This new research shows:
1 The economic value of providing discounted rental housing to key workers is, on average, £27,000 per household. From this we have deducted the cost of providing it of c.£14,000. The net benefit to London’s economy per household is at least £12,500 per annum.
2 Although it is marginally cheaper to provide key worker housing in outer boroughs, there are significant costs to be offset – transport, time, etc, and these almost negate the benefits of doing so. And because costs of housing in outer boroughs are rising so quickly, the differential is disappearing. Wherever we look across London there is a problem of ‘affordable’ living. If we wish to avoid the ‘doughnut’ effect – evident in Paris – where the workforce is ‘ghettoised’ in an outer suburban ring, we need to make provision for key workers across London. Failure to do this will have serious implications for the London economy.
3 The approach to fixing rents in S106 agreements typically over-subsidises a percentage of tenants who could afford to pay more. A personalised rent model, which we have applied at the New Era Estate would be more cost effective and allow more key worker housing to be created.