Wednesday, 24 August 2016

Another classic bit of Home-Owner-Ist DoubleThink

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.


Bayard said...

"So does Labour, of course."

Is that New Labour, aka Tory-lite, or new Labour as represented by the likes of Messrs Corbyn and McDonnel?

Mark Wadsworth said...

B, not those two, on matters housing and LVT they are right on.

I am talking about the Labour MPs, MSPs and the London Mayor (and probably a lot of local councillors) who are desperate to get rid of them, and the bulk of Labour voters (not necessarily members) who are Homeys (not the hundreds of thousands of Corbyn supporting actual Labour members).

Rich Tee said...

An acquaintance of mine who is a committed socialist recently announced that he is going to become a landlord by letting out his house and moving abroad.

I don't trust any of them. Precious few of them on the left seem to understand that Marx was opposed to landlords because they exploit the poor.

Mark Wadsworth said...

RT, I knew somebody like that as well (who actually moved abroad) and plenty of English lefties who talk about "going into property". It's not just lefties though, Home-Owner-Ism cuts across political, class and religious boundaries.

Bayard said...

God know why Marx thought the English would make the best Communists. Every tenant carries a landlord's rent-book in his knapsack.