Social value and London's housing
In the shadow of the Mile End road looms an ornate clock tower. The clock belongs to a mid-Victorian workhouse, whose high walls later gave way to a pre-war psychiatric unit, and finally to a more modern NHS children’s hospital. The last patients left, the clock stopped ticking, and the site sat dormant for more than a decade. Until this year, when work started to transform the fine listed buildings of the former St Clement’s hospital into the UK’s first urban community land trust and, perhaps, one of the clearest examples of ‘social value’ in public policy.
For many years, governments around the world have sought to codify ‘social value’, most recently in France following the Stiglitz Commission and, of course, the UK with the Public Service (Social Value) Act. Social value is one of those concepts that everybody supports but few can easily define. Broadly, as the Public Service Act suggests, it could be said to be the social, environmental and economic benefit (or cost) of a decision. The London Plan is the central expression of the GLA’s duty to consider these impacts in planning policy, and the current alterations to it set out the latest assessment of London’s increasing housing need.
These alterations suggest that London’s housing requirement needs to rise from the current target of 32,000 homes a year to 49,000. Given that actual housing output has only averaged around half of this increased total in the last thirty years, the challenge of this task is significant, not least because ensuring that the city’s population can access housing that is well designed, safe and, crucially, affordable, is possibly the greatest ‘social value’ that can be created.
Indeed, ensuring a supply of housing that is affordable to ordinary working Londoners is integral to keeping London a successful city. By this I mean not just a city where units are churned out and it is assumed that needs are therefore met, but one where people of all incomes can afford to live in reasonable proximity to each other and with a reasonable quality of life. It is a challenge that all successful global cities, from New York to Hong Kong, need to address.
Given London’s acute housing shortage, decisions in housing invariably raise questions about what we might call their relative ‘social value per pound’ benefit, with the continuous need to balance resources between relieving overcrowding or homelessness, supporting those who are lowest paid or those in greatest need.
There are some measures that have powerful social value multiplier effects. The release of surplus public land, for example, such St Clement’s hospital which was a GLA-owned site. It will now provide more than 200 homes through a unique public-private-community partnership, which will see some of the homes sold at prices based on local incomes and the freehold of the site transfer to the ownership of a community foundation.
Or the purpose-built rented homes to be built on GLA owned land in the London Borough of Newham, through an unusual legal covenant, supported by the planning system, which means around a third of the homes are held in the long-term for market rent, attracting more patient capital from pension funds as well as long-term stewardship, in an echo of the Great Estates.
Or the grant allocated to housing associations to support new house building, with the great strength of not-for-profit housing associations being that their surpluses are ring-fenced for reinvestment, although we need to get more of this reinvestment into new supply as quickly as possible.
Social value can also be created through providing specialist housing for older people in London. For example, the GLA runs the Seaside and Country Homes scheme, which helps older Londoners who want to downsize to move to suitable homes outside the capital and, in doing so, they free up larger properties that can then be re-let to those who need them. This is a low-cost but high-impact policy with enormous social value. And, while still a comparatively young city, the number of older people living within the capital is set to grow, with those over 64 projected to increase by almost two thirds to reach nearly 1.5 million by 2036, including almost 90,000 more who are over the age of 90.
For too long, public policy inadequately responded to the needs of an ageing population, not least (until the HAPPI report) in terms of housing and its design. The model of sheltered accommodation, with its proliferation of red emergency cords, is no longer adequate for a more active older population. Older households often aspire to live in more urban locations, where services and public transport are more accessible and communities arguably more vibrant and diverse. Further, the focus on homes to rent is not necessarily suitable for a generation familiar with the financial benefit that often comes with owning property.
This presents an opportunity for both policy makers and providers. London has two hundred town centres and an increase in modern, well-designed housing products for older Londoners should form an integral part of their ongoing regeneration. Built within mixed communities it can help to contribute to rapid and successful place-making, integrating the latest telehealth technology, improving the experience and sustainability of the homes for occupants as well as providing more cost-effective care for health services.
Of course, part of the challenge is to align the costs and savings across the public sector at a local level, illustrating the wider challenge of strengthening the link between housing and health, and ensuring opportunities to make this connection, such as the redevelopment of surplus NHS land, are not missed. It also requires new providers to enter the market with innovative products and, potentially, changes to taxation to help move from need to demand from consumers.
In London, the Mayor has announced £30m of funding, in partnership with the Department of Health, to increase the supply of purpose-built quality homes for older and disabled people. The first phase of this programme has allocated funding to 35 supported housing developments to deliver almost 700 specialist, high quality homes. The development of specially designed housing of this kind will give older and disabled Londoners homes that are better suited to their individual needs, improving quality of life as well as reducing costs on other budgets. Again, the social value multiplier effect ripples out from housing investment decisions like this.
Looking to the future, new and innovative policies in the recent London Housing Strategy suggest more ways in which the GLA could deliver its housing targets, but with even greater emphasis over broader, socially valuable objectives. Housing Zones, which focus resources in a flexible and bespoke way in a specified area, offer an opportunity, if bidding boroughs want, to look at new ways to deliver housing in London. One option that Housing Zones could explore would be ‘End to End project management’. This is an approach that mirrors the successful approach taken in the development of New Towns such as Milton Keynes and the Olympic Park in Stratford, and builds on a widely used model of housing development in Europe.
In this model, the public sector assembles large sites for new development and works with local communities to masterplan them according to local needs. The public sector could either be a sole landowner through the acquisition of sites itself, or be part of a joint venture with other partners. Housing sites within this masterplan would then be parcelled up for a range of developers – including smaller developers and groups of custom builders – to build out at the same time, broadening access to housing for groups often excluded from building and buying in the market.
The multiplicity of developers can help to accelerate development, complementing the work of volume builders elsewhere, with the potential for the public sector capturing the increase in value created by this process. The public sector can take a longer term approach to community development, control through the planning system, land ownership and developing the masterplan, which lends itself to greater incorporation of social value objectives.
This approach is necessarily large-scale and long term. However, one only needs to look at the new communities rising from once contaminated industrial ground in Stratford to see how it can deliver homes for a range of housing needs as well as ensuring that social value can be added throughout the whole process. The Olympic Park model of land assembly and master planning is one that could be replicated across Housing Zones in London.
While social value may often be hard to define, it is tangible, and embedding it into housing investment and policy helps create homes in genuinely sustainable and empathetic communities, not just housing units. The GLA has a range of planning and housing policy levers that it can pull to achieve it, and London has the opportunities in land and capacity to deliver it, as the clock being re-started at St Clement’s demonstrates.
Richard Blakeway is London’s Deputy Mayor for Housing, Land and Property