Does this Glorious Victory Mean an End to Council House Building?

Across the country, schemes requiring an element of social (or affordable) housing have been negotiated. Usually, these take the form of 30%-35% social/affordable housing with the larger portion, 65%-70% being sold or let at commercial levels.

Both social and affordable rents require a subsidy from the taxpayer.

Labour in Newham took the courageous decision to increase the number of social/affordable properties required from 35% to 50% of all commercial new-builds. Social rents are roughly 50% of commercial rents and affordable rents are around 80%.

This did not go down well with developers.

Of course, in the minds of the Labour Left and the Greens, these developers are rapacious blood suckers, intent only upon grinding down the poor of urban London. Hidden taxation is a way to redress the balance and redistribute some of their ill-gotten gains to the poor, (and to the council).

Newham’s waiting list is one of the longest in London (roughly 34,000 at the moment). And the demand for low cost rented housing continues to far outstrip supply.

Thus, it was that Newham Labour identified a way to kill two birds with one stone. How to build more houses for social rent and undermine the voracious capitalists who made a fortune off the need for housing.

It was a piece of cake.

This went into the corporate plan, and was then bumped out. The fly in this particular jar of ointment was commercial reality.

Developers do not normally receive a subsidy to build council houses. They are built under a s106 agreement, or more likely, a community infrastructure levy. This imposes a cost on the developer as the price for planning permission.

As long as the developer can make a profit, he will build. If there is no profit, there will be no development. As noted above, the commercial realities have determined that the split is somewhere in the 35%:65% to 30%:70% range in most places.

But Newham was not constrained by economics. Or so it seemed.

When reality struck, instead of fixing the figure of 50% in the corporate plan, Mayor Fiaz sought to water down the commitment she made to the electorate a year before.

Green councillor, Nate Higgins, has repeatedly challenged her on this. Embarrassing the mayor on the promise she reneged on so quickly is all a part of politics.

But, not content to expose the hypocrisy and idiocy of the promise, it seemed that Cllr Higgins was determined to reinstate the promise and to get it enshrined in the corporate plan. Thus, on Monday 12th December he (they?) proposed a motion to council seeking to get the 50% requirement written into the plan. He (they?) was joined by two from the Momentum rump in the Labour Party, Cllrs John Whitworth and Sasha Das Gupta.

Whitworth and Das Gupta offered an amendment to reaffirm “our adherence to the manifesto commitments which are 50% social housing on all development sites”.

The amended motion was passed, with all councillors of all parties voting in favour.

Well done. A glorious victory.

What all of this student union style posturing does to increase the number of council or affordable homes is doubtful.

Let’s be as clear as we can be. If the costs of development make building projects unviable, they will not be built.

Thirty percent of 100, means thirty new homes for those on the waiting list. Fifty per cent of nothing, is nothing.

This administration has two and a half years to get some new homes started. Our prediction is that they will struggle if they are tied to this policy, not because the aims are not admirable, but because the economics are against it. Of course, they could always throw money at developers and that would get new social/affordable homes built. Former councillor Ken Clark did just this in Upton Park and the Royal Docks, but that does require that you have cash to spend.

Newham Labour have been dragged by the nose (again) by the Greens and their own left wing because nobody was prepared to ask whether this policy was likely to increase or reduce the number of social/affordable homes being built in the borough.

So, our questions to Labour and the Greens and the Independents are:

• Would you prefer 30% of something or 50% of nothing? and

• How many new homes for social or affordable rent do you commit to getting built in the current term?

When the first (unsubsidised) 50/50 development goes ahead, we’ll happily eat our collective hats. Until then we will look on whilst adolescent posturing takes the place of politics.

“There is more to the doing, than merely willing it be done.”