London Mayor Boris Johnson pledged to "kick-start" the city's house-building industry by using £5 billion of U.K. government cash to pay for low-income homes.
"I want to create the means to get the market moving," Johnson said at a press conference today. "We need to kick-start this thing somehow."
He will use the money provided over three years by Prime Minister Gordon Brown's government to encourage the building of 50,000 homes by 2011. The city will make unused land available for development, finance projects whose developers can't raise cash, the mayor said. City officials also will buy unsold or vacant homes and turn them over to low-income residents, he said.
A deepening recession and falling property prices across the U.K. capital mean achieving the targets will be difficult. Johnson, a Conservative and former member of Parliament, was elected in May, and has scrapped some of the housing targets of his predecessor, Ken Livingstone, including one that required half of all new homes to be set aside for low-income residents.
Johnson said he wants to negotiate with developers and housing officials from the city's 32 borough governments rather than threaten them.
The number of affordable homes built last year in London was 13,220, below the 16,700 residences needed to reach the target of 50,000 in three years.
`Radical Thinking'
The city's legislative assembly said in a report yesterday that the mayor needs "radical thinking" to reach the housing target. The mayor should encourage the building of more rental homes rather than those to be purchased, said Nicky Gavron, a Labour member of the assembly, in a statement accompanying the report.
"Fine words won't build Londoners the homes they need," said Mike Tuffrey, leader of the Liberal Democrats on the city's legislative assembly. "Boris Johnson will need to act decisively" or his housing pledges "will be proved worthless," he said in an e-mailed statement.
Waiting lists for social housing in London, which includes rent-subsidized apartments and houses, expanded by 45 percent in five years to 333,857 households currently, the National Housing Federation said in a report published last month. The city's subsidized-housing market is under "severe strain" because of a shortage of supply, the federation said in the report.
Johnson has "got to take that considerable amount of money and get the market going," Gavron said in a telephone interview. "He's got to concentrate on increasing affordable rental" homes, she said.
Source: Bloomberg.com
