The cost of housing is undoubtedly London’s most severe crisis – but putting the construction of new homes above all else risks making other crises worse. Cities are complicated places that need a range of jobs, as well as mundane goods and services to keep them ticking over. So we should be more wary of the rate at which the industrial sites providing these jobs, goods and services are being turned into flats.
This broader perspective was lost on outraged tweeters when I published my report raising alarm about the loss of industrial land in London. They accused me of standing in the way of new homes being built.
But why not build on parks and gardens? They take up more than half of London’s space, after all. The obvious answer is that they provide vital functions to Londoners and the many other species that inhabit the city. You can’t have homes without space for recreation, plants to cool the air in the summer, permeable spaces to stop rainfall causing floods, and so on.
I wrote my report because I think industrial sites can also provide some vital functions to London. I’m not opposed to all development on them, but I’m worried the mayor has been allowing too much to disappear based on faulty assumptions. Here are five reasons I think you should worry too.
1. They shelter a lot of viable businesses
In 1998 you’d find 14 per cent of industrial sites in London sitting empty, and the impression remains that these are wasted space supporting dying industries. This chart, which inspired my report, shows the mayor’s predictions for the extinction of many industries in London:
Source: GLA.
Predictions like these underpin the policy of supplying less and less land, handing it over to housing. But that policy can also cause the loss of these jobs.
In 2010, vacancy rates on London’s industrial land had dropped by half to 7 per cent – lower than most high streets. In Hackney Wick, a site I visited for my report, the vacancy rate is just 4 per cent. The remaining land is used by a range of viable businesses like a mid-scale brewery, a kitchen furniture manufacturer, catering firms, a scaffold yard and more.
But Hackney Wick has been designated for conversion to flats and a few artists’ workshops. So the land owners and developers have bought up the land, are giving shorter and less secure leases, and will eventually boot them out. Some businesses will move, some will fold.
2. We’re losing skilled manual jobs
It’s easy to think that London’s job market is booming, so why care if these businesses go?
The problem is that London, like the rest of the UK, has been experiencing something called “hollowing out of the middle”. This is where the middle-ranking jobs disappear, while new jobs are created at the bottom or the top of the scale – baristas and barristers, but not brewers, if you will. The problem is illustrated on this chart from a recent government report on the problem.
Source: BIS.
If the mayor’s predictions for industrial jobs come true, opportunities for skilled or semi-skilled manual work will disappear almost completely. The extra jobs in constructing homes on ex-industrial sites will fall a very, very long way short of making up the difference.
This crisis has been slowly unfolding for decades, and is one reason for the decline in social mobility and the rise in income inequality.
3. We need jobs to be spread across London
Unlike the media, banks and government, industrial jobs are spread all over London. We have the really large industrial areas in places like Park Royal in the north west and Belvedere in the south east.
At the other end of the scale, you can find small industrial sites peppered all over the city; my flat is on the edge of one in the north of Peckham. Here’s a selection of the bigger ones taken from OpenStreetMap:
This means that people can find work near to their home, which reduces the need to travel.
If everybody ends up working in central London, that would add to the strain on our transport infrastructure. It’s much cheaper to spread the jobs out, and unless we spend huge sums of money on tunnels there are physical constraints on the capacity of our road and rail network anyway.
4. We need some industries in London
Some people seem to think that all industry should move out of London. But the capital depends on many of them to function.
Economists outside the dismal mainstream have coined the label “foundational economy” for “the sector of the economy that provides goods and services taken for granted by all members of the population”. That’s the companies who service the City’s lifts, process and distribute their food, recycle their waste, and so on.
Here’s a sample out of the window of a business I visited in Charlton, including a paper recycling plant:
Location is often critical for these businesses. The lift repairers need to be close to the central London towers, while fresh food producers and distributors need to be close to their markets.
Industrial sites shelter these mundane but essential goods and services that keep everything ticking over. Planning policy locking in the industrial use keeps the value of the land down, keeping the businesses viable. How would we build homes without scaffold and builders yards?
Ironically, the ongoing conversion of these to homes has meant longer journeys for suppliers, which has been driving up the cost of building those homes.
5. It’s good for the environment to be in London
The extra costs for builders point to my final reason to keep some industry in London.
Forcing businesses to outer London and beyond will mean more traffic, and so more pollution and congestion on our roads. Many industrial sites around London have rail heads onto the rail network and wharves onto the Thames and its tributaries, keeping huge quantities of materials on trains and boats instead of putting them onto our roads.
Air pollution and climate change are two other crises facing London. It doesn’t make sense to tackle the housing crisis and, in the process, make it harder to reduce pollution harmful to our health and a stable climate.
So let’s build more homes, but as part of a coherent strategy for the city as a whole – a city that can function with good job opportunities and falling pollution.
Baroness Jones of Moulsecoomb is a member of the Green party and of the London Assembly.
