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Must London Allow Density And Sprawl To Address Housing Shortages And High Prices?
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The city has to do several things to keep it affordable and vital. Public policy matters for increasing housing supply, but private investment is already at work.
The population of London continues to increase at a faster rate than housing growth - by quite a bit. In fact, while the shortage of homes currently is thought to be somewhere between 500,000 and 800,000, the city additionally falls short of the goal to build 80,000 new homes each year. Only 18,380 new flats and homes were built in London in 2013 as the housing gap grows ever bigger.
The prevailing argument was to build on brownfield land first, taking advantage of previously used space by constructing something new in those spaces. But by definition those spaces largely accommodate smaller-scale construction, which most likely will not fill the entire void any time soon. Private investors, through such things as real estate investment trusts and real asset investing (more often individual investors who work in smaller groups), build where they can find available land and achieve planning approval.
This is why the discussion about density, high rises and suburban/greenbelt building is increasing. London is fairly spread out within the city proper - it is the world's 23rd most populous city (second in Europe only to Moscow), yet ranks 43rd in density with about 5100 people per square kilometre. The city's tallest building, The Shard London Bridge, with 73 floors above ground, still only ranks 87th among the world's tallest buildings in the world. Architectural issues aside, London could build a bit more densely with more high rise residential towers.
The city's options include several approaches:
Increase housing density in London - London First, a non-profit organisation that promotes pro-business public policy for the city, published "Home Truths, 12 steps to Solving London's Housing Crisis" in March 2014. Among those dozen recommendations is to increase density, noting how peer metropolises are denser. The publication suggests that city "encourage and facilitate greater density of well-designed homes within London," such as through designated high rise districts.
Transport-oriented development in new suburbs - London First's "Home Truths" also advocates for the construction of transport infrastructure such as Crossrail and Crossrail 2, which would lead to the development of new suburbs. Of note: development near stations on these transport lines within the city is likely as well.
Building on greenbelt land - The city has to consider the sacrosanct nature of greenbelts, and whether or not they serve their intended purposes. For every example of a lovely, green view to residents located nearby, there are examples of disused greenbelt lands that fail to live up to the idea of what greenbelts should be. Writing for City A.M., the chief executive of London First, Baroness Jo Valentine writes, "It's time we put a myth to bed: greenbelt is not all parkland where deer graze serenely, surrounded by wooded copses. Portions of the greenbelt are forgotten, unloved scrubland that would be considerably improved if thoughtfully developed. Although we don’t need to go so far, Paul Cheshire of the LSE has noted that taking a 1 km ring outside the M25 would yield enough land for more than a generation of building at current London rates."
Tellingly, uber-green writer Lloyd Alter, who is managing editor of TreeHugger, wrote in The Guardian that there is such as thing as "too dense," noting that London already has more people per square kilometre than New York and Toronto. He extols the virtues of "smaller flats, closer together, with narrower streets that acted as their living room, pantry and entertainment centres" found in Paris, Barcelona and Montreal - all designed and built before the age of the automobile. But he doesn’t much care for skyscrapers, claiming they destroy streetscapes and are energy-intensive to build and maintain. Alter places highest values on active transport (walking, bicycling and public rails and buses), around which he feels development should be designed.
Perhaps the best approach to improving on the housing shortage is an "all of the above" strategy. Capital growth partners, in tandem with large and small homebuilders, should build in planning regimes where an understanding of the need is clear and where such development will enhance the existing communities. Government-sponsored efforts - such as establishing density zones and to build new transport rails - can help facilitate this as well as enhance the city's low-carbon efforts to a sustainable future.
This is not misplaced optimism: individual investors are strongly drawn to real estate because of its historic record of generating strong asset growth. But all investors should consult with an independent financial advisor to determine an appropriate degree of risk in property development.
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