London Mayor announces plans to boost affordable housing in Olympic Park

London Mayor announces plans to boost affordable housing in Olympic Park

Earlier this month, Sadiq Khan announced that 3,000 new homes will be developed across three new neighbourhoods in London’s Olympic Park. London’s Mayor intends for 50% of these new homes to be affordable.

In light of this announcement, we take a closer look at the record of affordable housing planning in Olympic Park, and consider what Khan’s announcement may mean for the thousands of households in need of social housing in boroughs near the Park.

Who was meant to benefit from Olympic Park housing?

Prior to 2012, the Greater London Authority and the Olympic host boroughs — Barking & Dagenham, Greenwich, Hackney, Newham, Tower Hamlets and Waltham Forest — vowed that the Olympics would leave a positive legacy for East London’s communities.

One assertion that lives on in the memory is that development in Olympic Park, and its peripheries, would be ‘for the benefit of everyone who lives [t]here’. Here, ‘everyone’ ostensibly covered East London’s low-income and socially marginalised communities.

On a housing front, this publicly stated ambition translated into ensuring that post-London 2012, Olympic Park delivered a significant amount of housing. This included genuinely affordable housing that would meet the needs of the thousands of households on the host boroughs’ respective social housing waiting lists.

Number of households on the social housing waiting list, 2009 – 2017[1]
2009 2010 2011 2012 2013 2014 2015 2016 2017
Barking & Dagenham 11,411 11,376 12,223 13,671 11,596 11,024 13,579 6,704 6,795
Greenwich 7,902 7,066 6,972 11,656 12,490 11,375 11,468 11,562 12,826
Hackney 11,461 11,956 13,423 14,171 15,090 7,926 10,715 11,238 12,372
Newham 28,649 31,851 32,045 30,975 24,179 15,582 16,755 17,453 25,729
Tower Hamlets 19,681 22,707 23,128 23,406 24,428 20,425 19,783 19,124 18,616
Waltham Forest 14,341 15,624 16,153 21,864 25,054 20,635 15,405 8,306 8,795

Indeed, a 2013 housing needs assessment for Olympic Park and its peripheries emphasised that this area has an ‘extremely high total affordable housing requirement of amounting to more than 100 percent of planned dwelling delivery in the study area.’ Essentially, this report identified that from a needs-based perspective, a 100% affordable housing target was required.

What housing has been planned and delivered so far?

The London Legacy Development Corporation (LLDC) — the body set up in 2012 to oversee planning and delivery of development in the Olympic Park area — published a Local Plan in 2015 which set out a programme for delivering 24,000+ homes within their boundary.

Despite the evidenced need for an ambitious affordable housing target, the LLDC settled on a 35% target. The LLDC settled on this after conducting a site-level viability assessment. In the LLDC’s words, this assessment: ‘used comparison of residual land values to a range of development options and proportions of affordable housing to appraise whether residential development is capable of generating competitive returns and thus whether a scheme is viable.’

The LLDC effectively stated that affordable housing delivery should not inhibit developers from gaining competitive returns – 20% profit. The 35% affordable housing target enabled the LLDC to achieve this aim.

A more detailed breakdown of the LLDC’s affordable housing target is provided below.[2]

This breakdown crucially highlights that the LLDC’s Local Plan only planned for 10.5% (or 2,520) of new homes in their boundary to be social homes.

These affordable and social housing plans for Olympic Park have translated into the following affordable and social housing plans for the first three Olympic neighbourhoods.

Agreed affordable housing targets for first three Olympic neighbourhoods[3]
Neighbourhood Total units Overall affordable housing target Social rented units target Affordable rented units target Intermediate units target
Chobham Manor 828 28% 8.5% 8.5% 11%
East Wick Approx 870 30% 9% 9% 12%
Sweetwater Approx 650 30% 9% 9% 12%

These targets mean that of the 2,348 homes to be delivered across these three neighbourhoods, around 680 homes will be affordable. Approximately and only 207 of these homes will be for social rented housing.

A key factor behind such low levels of social housing being planned for is the much-diminished government grant that was available for affordable housing whilst developments deals were agreed for these neighbourhoods (between 2012 and 2014).

Notably, this was a period when government slashed the affordable housing budget for 2011-2015 to £4.5bn. This is nearly half the £8.4bn budget allocated for 2007 to 2010, which was a shorter period.

The low levels of social housing now being delivered across these sites raises concerns about whether Olympic-related housing development will greatly benefit low-income and socially marginalised communities in East London.

What is the Mayor’s response?

To redress this issue, Sadiq Khan announced this month that he’ll use all tools at his disposal to realise a 50% affordable housing target across the remaining three new Olympic neighbourhoods — Stratford Waterfront, Pudding Mill and Rick Roberts Way.

Subject to planning permission, approximately 600 new homes will be built at Stratford Waterfront, 1,500 homes at Pudding Mill and 900 homes at Rick Roberts Way.

So, approximately 1,500 affordable homes will be delivered across these three sites.

To realise this 50% affordable housing target, ‘the Mayor will invest housing and infrastructure grants and proposed funding of around £10m of City Hall funding a year over 20 years.’

The Mayor’s financial commitment was positively received by Newham’s Mayor, Rokhsana Fiaz and the London Assembly member for City and East, Unmesh Desai.

This welcome commitment demonstrates the necessary role that long-term public sector investment, alongside strong planning and lower land values, plays in enabling a serious programme of affordable housing delivery.

Addressing social housing need?

Despite his financial commitment, the Mayor stopped short of indicating the proportion of this affordable housing that will be delivered as social homes.

The level of social housing delivered within the remaining Olympic neighbourhoods will likely serve as a vital test for those questioning whether government’s affordable housing funding can ensure the delivery of the quantity of social housing that is needed in London.

Just as crucially, the results will act as barometer for whether Olympic Park housing will have played a serious part in addressing the housing needs of East London’s low-income and homeless households.

In a context where Newham, Waltham Forest, Tower Hamlets and Hackney were in the top 10 local authorities with the highest levels of homelessness, we hope that the Mayor will fight for as much social housing as possible within Olympic Park.

 

[1]Data is drawn from MHCLG Table 600: Numbers of households on local authorities’ housing waiting lists, https://www.gov.uk/government/statistical-data-sets/live-tables-on-rents-lettings-and-tenancies

[2]Data is drawn from the LLDC’s Local Plan Background Paper: Housing.

[3]Figures are based on a LLDC approved section 106 agreement for the Olympic Park site.

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