The Guardian - Jules Pipe - There are solutions to London's housing crisis - Local government network - Guardian Professional

Jules Pipe believes that more affordable housing could easily be built in London Photograph: Graham Turner for the Guardian

This Christmas, London is at the epicentre of a housing crisis. A lack of long-term investment has led to a severe shortage of affordable homes in the capital ? leaving many people unable to pay their rent or mortgages, living in overcrowded and substandard conditions or even homeless.

This crisis affects both young and old, and those on low and middle incomes. And, worryingly, indications are that if we continue as we are, it can only get worse.

Across the capital, more than 360,000 people are on council waiting lists. After consistently falling for years, homelessness is once again on the rise and figures released last week show that nearly 40,000 people in London live in temporary accommodation.

These stark statistics speak for themselves. London's local authorities are battling to reduce the number of families forced to live in bed and breakfast or other temporary accommodation.

Not only is this type of housing unsuitable as a long-term place to live, it is also expensive. With the sharp reduction of affordable homes in the private rented sector ? where rents continue to increase ? boroughs have had no choice but to reluctantly use bed and breakfast accommodation to house people in need.

What is clear is that this all comes down to a lack of supply of good quality, affordable housing. At the moment London's local authorities own and maintain about half a million social homes ? but this is not enough. The answer is simple. We need to start building homes urgently ? a solution that London's councils are ready and willing to embrace.

A report?launched by London Councils this month, Meeting?Londoners'?housing?needs:?investing?in?housing?infrastructure, is calling on the government to support a new clause to the growth and infrastructure bill, which is currently making its way through parliament.

This new clause would remove the artificial cap on borrowing ? enabling councils to securely and safely borrow against their housing assets to finance up to 54,000 new homes. Local authorities would still be subject to wider Treasury regulation to prevent excessive spending.

London will need to build 36,000 new homes each year just to keep pace with the expected population increase of 1 million people within the next 10 years. But in 2010-11 about half this many were built, and in the first half of 2012-13 there have been only just over 5,000.

Removing the borrowing cap would also allow boroughs more freedom to lever foreign investment into housing in London. According to the Smith Institute, overseas investment in the capital in 2011 was ?5.2bn ? a larger sum than the entire affordable housing budget for the whole of England from 2011-15. If the cap was lifted, boroughs could direct some of that foreign investment away from expensive homes in prestige developments and into affordable homes for normal Londoners.

At the stroke of a pen, the government could create jobs, build more homes and save significant amounts of money. Temporary accommodation costs ?408m a year in London alone. Temporary accommodation is not a good way to spend public money, and it's not a good place for homeless Londoners to spend Christmas. If the government acts now, we may not be able to end London's housing crisis by next Christmas ? but we may at least know that the end is in sight.

Jules Pipe is chair of London Councils and mayor of the London borough of Hackney

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Source: http://www.guardian.co.uk/local-government-network/2012/dec/18/jules-pipe-london-housing-crisis

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