Feargus O'Sullivan is a contributing writer to CityLab, covering Europe. His writing focuses on housing, gentrification and social change, infrastructure, urban policy, and national cultures. He has previously contributed to The Guardian, The Times, The Financial Times, and Next City, among other publications.
Sadiq Khan’s re-election bid starts with a power move that could change London’s housing market—but only if Parliament wants it to.
Vote for me and I’ll push for rent control.
That’s the message from London Mayor Sadiq Khan this week, declaring a key policy in the run-up to London’s 2020 mayoral elections. If re-elected, Khan has vowed to do everything he can to ensure some form of cap on rent increases in the city. The statement is a bold one, but there’s a major limitation that Khan himself clearly states.
Simply put, the mayor doesn’t have the power to do this himself. His post is primarily responsible for transit and London’s overall planning blueprint. The rent control he promises would need action from Britain’s national government—which, you might have heard, isn’t a beacon of effectiveness at the moment.
Still, Khan’s promise is a strong power move, one that could strengthen his position and ultimately change the direction of the London housing market.
For starters, the idea is popular in London. According to a poll from City Hall itself, 68 percent of Londoners favor of some form of rent control, versus 16 percent against and 16 percent with no opinion. There are, however, some classic arguments against rent control that would come into play against any campaign to introduce it. Critics maintain that hampering landlord profits removes incentives for developers to build the new housing that cities need. It could also, they say, lead to run-down housing stock as landlords try to cut corners to compensate for lower returns.
For most contemporary Londoners, these arguments don’t spark much fear. The hypothetical scenario they paint looks a lot like the reality of the city’s housing market today.
Even with no upper limits on rent, the city is already falling far short of meeting the housing needs of its residents. There’s a limited amount of land eligible for planning permission, and when developers do build, they’re undersupplying homes at prices most Londoners can afford. A lack of political will, meanwhile, means that affordable quotas set by local authorities are notoriously and systematically diluted.
In such a pressured market, landlords know they can still easily rent properties in poor condition at high prices. Arguments can be made that rent control could exacerbate this situation, but it’s hard to claim that the absence of rent control has done much to stimulate improved living conditions or affordable housing provisions in London.
Exactly what “rent control” would mean is still unclear, because the specific form of cap that Khan would advocate for hasn’t yet been nailed down to a single concept. Research commissioned by the city has explored (but not endorsed) various ideas. The most radical option—highly unlikely given the U.K.’s attitude to housing market regulation—includes a cap on all new rental contracts at two-thirds of current market rates. More likely are measures such as extending the minimum length that a landlord can offer in a rental agreement—from the current six months to a year, to up to five years—along with a ban on any rent increases above either inflation or average market levels during their duration.
There is, of course, an elephant in the room here, albeit an elephant people are discussing. Mayor Khan could campaign for such a policy, but he couldn’t implement it himself. That would require approval from national government, and thus rent control’s future in London still relies very much on the outcome of the next national election—which, if current poll ratings continue, the Labour and Conservative parties have a broadly equal chance of winning.
If Khan’s Labour Party gains a majority, rent control will likely be adopted. The party’s national leader, Jeremy Corbyn, has already declared himself in favor of it. If the Conservatives survive the Brexit debacle, however, then London rent control will likely not fly.
Khan’s advocacy would still make it harder for the national government to deny the policy’s popularity. Should he win on a pro-rent control platform in 2020—and in a majority Labour-voting city where he remains popular, he is likely to—then he can fairly claim a mandate for rent regulation. This may cut no ice (and heighten public awareness of his office’s relative political weakness), but it would certainly polish up his credentials as a people’s advocate. That’s a shrewd move for his public profile, whatever the result.