectively become commercial developers, serving a particular market. They still have many subsidised tenants, but most new developments do not provide significant truly affordable housing (hence the new ‘genuinely affordable’ terminology). This is because they have to compete with commercial developers for the same land, while central (plus some GLA) funding has become relatively minor in the process.
Alms house, woburn by imoen
In each era of housing innovation, land has been key: the church owned land within its parish, which gave it the security to build almshouses; the industrialists developed new areas of the city, next to their industrial estates, on low-value or undeveloped land; councils took advantage of bomb-sites (free demolition).
London today is not a dense city and there is plenty of development land, but it has complex ownership and other constraints and most of all, it is expensive. If we are genuine about affordable housing, then planning has to proactively designate land accordingly. To some this will seem like heresy; the dominant argument is that only increasing values drive development, but this is the current trap we are stuck in – the London Plan viability assessment assumes that land is bought and sold at commercial rates and the land value is the ‘base’ for viability. In an escalating market, that means affordability is always out of reach.
Planning policy needs to enable almshouse charities to expand and take on the baton of affordable housing
But myriad alternative models, predating planning, still persist in London, including almshouse charities that own land. But their activities are legally restricted to the provision of means-tested affordable housing for the elderly. Other community housing organisations have similar, albeit less ancient remits. Planning policy needs to develop a framework that enables these organisations to expand and take on the baton of affordable housing that now needs to be passed on.
Designating land for affordable housing might seem to counter the agenda of mixed tenures, but in a city that is unaffordable to the average person, precisely the opposite is true. As we no longer live in an industrial era and the city is not simply a giant factory, we also have to look beyond affordable housing being primarily for workers. The economy of London is an intricate network, connecting all ages and income levels and our population is getting older, while remaining active.
Matter Architecture is currently working with an almshouse charity. Its constitution and assets means that we can redevelop its existing land to provide heavily subsidised (less than 50 per cent of market rent), spacious homes for vulnerable elderly people, together with their friends and neighbours who support one another. The homes are designed to promote health and wellbeing, allowing them to live there for longer and reducing the burden on health and social services. We are working with the housing managers and the existing residents so that the new buildings can accommodate them well into the future. All of this is only possible because of the charity’s constitution and land ownership.
We’re also working with speculative developers to design high-quality housing, and we believe this form of development will remain important. The issue is that as a model, it can’t provide for all the diverse needs of housing in a city and shouldn’t be expected to. Planning has a significant role to play in giving a leg up to these alternative models. The mayor has said he will make London ‘a city for all’. His planning policies need to help deliver that.
Roland Karthaus is a director at Matter Architecture