According to the FT:
Transport for London is to build 10,000 homes across the capital during the next decade as it turns to property development to raise £1bn of funding for the capital's underground system, trains and buses.
The group that runs London's public transport network has shortlisted 75 sites, spanning 300 acres in total, to use for building homes, as well as office and retail space.
So public authorities can't build houses?
It seems they can if the funding is available.
And if it isn't there is People's Quantitative Easing.
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Can they build affordable houses? As in, affordable on typical household incomes in the locality.
And will they choose to?
Also: there remains the threat if confiscation through right to buy.
Joined up thinking is in short supply in the UK. Here’s Steve Keen’s take on Osborne’s Fiscal Charter which is obviously the proverbial “big spanner in the works” that hinders the creation of affordable homes:-
http://www.debtdeflation.com/blogs/2015/06/19/are-surpluses-normal/comment-page-1/
My concern with this is that because we are in a bubble, the new homes will not be affordable and be at prices that reflect their asset value rather than their use value.
So these over-valued properties will just add to the growing debt problem in the private sector.
For too long we just seem to expect that building more houses will make them cheaper. But this does not happen in a bubble because the market is over-pricing it in order to bring forward future profits from assumed higher prices at the moment they are sold from development. It is also a way for the banks and estate agents to cream off money from say future rental income
Housing is weird in that it is a good but also an asset; I have yet to be convinced that it is priced solely as a good (that is, the more you make of it the cheaper it will be).
For those interested in this topic can I suggest that you watch the documentary called ‘The Flaw’ where some of these issues are explored very clearly.
This is not about raising funding for housing. This is about utilising their existing landbank to build properties which will generate £ 1 billion to fund the underground build out.
So?
All this shows is the poverty in our thinking about funding investment
As I thought I pointed out, if a little obliquely, it seems
Yes – that certanly resonates with me. It seems that we are more into incestuous forms of finance rather than PQE.
The more complex the money making trail, the fewer firewalls we may have between parts of it so if one part goes wrong, the other is adversely affected.
And let us be frank: there will be richer pickings for the City in the TFL proposal than simple money creation by a sovereign Government.
These houses will simply be bought by investors and cause more house price inflation -the source of the funding will, no doubt be part of the usual circle of financialisation.
An average of 1000 new homes a year then? That’s if they actually fulfill their promise.
Rather pathetic. Barely better than nothing.
I was using it illustratively, I stress
It does not say that the houses will be developed as social housing. Although many demolished for the projects were…..
And if they’re developed via commercial routes, they will not be subject to right-to-buy.
Why provide secure homes for people, who will then register to vote…but not for tories..
Better to have the private tenancy for six months, then goodbye and let to another six-monther (who will not bother to register to vote).
How many were not registered to vote in the gerrymandered election?
I note that labour has woken-up to the risk and is now actively seeking to have as many register as possible….
But it sill remains that changes to voter registration has led many to not register..
And who can forget the homes-for-votes scandal (another tory gerrymandering operation)
You have it backwards. They get the money from the home sales on their vast property portfolio. The profits are used to fund work on the underground. No need for PQE.
And where does the funding come from when the land bank is sold?
Richard-would Land value tax (pigs might fly) be a good source for such funding?
No
LVT needs to fund local authorities
For one crazy moment I thought that maybe TfL were building homes for their employees who couldn’t afford London prices.
I guess we’ll have to wait a few hundred years until the 1800’s for that sort of thing to happen.
There was a recent proposal on the edge of Newcastle to build 250 dwellings on 80 acres. It had swanky houses, little ones, lakes, footpaths, green open spaces, a planted mixed woodland, the lot. The residents’ association opposed it and it failed the planning process.
Here we have a plan in Greater London for 10000 dwellings on 300 acres. What are they planning to build at this density of over 30/acre? Matchboxes homes and punting flats no doubt. Been constricted to chaining your bike to a railing in the stairwell and having your e-cig on the balcony is no kind of life.
So you’d like balance
A third of an acre is definitely not balance
Nor is too small a house balance
But you offer no indication of the need for right judgement
What are they going to build?
Investments.
http://www.standard.co.uk/news/london/revealed-how-foreign-buyers-have-bought-100bn-of-london-property-in-six-years-a3095936.html
The value of UK plc is £10tr, of that at least £6tr is residential property. Most of that is land value, not bricks and mortar. We have the poorest housing stock in the developed world. All good public, and private, investment in infrastructure ends up in land value – we could collect all of that (eventually) for public benefit. Tax the land – it’s the only solution to the housing crisis. Thank goodness we now have a Shadow Chancellor who understands this.