Housing is, to put it mildly, a hot-button issue in contemporary British politics. The acute hike in rental costs in desirable urban areas, alongside the failure of the Boris administration to push through mandatory house-building targets, has left many “YIMBYs” feeling ever more despondent at the prospect of a resolution to this generational roadblock. Whilst I often feel frustrated by the reluctance of these same people to honestly engage with the negative impact mass immigration has had on the housing problem, I certainly sympathise with the aggravation these supply-side radicals feel in response to the endless moaning about social housing.

There is plenty of debate around the provision and maintenance of social housing stock, usually in favour of expansion. This can be for good reason: as James Vitali of Policy Exchange shows, increasing the social housing stock could help the government reduce welfare spending on housing benefits by 6.5 per cent per annum and by around £10 billion over five years.

London is struggling under the yoke of poor planning and restricted development

The issue, then, is the location of this housing — particularly where it pertains to the capital. The rest of Britain is dependent on the capital that London provides. For example, the former dockland area Canary Wharf generates around £40 billion of GVA. London, the South East and the East of England all had net fiscal surpluses in the financial year ending 2020, with all other countries and regions of the UK having net fiscal deficits. There are 717,078 socially rented homes in London — 20 per cent of the capital’s 3,671,000 total dwelling stock. 20 per cent of housing in London is classified under the social rented sector, but this number climbs to 28.9 per cent in Westminster, one of the wealthiest boroughs.

London is struggling under the yoke of poor planning and restricted development — at least in the private sector. Council housebuilding in 2021 was greater in London than the rest of the country combined. In 2020–21, the proportion of social rented households varied by region, from 13 per cent in the South East, to 22 per cent in London and the North East. This is unfortunate in Darlington — in London, it’s madness.

It’s worth noting that a significant proportion of the inhabitants of social housing in the capital are not in low-paid but vital work, yet they are unemployed. Lead tenants in new social lettings made in 2019/20 were less likely to be employed and more likely to be unemployed than lead tenants in the social housing sector as a whole. The proportion of lead tenants living in social housing in employment in London is lower in absolute terms than the rest of southern England.

I call this phenomenon “Banlieue Britain” — drawing on the name of the notoriously impoverished (and dangerous) suburbs encircling Paris. In our context, the process is reversed. London’s Zone 5 wastelands house our best and brightest (at least whilst they are still young-ish), yet areas a stone’s throw from our financial hub are housing the economically unproductive. Paris’s four central districts are the least populated areas of the city, representing only 4.5 per cent of the population, and they are mainly comprised of young adults with high incomes. In such circumstances, the label “Bizarro Banlieue Britain” might better apply.

Social housing is no substitute for bolder, market-led reform

A good example of the unfairness inherent to Banlieue Britain can be seen in Tower Hamlets — a brisk ten minute walk away from Canary Wharf. When the Bangladeshi community began moving to Tower Hamlets six generations ago, they were drawn by low-cost housing and plentiful job opportunities in the textiles industry. These factors are no longer influential today, and the Bangladeshi community now has an employment rate (in Tower Hamlets) of 39.3 per cent. Thanks to social housing, however, the community is able to retain an overwhelmingly strong presence in the area. This is reflected in local politics: the mayor and all 24 councillors of the borough are of Bangladeshi heritage.

This isn’t to pass judgement on those living in socially-owned housing in the centre. Many of these dwellings are low-quality, cramped and neglected. Few would begrudge the presence of what little stock remains, even in highly-desirable areas, had the rental crisis not spiralled out of control so quickly. There is an acute shortage of low-priced, reasonable private accommodation, however. In such circumstances, high-minded social engineering schemes worsen the problem — like Sadiq Khan’s London Plan, which demands that 50 per cent of all new developments contain “affordable” homes (i.e homes that cannot be bought and sold on the private market freely).

Agitating for more social housing might sound nice — and even YIMBY adjacent — but London shows us that it is no substitute for bolder, market-led reform. Politicians who most strongly push for more “affordable homes” also back ruinous planning restrictions and failed rent-control experiments. Concentrating subsidised housing in the most expensive and productive area of the country is unwise, not to mention unfair. Any policy proposal seeking to address the housing and rental crisis in London must also grapple with the “Banlieue Britain” conundrum.