London fares, affordable homes and the conundrum of Harrow-on-the-Hill

Just before Christmas 2013, I was taken to Harrow-on-the-Hill station by very important people from Transport for London (TfL) who outlined a plan for redeveloping the adjacent bus station and staff car park and using the profit to improve the place, including by installing passenger lifts that would cost around £25m. The station has a faded charm, which includes a lot of steps, though those aren’t much use to you if you are disabled or pushing a child in a pram.

Two-and-a-half years on, local MP Gareth Thomas has written to TfL with concerns about how the plans were taking shape. He had heard that half-a-dozen tower blocks were on the cards, each of them 20 storeys high, with only 10% of them “affordable” and no “first dibs” deal for Harrow residents. He asked for “early publication of the financial projections around these particular proposals”.

That was in July. By then, of course, London had a new mayor with new ideas about how TfL should go about exploiting its substantial land assets and to what ends. Under Boris Johnson, TfL’s primary aim had been to make money from the land by entering into joint ventures with property developers and building mostly market-priced housing on the land.

By contrast, Sadiq Khan, has said he wants 50% of the homes built on TfL and other public land to be “genuinely affordable” shared ownership dwellings for first-time buyers who’ve been renting for five years. And, sure enough, TfL’s director of commercial development Graeme Craig has told the Harrow Times that conversations have taken place with the new mayor’s team “about increasing the number of affordable homes that could be delivered on the site” along with maintaining the original focus on “delivering local station improvements, including step-free access [lifts]”.

This may hearten Gareth Thomas. But what would an increased amount of affordable housing at Harrow-on-the-Hill at the expense of more profitable properties mean for TfL’s finances, both with regard to its plans for the station itself and overall?

On the face of it, more “genuinely affordable” homes on the site would mean less income from the development for TfL at the very same time as the organisation is required by Khan to find the money to freeze its public transport fares throughout his four-year term and as the government is phasing out its operational grant, which helps fund the day-to-day running of its services.

Khan’s manifesto lists putting TfL land to “better use” by “retaining ownership while building affordable and market homes, as well as commercial space” and thereby “generating a long-term and secure revenue scheme” as one of the ways of funding the freeze.

But if insisting on 50% “genuinely affordable” homes at Harrow-on-the-Hill - or even anything substantially higher than the 10% Thomas understands TfL initially had in mind - makes it harder both to fund the local station improvements and to bridge the fares freeze funding gap, doesn’t something have to give?

One solution would be to simply increase the total number of homes to be built at Harrow-on-the-Hill, meaning that the while the percentage of profitable market-price homes would fall, the number could still be maximised. But such an increase in the density of development might have to be achieved by increasing its height, and Thomas is already unhappy with its reaching 20 storeys. Local people might feel the same way.

This is a very basic description of a conundrum which captures the tensions between two of Khan’s most attractive and important policies. There are other influential interested parties involved, including Labour-run Harrow Council and local Labour London Assembly member Navin Shah. No plans for Harrow-on-the-Hill had been set in stone and there are always creative options for doing the difficult sums and for increasing housing density without increasing building heights.

No doubt such things are being looked into. It will be instructive to see what happens next.