How Boris keeps selling off chunks of London housing to rich investors

1:16 pm - October 23rd 2013

by Darren Johnson AM    

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Boris Johnson loves property investors because they help developers build homes. But homes for whom? The reality is that these expensive homes benefit rich investors and developers far more than ordinary Londoners, who are seeing their city sold off chunk by chunk.

Today I asked the Mayor about One, The Elephant, a 37 storey tower block with 284 flats built on council owned land. He signed it off last November, and launched the construction on site this August saying it would “bring quality homes into the area”.

But its studio flats will start at £330,000, and were marketed in Hong Kong and Singapore before they went on sale in London. That price is twelve times the average income in Southwark, and even further from the incomes of residents in the Elephant area.

There is no affordable housing at all, just a contribution towards some affordable homes elsewhere in the local borough of Southwark.

In the officer’s report to local councillors, the reason was clear. If they mixed affordable and private housing together, it would have “significant implications on the values of the private residential properties” – the developers wouldn’t get as much profit because investors don’t want flats next to the hoi polloi of London.

Some developers have actually put separate entrances and lifts in for affordable housing, like servants having to enter via the back door in Edwardian times. But the council officer’s report said the “practical and financial implications” ruled this out.

Elephant and Castle used to be called the ‘Piccadilly of the South’, and at the moment seventy per cent of the residents in the area live in secure, affordable social housing. In the new “regeneration” projects around the Elephant, only eight per cent will be social housing.

Londoners just get crumbs from the property feast, as I argued in a detailed report published last month.

The Mayor should threaten to refuse these applications unless they offer enough affordable housing. He should also lobby for taxes on investors to damp down demand, for a social housing budget big enough to actually meet London’s needs, and for regulation to stabilise private rents.

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About the author
This is a guest post. Darren Johnson is chair of the London Assembly and deputy chair of the Business Management and Administration Committee. He represents the Green Party.
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Story Filed Under: Blog ,Housing ,London Mayor

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Reader comments

1. Paul peter Smith

Am I the only one who thought the housing benefit cap had more to do with clearing the proles out of prime real estate than it did with any sort of parity with real incomes?

Just a couple of corrections:

1. The ‘One the Elephant’ development made an in-lieu affordable housing contribution of just £3.5m when it should have paid more than £30m if it were to comply with Southwark’s planning policy. The reason it got away with paying much less is due to its claim that viability issues would not allow it to pay more. The viability figures remain confidential and not even councillors on the planning committee are allowed to see them.

2. Instead of building affordable housing elsewhere, Southwark decided to put the £3.5m towards the £20m cost of building a replacement leisure centre on the site of the development – albeit a much smaller one than the one which used to be there now that half of the site will be occupied by a gigantic skyscraper.

“There is no affordable housing at all, just a contribution towards some affordable homes elsewhere in the local borough of Southwark.”

I don’t see what is wrong with this in principle…depending on the size of the contribution!

Yet again there seems to be confusion here.

The meaning of the words social and affordable are different in respect of housing. They are different and are not interchangeable. Please note.

I’ve said it before and I’ll say it again.
If all the poor people have been moved out of large cities to poorer/cheaper parts of the country, when the rich get old and infirm who are they going to get to wipe their arses? How is anyone going to be able to take such a job and live within commuting distance?

Since public land exists for the benefit of the public, and belongs to the public, surely it can ONLY be used for the public to use and benefit from…

..not the MATES OF THE CORRUPT, like johnson and his thieves.

I live in Vancouver, BC, and this has been happening for YEARS. I grew up here and have watched housing prices soar due to the influx of Hong Kong investors buying as much land and real estate as they can. Many of us, who were born and raised here, and now have young children, can no longer afford to live in the neighbourhoods we grew up in. We are having to move away from the city in order to buy a home that isn’t a tiny box in a high-rise and even those are becoming unattainable for the average person in the city. So, beware, this will only get worse and tensions and resentment will start boiling up, if it hasn’t already. I love the city of my birth and now it has become a place I can only visit from time to time. Good luck 🙂

On Twitter I find out our Country’s media is under Section D Notice of the Offical Secrets Act, put on by Prime Minister Cameron. So we cannot find out his family Trust has links with the drug laundering money, investigated by the FBI. Coutts the Queen’s Bankers, and HSBC are also involved.

How can he get away with this?

Duncan Thorburn

I know it sounds a bit Upstairs Downstairs to have separate lifts for the affordable housing, but it’s usually done to keep the cost of the service charges down for residents of the affordable housing. The private flats might have a 24-hour concierge and all sorts of additional ‘luxury’ services – these make service charges high, unaffordable to those on lower incomes. So by designing a building with two separate entrances you can avoid this. I agree that it’s not very egalitarian, but it’s for practical reasons too.

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