Towering arguments: The London property sector seems to be stuck on the fence over who should be the next mayor. Boris Johnson makes his pitch to Paul Norman
“I am absolutely not against commercial property,” says Boris Johnson, the flamboyant and seemingly omnipresent Conservative candidate for this year’s London mayoral election, and he wants to set the record straight.
Until now, his pronouncements on what he would do for the commercial property industry, should he be elected on 1 May, have been few and far between, and hardly designed to bolster confidence. Widely quoted diatribes against “phallocratic” towers have led some to view Johnson as being against commercial development, a suggestion he wants to dispel.
“The reason that the commercial property sector has tended to get less attention than residential property [from me] is that the commercial sector is relatively well-run,” he explains. In fact, he adds, the only development he is “anti” is bad development.
“When you see how bad lots of developments can be, you can understand exactly why people try to prevent development,” he says. “The only way we are going to overcome local nimbyism is to build better, to build appropriately and to build more beautifully. We need to win people over to assuming that development will be good.”
Despite his reputation as one of the political world’s mavericks, Johnson proves a far more circumspect interviewee than his rival, the incumbent Ken Livingstone.
Asked which commercial property developers he most admires, Johnson dithers. “This is a question I cannot answer without hurting someone’s feelings,” he says. “I will want to get on with every developer when I’m mayor. I’m all about building bridges [not literally], and not burning them.”
Two years ago, when EG asked Livingstone the same question, he immediately lauded Irvine Sellar and Gerald Ronson, before turning his ire on the residential market’s “old boys’ club” as well as the Reuben Brothers’ involvement at the Stratford City Olympics development.
Aspirations
Johnson, of course, needs to tread a fine line for now. As expected for a man who wants to be taken seriously but does not want to upset too many potential voters, his responses are peppered with lofty aspirations backed up by not much detail. He obviously feels that he needs to overcome a sense of “better the devil you know” among Londoners, and so focuses on areas that he claims have been bogged down by the inertia that eight years of one ruling party brings.
“I would be a better mayor because I am not stuck in the past,” he says. “London needs to move on from Ken Livingstone’s tired, out-of-touch 1970s approach, where he is more interested in rehashing the arguments of the past than taking London forward.”
How does this viewpoint apply to commercial property? Johnson says that he is planning a radical reworking of the London Plan and borough frameworks so that development is less constricted by regulations.
While he agrees that the London Plan’s focus on high-density housing around transport nodes is a “good one”, he argues that it is too restrictive. “Part of the problem of the London Plan is its one-size-fits-all approach,” he says. “While I think that the idea is sound, I do not think every transport node is a potential housing development.”
Pushed as to where and how he would make changes, Johnson says that he would deregulate the system so that “we can tailor projects to individual areas”. In particular, he is thinking of Livingstone’s objective of 50% affordable housing at major developments.
In areas where the higher densities needed to make projects viable are less easy to achieve, Johnson would relax the rules. He says: “There are boroughs like Newham, where the rigidity of the rules – like the affordable housing quotas – is preventing real regeneration.”
Johnson is also looking at those areas zoned for development in borough plans. “There are problems with zoning in lots of London boroughs, which we need to look at in detail,” he says. Pushed on specific examples, his response is: “We can’t rewrite the London Plan in an electoral period.”
Nevertheless, behind the scenes, Johnson has been wooing the capital’s commercial property movers and shakers.
One of London’s best-known and most successful developers, who refused to be named, says that Johnson has been discreetly meeting leading figures to pick their brains and tweak his policies.
“Boris has being doing the rounds, arranging meetings and doing his homework,” the developer says. “Ken [Livingstone] has stopped listening to us, but Boris is listening to our main concerns about housing, traffic and congestion. Equally, he is looking at breaking the development logjam by targeting the sheer amount of negotiation that goes on. He also wants better quality developments.”
Helical Bar chief executive Mike Slade says that Johnson has been in close contact with the Tory Property Forum, which Slade chairs, as he formulates policy.
Slade says: “One issue is the Tories seem to be strangely seen as ‘nimby’, and we are looking at how we get over this. We are talking about how strategic developments and infrastructure can encourage local boroughs to see the benefits of development. His comments on towers merely related to residential schemes in outlying boroughs.”
A senior London agent, who also refused to be named, said that Johnson was looking into easing sustainability targets in certain areas. “The problem with Ken,” the agent says, “is he wants his pound of flesh for achieving his objectives. He encourages development, but makes large demands in terms of affordability and sustainability.”
Where the market will need most convincing concerns Johnson’s suggestion that he can speed up the planning system by better managing the relationship between the mayor, local authorities, local residents and the development community.
“Ken’s approach has been to name and shame councils he thought were not being run in the way he wanted,” Johnson says. “I do not think there is any point in being so confrontational. We need to work with local residents and the boroughs to make sure their concerns are addressed. Harassing boroughs into doing as we wish is not going to work in the long run.”
To this end, Johnson wants to limit mayoral intervention in local authority planning decisions and claims that he has little need for the “strategic powers” Livingstone will enjoy from April of this year.
“The mayor will get bulked up powers for housing in April – and I suspect that they are probably too much,” Johnson says. “The mayor’s strategic powers should only be used strategically, not to ram through every development that the mayor likes.”
This sounds good, but should Johnson become mayor, he will surely find local borough nimbyism as frustrating as Livingstone does, particularly as he says that his administration would push through more housebuilding in the capital.
To win over the industry, Johnson’s biggest battle will be proving that he has the depth for such a serious role.
Malory Clifford, chief executive at Blackfriars Investments, the developer behind Transport for London’s offices at Palestra in Southwark, says: “The problem for Boris is, he is clever and funny but still he appears a bit buffoonish, a mad professor, and I think the mayor’s job needs someone serious.”
Comedian
David Pearl, head of private investor Structadene, is less impressed. “He was a guest at a charity dinner I attended the other night,” he says. “So was Joan Rivers. I couldn’t work out which one was the comedian. And the bloke needs a haircut.”
In response, Johnson is already feeling his way around some of the industry’s major gripes. He has singled out protracted negotiations over infrastructure funding as a key bugbear.
“The big problems for the current regime are the unpredictability of section 106 agreements, the length of time negotiations take and the lack of transparency in the process,” he says, adding that his solution will “retain flexibility” but will involve a “tariff system for concentrated developments”, which would “at least be a big improvement”.
He is also pledging to tackle the lack of progress on regeneration in the Thames Gateway. “Progress is still too slow,” he says. “The mayor has a responsibility to make sure that the strategic London elements of the Thames Gateway project are delivered. Delivery of infrastructure remains a serious problem.”
He is also promising to make a serious fist of rejuvenating Oxford Street as a shopping centre. “The current situation on Oxford Street is unacceptable,” he says.
“Just under half of all bus routes in London go down Oxford Street at some stage in their journeys, and this must change. I will be announcing proposals to tackle this in due course, but I will say now that, with me as mayor, Oxford Street will be demonstrably better.”
Finally, Johnson says, in characteristically mock-serious fashion, he has two overriding ambitions for his mayoral administration’s relationship with the commercial property industry. “We need to get more commercial investment into areas which we earmark for regeneration,” he says, “and more commercial property developers need to vote Tory. Well, one out of two isn’t bad!”
What the development community wants from its mayor, whoever that may be
London’s leading commercial property players are understandably cautious about going on record with what they think about the current mayoral administration, as well as the prospect of Boris Johnson as mayor.
Mike Slade, chief executive at Helical Bar, who has donated funds to the Back Boris Campaign, says that the current furore over political donations has muddied the situation.
“The point is,” he says, “one should not be cowed in making a political comment in a democracy. And the fact is the two real concerns do not stand up. If you back the loser, it’s unlikely the winner will treat you any worse because of it. And if you back the winner, it’s unlikely he will particularly favour you.”
One leading office developer, who refused to be named, says: “When a significant chunk of your landholdings are in London, you don’t really want to be upsetting either prospective mayor.”
That said, it is clear where they want to see change and Johnson is at least targeting the right areas.
“I applaud what Ken Livingstone has done in terms of using his planning powers to insist on large-scale development around transport nodes,” says Slade. “I would love to think Boris will have the ability to continue this. What I don’t like is what Livingstone has done in terms of how transport is run and in terms of the congestion charge. And the bigger picture is, I feel a Tory administration would be more efficient and competitive.”
Efficient planning
Blackfriars Investments’ chief executive Malory Clifford says that the area where industry most wants to see improvement is the planning system.
“Ken has been quite good, and has tried to be helpful,” he says, “but I think the bottom line is that any mayor still needs to make the planning system faster, more efficient and more responsive. And boroughs need to stop seeing developers as evil ogres – even though some of them may be – and start working with them.”
One well-known London developer, who also refused to named, says: “What we need to see is a cutdown in the logjam, less negotiating all the time during the planning process, more support in terms of infrastructure, and a focus on better quality design and more beautiful buildings. We also need to look at individual needs in areas, and not have developers and boroughs motivated by Ken’s policy of throwing the kitchen cabinet at them. Ken has his favourites and that’s that.”
One senior London planning adviser says that Johnson is already revealing a lack of understanding of the realities of development in the capital. He says: “He has been talking about not needing to stand up to borough planners at the same time as saying he would never have allowed Victorian buildings in Tower Hamlets to be demolished and replaced with towers.
“But the borough planners obviously approved that application.”
