Questions of power

Originally posted on May 9 on Inside Edge 2, my blog for Inside Housing

The May elections have a common theme when it comes to housing: can the winners really do what they say?

From Sadiq Khan to Marvin Rees, from Nicola Sturgeon to Carwyn Jones and from council leaders all over England to the voters of St Ives, winning the elections last week was the easy bit. The hard work starts now.

I’ll start with the poll closest to me: the referendum in St Ives on a Neighbourhood Plan that will ban the building of new second homes that has brought national attention.

More than 80% of residents supported the plan last Thursday and it’s impossible not to sympathise. Around a quarter of the homes in St Ives are either second homes or holiday lets and the problem is even worse in other Cornish communities. That does not just price out locals it also means a lack of year-round residents that makes it hard to sustain vital services and infrastructure.

Against that, there is already talk of a judicial review by a local firm of architects, I’ve also heard a theory that the Neighbourhood Plan will not be legally enforceable because Cornwall does not have a Local Plan, and it’s not hard to think of ways for a second home owner to evade the ban.

Ministers complain that St Ives is using the Localism Act in ways that the government never intended, raising the prospect of legislation to stop other places following suit. Just like local choice over Right to Buy or forced sales of council housing, it seems that banning second homes is the wrong kind of localism. Brandon Lewis is meeting the local MP today to talk about it but his government steadfastly refused the case made by the area’s previous MP to create a system in which anyone converting a home into a second home would need planning permission.

And even if the ban does come into force, what difference will it really make? People will still want a second home but the demand will transfer to the existing housing stock, driving up prices for local people. The ban may reduce the price of land but new developments will be harder to finance when they can only be sold to locals. And nimbyism will still be a problem on the edges of town: the same town council that called the referendum was an objector to a plan for more than 200 new homes that would have provided 50% affordable housing.

But St Ives is doing what it can within the limits of its legal powers about a problem that most local people believe is at the heart of the housing crisis. The same is true of London and not just because foreign investment raises the same issues as second homes in St Ives. Sadiq Khan takes over as mayor with a clear mandate to tackle the crisis that was the main issue in the campaign but the same limits on what he can actually do about it.

His manifesto promises to ‘break the homebuilding logjam by setting up Homes for Londoners – a new and powerful team at the heart of City Hall – and building an alliance of all those with a stake in building new homes for Londoners’. So far, so good, and his emphasis on those homes being ‘genuinely affordable’ (including for social rent) offers the prospect of a much better balanced housing programme for the capital.

Yet key elements of that programme will come up against the limits of both his powers and what the market can deliver. On new homes, can he really achieve his target of 50% affordable housing or will it just hold back supply? Can he really promote social rent at a time when central government seems hell bent on destroying it? Can building on brownfield land while ‘protecting the green belt’ really deliver the new homes London needs in the long term?

On private renting, Khan proposes a London-wide not-for-profit lettings agency and the naming and shaming of rogue landlords. His plan for a London Living Rent (rents set at a third of local average wages) looks no more than an aspiration as far as private renting goes and he can only ‘make the case to government’ for London-wide landlord licensing.

On estate regeneration, he will require that it ‘only takes place where there is resident support, based on full and transparent consultation, and that demolition is only permitted where it does not result in a loss of social housing, or where all other options have been exhausted, with full rights to return for displaced tenants and a fair deal for leaseholders.’ That’s an important statement that protestors will hold him to but he will also face significant pressure from central government and developers.

Marvin Rees, the new Labour mayor of Bristol also won an emphatic victory after an election campaign featuring the same housing issues as in London. He starts with the advantages of a big personal mandate and of a Labour majority on the city council and his priorities include a new council company to deliver 2,000 new homes a year (800 of them affordable).

However, like Khan he lacks powers to do much about private renting. Like London, Bristol is surrounded by Green Belt and by Conservative local authorities that will resist new development. Unlike Khan, he has no control over finance for new affordable homes. And because he is the wrong type of mayor – a city rather than government-approved metro mayor – Bristol may be unable to benefit from Manchester-style devolution of funding in future.

Devolution means that Wales and Scotland have many of the powers that English mayors lack. The Labour government in the Welsh Assembly introduced tenancy reform, homelessness prevention and landlord licensing in its last term. It is just short a majority this time but is still expected to press ahead with plans to abolish the Right to Buy and build 20,000 affordable homes in the next Assembly term.

The SNP government in the Scottish Parliament had already ended the Right to Buy and no-fault eviction in the private rented sector. After last week, it will also be a minority government but it is committed to an ambitious target of 50,000 affordable homes over five years, including 35,000 for social rent. To put that in perspective and allowing for far greater population, that’s the equivalent of an English government pledging 100,000 affordable homes a year.

Both governments offer examples of what can be achieved with powers to make laws and control investment. Both still have to operate within the restrictions of austerity and tax and welfare policy imposed from London, although Scotland’s more generous devolution settlement gives it more scope to act on issues like the bedroom tax. Both are still grappling with the implications of further devolution that presents threats well as opportunities.

Housing will be a huge challenge for both countries and even more so for the new mayors. They will need all their powers of persuasion and leadership to make progress on such a complex issue and they will also face growing pressure for solutions they may not have power to deliver or that have timescales that do not fit with the electoral cycle.

The experience of Bill de Blasio, the mayor of New York who was quick to congratulate Khan as ‘a fellow affordable housing advocate’, shows that success can be an elusive commodity. For all the new ideas on offer, it may depend as much on making the existing system work better and on making outcomes for their cities fairer as it does on eye-catching new initiatives. Given the direction of policy from Westminster, these would be achievements in themselves.

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