Neil Garratt and Luke Robert Black: Stop building affordable housing – build subsidised instead

Neil Garratt AM is the Conservative Assembly member for Sutton and Croydon. Luke Robert Black MBE is the Chairman of the LGBT+ Conservatives and running for Newham Council.

If we ever want to have a sensible debate about making housing affordable, we must start by banning the phrase ‘Affordable Housing’.

Because on a leaflet, on a billboard or in a housing brochure, the word, ‘affordable’ conjures up visual images and unrealistic expectations – the most unrealistic of them all being that it’s housing that locals can actually afford.

The problem is, when normal people hear “affordable housing” they think it means “housing that normal people can afford on normal wages”. But it doesn’t mean that. It means is housing that one person is living in but where someone else is paying part of the cost.

So, really, affordable housing is subsidised housing. This either comes from the taxpayer, whose taxes are used to arbitrarily lower the cost to build a house – forcing developers to remove beauty, density and quality in the process. Or this is levied as a cross-subsidy, where those who pay the market rate for their property pay slightly more, chipping in a bit to subsidise someone else’s living room.

It’s like trying to get a table for a Sunday Roast at Guy Ritchie’s London pub. You still have to wait a year to get a table, and, you’ll still get an incredible roast, but you will be asked to pay 25 per cent extra to cover half the cost of the complete strangers sat next on the table next to you.

Would a name change upend the laws of supply and demand in London and suddenly emancipate hundreds of thousands of millennials priced out of Zone 5? Plainly, no.

But it would mean all future discussions, objections, reviews and, yes, Dante’s final circle of hell, planning committees, were done with more honesty, more transparency and more accuracy to the chronic need for housing in London.

Too often lack of ‘affordable housing’ is the reason councillors, activist groups, and even celebrities try to stop a development from going ahead. Very often residents are misled with what we believe is a deceptive phrase: “affordable housing”.

We think that this matters because the more who people who understand this, will help us to win over the necessary conversations on the door. We need to ensure that voters understand how ‘affordable housing’ can drive up planning costs and timelines, lose momentum with endless consultation and result in either less housing or more expensive housing. Neither of this helps affordability.

Furthermore, when incorporated into a London housing market where land costs are up, construction costs are up and housing delivery is through the floor, the viability of building almost anything is exceedingly low. In fact, house-building in London is down a shocking 84 percent since Boris’ Mayoralty. This is a terrible legacy for Sir Sadiq, whose city is no longer viable for building – with Molior reporting that across 50 per cent of the city, no new housing development is viable for developers.

We are both London Conservatives. Hailing perhaps from different parts of the party/city, but, yet, uniquely sharing identical views about housing, development, growth, supply and demand. We both have seen countless good developments blocked, reduced in size or delayed for the need for more affordable housing. We share in the misery many in the ‘Tory Yimbysphere’ feel, when something beautiful and abundant in supply is scuppered.

Because if we make this symbolic change, it means that every time a housing development is blocked, stunted, reduced or delayed for lack of subsidised housing, it’ll require the council, its residents and the developer to be honest about the trade-offs. It’ll require us to be honest about how much the property will cost, who it is really costing and the return on investment that the so-called ‘evil’ property developer will make on it.

As Conservatives, we support businesses making profits, and it’s crucial to incentivise property developers to build. Criticising every profit made by organisations like Barratt Homes, L&Q, or the Peabody Trust, is both myopic and self-defeating.

We know that is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, or in this case our housing, but from their regard to their own interest. That’s always been the case. UK business profits always benefit the public – that’s always been the case too. We see this through pensions, job creation, and even your MoneyBox ISA.

But housing profits offer even more immediate and visible advantages, leading to new amenities such as restaurants, community centres, schools, healthcare facilities, gyms, bars, and local job opportunities, all of which enhance both community and purpose.

Because if developers make a profit, they are more incentivised to build communities and, importantly, increase their risk appetite. By ensuring stronger returns, we are more likely to see more diversity, more beauty and, chiefly, higher quality homes for Londoners. Isn’t that what we all want?

Banning the misleading phrase “affordable housing” for the honest, down-to-earth “subsidised housing” won’t get us there in a single bound, but it will mean everyone knows what we’re talking about.