Article by London's Deputy Mayor for Housing in City AM:
It is time legislation was introduced to enable that land to be transferred direct to the mayor for disposal, providing homes for Londoners rather than being left to waste. At City Hall, we have a “Domesday Book” of Greater London Authority assets. It offers more transparency and could be expanded to include everything from the public sector.
And instead of auctioning assets off, consideration should be given by public bodies to how to extract more value over the longer term, by partnering with developers. This sort of thinking is happening at some big landowners like Transport for London. These bodies have the potential to be the Great Estates of the future, like those who built large parts of central and west London.
Ho hum.
"Partnership" always sounds so cuddly and nice and is oft wheeled out by the UK government to justify giving large sums of money to its mates i.e. Private Finance Initiative and so on.
But if you take his words "extract more value over the longer term" literally, the blindingly obvious thing to do would be for the GLA (or whichever government body) to retain ownership of the land and ask a developer to build the building.
Whether the GLA and the developer split the future income in proportion to the relative value of the land (about three-quarters) and the cost of the building + profit margin (about one-quarter), or whether the construction costs are just paid off out of the first few years rental income* is minor details.
* Rents per square foot per annum = bare minimum of £10 in outer London fringe, all the way up to £100 and beyond in the top decile.
Build costs per square foot = £100.