London's Opportunity Areas
London's Opportunity Areas

Flagship housing and jobs policy needs reform if it is to succeed, says report

Large swathes of brownfield land considered critical to creating hundreds of thousands of homes and jobs in London will struggle to deliver without significant extra resources, according to a new report.


Large areas in the east and north of London are particularly at risk, the study from business group London First concludes.


Opportunity Areas, one of Mayor Boris Johnson’s flagship schemes, consist of 38 brownfield land areas earmarked to supply up to 303,000 new homes and 575,000 new jobs.


The report says these Areas have a vital role to play in meeting London’s urgent housing needs, as well providing jobs for the capital’s rapidly growing population.


But Opportunity Knocks: Piecing together London’s Opportunity Areas, also warns that building in the Opportunity Areas remains of “marginal value to developers” and that many still fail to offer commercial viability.


Highlighting a lack of information, skills, and money that could delay or fatally undermine development, the report calls for a raft of measures to ensure these can become places where Londoners will want to live and work.


Among the challenges the report highlights:


London boroughs often lack the experienced senior staff or specialist resources necessary to manage large and complex phased developments.


There is a lack of information available to prospective developers and investors about the level of public support required in each Opportunity Area.


It is unclear how the required transport infrastructure costs will be met and built on time in Opportunity Areas.


Utility regulation needs to be reformed to enable more timely forward provision of electricity and water infrastructure.


The report’s key recommendations include that:


The Mayor should require boroughs to introduce simpler planning rules across all Opportunity Areas, including rules about when Community Infrastructure Levy (CIL), Section 106 planning obligations and affordable housing requirements will need to be removed or reduced in early phases to assist with viability;


A dedicated GLA-led advisory team focused on supporting the delivery of Opportunity Areas should be established to support boroughs in implementing development in Opportunity Areas;


The Mayor should ensure that a more detailed work plan, equivalent to a business plan, should be created to provide greater certainty for investors and public bodies and protect Opportunity Areas against the impact of economic and political cycles;


The Opportunity Areas should be categorised – green, amber, and red – by the GLA to show the level of support from public sector bodies required for developing each Opportunity Area; and


The Government should support the sustained investment in infrastructure required to deliver additional housing, jobs and economic growth in London’s Opportunity Areas. This might include the provision of additional resources, powers or other guarantees that will enable London to fully meet its growth potential.


Baroness Jo Valentine, Chief Executive of London First, said:


“Opportunity Areas have to succeed if we’re going to build the homes and create the jobs needed to support a city growing by a million people a decade.


“But transforming Opportunity Areas into places where Londoners want to live and work will mean taking difficult and unpopular decisions.


“We will have to invest large sums of public money in transport and infrastructure. We also have to accept that, at the outset, there is very little we can ask of the private sector in terms of social infrastructure and affordable housing if we want to get shovels in the ground.


“If we can summon up the courage to do this, there is a huge prize to be claimed – nothing less than a generational boost to London’s competitiveness as a global city.”


Craig McWilliam, Executive Director, Grosvenor Britain & Ireland and Chair of the London First steering group, said:


"The Mayor’s policy for London's Opportunity Areas is at the heart of efforts to create new homes and jobs.


“If London is ever to meet its need for more housing, this policy has to succeed.


“Our research suggests that by stress-testing and where necessary strengthening them, these Opportunity Areas have the potential to deliver a huge boost to London’s competitiveness as a global city."


Ann Bartaby, Director, Terence O’Rourke Limited – which carried out the analysis for the report, said:


“Opportunity Areas can provide a major boost to jobs and housing in London but we need to be robust in facing the hurdles head on.


“There are good reasons why developers haven’t flocked to these areas as they have to other parts of London over recent decades.


“Low land values, inadequate infrastructure and poor transport links often come together to make them unviable.


“But the good news is, in most cases, these problems can be overcome, as long as we’re willing to back up words with concerted and proper support.”


Download the report here.