Good transport links will be the foundation of new homes for London

Not enough of these. Image: Oli Scarff/Getty.

The latest in the Future of London series, presented by Transport for London.

This time: how can we solve the capital’s housing crisis?

Ask a random group of Londoners what is the biggest challenge for the city and most will agre: housing. People are increasingly being priced out of inner London, and “generation rent” are wondering if and when they will ever be able to get on the property ladder. Recently, we’ve even heard stories of young Londoners relocating to Berlin, where property is cheaper and globally mobile jobs are available.

The problem is being compounded by population growth. London now has 8.6m residents – more than at any time in its history – and is predicted to reach 10m by 2030. That gives the city a monumental challenge: building the homes to house 1.4m more inhabitants when there’s already a housing crisis.


The city has a housing target to build 49,000 homes a year. Meeting that target means building 4,000 homes a month, or one home every 10 minutes.

The next mayor, elected in May 2016, will have to work round the clock to solve the housing crisis. If they don’t, it could cost the economy £35bn over the next 10 years.

The next mayor isn’t going to put a hard hat on, get their shovel out and build the houses themselves, but they will have a good toolbox with which to work. In the UK, London’s mayor has unmatched powers over strategic planning and, crucially, an integrated transport network, to unlock land for development. If combined with a clear vision and leadership from City Hall and supported by national government, London can deliver the homes Londoners need.

One of the pressing questions is deciding where the houses should be built. Mayoral hopefuls are looking at options including building outside the city’s boundaries, capitalising on opportunity areas, densifying parts of inner London and developing town centres in outer London. They are also looking at using parts of public sector-owned land to create homes.

Connecting homes with jobs

For each strategy considered, the next mayor will also need to look at effective transport links, which are fundamental to unlocking housing potential and to London’s economy.

The most productive workers in the country work in central London. The firms they are employed by need to recruit from a wide pool of candidates, with many commuting from across the South East to work there. Seventy-nine per cent of workers in central London travel into work by train, and they travel further than commuters across the rest of Britain.

But the jobs they do are often globally mobile, making the imperative of providing affordable homes even more pressing. Seventy-three per cent of London businesses think that the current housing shortage poses a risk to the city’s economic future. Firms looking for global headquarters will consider risks like that when they look at locating in London.

Economic activity unlocked by Crossrail 2 would deliver a sum more than sufficient to pay half of the scheme’s costs

Meanwhile, firms locating in outer London will also expect their employees and customers to be able to access them easily. This requires an effective road network and connections for people cycling, walking and using local bus services.

Good transport links are therefore vital to unlocking the developments which are needed to address the housing shortage and maintain London’s competitiveness. Crucially, the housing they unlock can help to fund the transport schemes themselves.

Under the capital’s control

The planned extension of the Northern line, running from Kennington to Battersea, is being funded in part by the developers building on the land around it. The area is expected to deliver 16,000 new homes for London. A further 24,000 homes could be built around Old Oak Common, an area set to benefit from improved links on the London Overground and High Speed 2 lines, while new bus and cross-river rail links could unlock 11,000 new homes at Barking Riverside.

Another scheme that could be part-financed by Londoners is Crossrail 2, with the capital funding more than half of the cost of the scheme. Economic activity unlocked by Crossrail 2 would deliver billions of pounds of net additional tax receipts, a sum more than sufficient to pay half of the scheme’s costs. It could support 200,000 new homes across London and the South East, deliver transport and regeneration benefits, and support around 60,000 jobs across the UK during construction.


With the equivalent of two full Tube trains of people being added to London’s population every week, the city cannot afford to let Crossrail 2 sit on the drawing board. If Crossrail 2 is given the go ahead, work could start by 2020 and be finished by 2030. 

London’s next mayor will have the powers to unlock new housing, and will undoubtedly have a strong mandate from voters to do so. By integrating new developments with the existing transport network, improving links and ensuring that the right financing for projects is in place, the next mayor can deliver thousands of new homes.

But their capacity to push forward and finance schemes like Crossrail 2, which could transform housing supply across the city, still lags behind competing cities like Berlin.

To catch up, giving the mayor more powers to plan for the long-term and secure funding, could transform the city – and have a dramatic effect on whether Londoners will face the same challenges in years to come. 

The future of London series is supported by Transport for London, and commissioned by CityMetric. You can see the other articles at the following links:

"What will the capital look like in 20 years time?" The powers the capital needs to thrive

"Data helps us provide better transport": an interview with Shashi Verma, TfL's Director of Customer Experience, about big data and new methods of payment

 
 
 
 

Businesses need less office and retail space than ever. So what does this mean for cities?

Boarded up shops in Quebec City. Image: Getty.

As policymakers develop scenarios for Brexit, researchers speculate about its impact on knowledge-intensive business services. There is some suggestion that higher performing cities and regions will face significant structural changes.

Financial services in particular are expected to face up to £38bn in losses, putting over 65,000 jobs at risk. London is likely to see the back of large finance firms – or at least, sizable components of them – as they seek alternatives for their office functions. Indeed, Goldman Sachs has informed its employees of impending relocation, JP Morgan has purchased office space in Dublin’s docklands, and banks are considering geographical dispersion rather concentration at a specific location.

Depending on the type of business, some high-order service firms will behave differently. After all, depreciation of sterling against the euro can be an opportunity for firms seeking to take advantage of London’s relative affordability and its highly qualified labour. Still, it is difficult to predict how knowledge-intensive sectors will behave in aggregate.

Strategies other than relocation are feasible. Faced with economic uncertainty, knowledge-intensive businesses in the UK may accelerate the current trend of reducing office space, of encouraging employees to work from a variety of locations, and of employing them on short-term contracts or project-based work. Although this type of work arrangement has been steadily rising, it is only now beginning to affect the core workforce.

In Canada – also facing uncertainty as NAFTA is up-ended – companies are digitising work processes and virtualising workspace. The benefits are threefold: shifting to flexible workspaces can reduce real-estate costs; be attractive to millennial workers who balk at sitting in an office all day; and reduces tension between contractual and permanent staff, since the distinction cannot be read off their location in an office. While in Canada these shifts are usually portrayed as positive, a mark of keeping up with the times, the same changes can also reflect a grimmer reality.  

These changes have been made possible by the rise in mobile communication technologies. Whereas physical presence in an office has historically been key to communication, coordination and team monitoring, these ends can now be achieved without real-estate. Of course, offices – now places to meet rather than places to perform the substance of consulting, writing and analysing – remain necessary. But they can be down-sized, with workers performing many tasks at home, in cafés, in co-working spaces or on the move. This shifts the cost of workspace from employer to employee, without affecting the capacity to oversee, access information, communicate and coordinate.

What does this mean for UK cities? The extent to which such structural shifts could be beneficial or detrimental is dependent upon the ability of local governments to manage the situation.


This entails understanding the changes companies are making and thinking through their consequences: it is still assumed, by planners and in many urban bylaws and regulations, that buildings have specific uses, that economic activity occurs in specific neighbourhoods and clusters, and that this can be understood and regulated. But as increasing numbers of workers perform their economic activities across the city and along its transport networks, new concepts are needed to understand how the economy permeates cities, how ubiquitous economic activity can be coordinated with other city functions, such as housing, public space, transport, entertainment, and culture; and, crucially, how it can translate into revenue for local governments, who by-and-large rely on property taxes.

It’s worth noting that changes in the role of real-estate are also endemic in the retail sector, as shopping shifts on-line, and as many physical stores downsize or close. While top flight office and retail space may remain attractive as a symbolic façade, the ensuing surplus of Class B (older, less well located) facilities may kill off town-centres.

On the other hand, it could provide new settings within which artists and creators, evicted from their decaying nineteenth century industrial spaces (now transformed into expensive lofts), can engage in their imaginative and innovative pursuits. Other types of creative and knowledge work can also be encouraged to use this space collectively to counter isolation and precarity as they move from project to project.

Planners and policymakers should take stock of these changes – not merely reacting to them as they arise, but rethinking the assumptions that govern how they believe economic activity interacts with, and shapes, cities. Brexit and other fomenters of economic uncertainty exacerbate these trends, which reduce fixed costs for employers, but which also shift costs and uncertainty on to employees and cities.

But those who manage and study cities need to think through what these changes will mean for urban spaces. As the display, coordination and supervision functions enabled by real-estate – and, by extension, by city neighbourhoods – Increasingly transfer on-line, it’s worth asking: what roles do fixed locations now play in the knowledge economy?

Filipa Pajević is a PhD student at the School of Urban Planning, McGill University, researching the spatial underpinnings of mobile knowledge. She tweets as @filipouris. Richard Shearmur is currently director of the School, and has published extensively on the geography of innovation and on location in the urban economy.