From the Evening Standard:
Sadiq Khan has ordered Transport for London to sell off surplus land to property developers at below market value to ease the housing crisis. The Mayor instructed transport chiefs to dispose of an unused site at Kidbrooke in Greenwich at a “financially disadvantageous” price where 400 new homes will be built. The move means that more land owned by TfL — equivalent to the size of 16 Hyde Parks — could be sold off at a cut price to house-builders.
We know that Khan is a big friend of the developers and so on, but is he mad?
No of course not, in reality he is not selling anything at undervalue:
Tories urged Mr Khan to drop his campaign promise that 50 per cent of new homes built on public land should be affordable because it would drive down the value of the land.
Making some developers sell houses cheaply to long-term residents or selling them to housing associations to let for slightly below market rents is one of those politically appealing ideas (nonsense in practice, but there we are).
So clearly, if the 'developer' can only make a killing on half the finished units and a normal commercial profit (cost-plus) on the other half, the amount he will bid for the land is halved. TfL's loss is the next owner's or tenant's gain. But as this is an auction - and again assuming that the Mayor holds them to their promise rather than quietly shelving it after a couple of years - those developers are in fact paying full market value.
So really, the Tories are challenging Khan's pledge for 50% affordable. The only way to get the maximum price when selling is to chuck the affordable homes idea straight in the bin. AFAICS, Khan was elected on the basis of these pledges, and he is perfectly entitled to stick to them. The Tories hate the poor, especially tenants, and want prices and rents to be as high as possible*. So the Tories are weaselly enough to waffle on about value for the taxpayer with higher prices and rents as an unfortunate side-effect.
* So does Labour, of course. The irony being that the Tories' own Mayoral candidate promised something similar:
So, if I’m Mayor, I will set a simple rule that any homes built on mayoral land – as many as 30,000 – will only be sold to Londoners – people who have lived or worked in London for at least three years and don’t already own a home. My “Londoners First” rule will be in force for the entire first year that the houses are on sale. It can be delivered because on mayoral land the Mayor sets the rules.
This policy is not quite as bold as Khan's but if actually enforced (ha!) would also have led to developers paying less for ex-TfL land.
Wednesday, 24 August 2016
From the Evening Standard:
My latest blogpost: Another classic bit of Home-Owner-Ist DoubleThinkTweet this! Posted by Mark Wadsworth at 20:46