How I plan to tackle London's housing crisis

It was a bad mistake that the government failed to give the mayor of London strategic responsibility for housing in London. You cannot plan to meet London's housing needs simply at the borough level. As the new London Housing Statement puts it: "The scale and complexity of meeting housing demand in London merits a new approach. Costs, supply and demand are spread unevenly across London. For example, the areas with highest housing need differ from those with the most potential for new affordable housing."

The government seems to have recognised the error of its ways with the proposal, in the regional white paper, for the new regional assemblies to have an important strategic housing role. The Greater London Assembly and I are pressing for a commitment to implement this in London, where it is most needed, as soon as possible. Meanwhile, it is vital for me to work in partnership with the Housing Corporation at regional level, and with the boroughs, the housebuilders, London's registered social landlords and other stakeholders.

Those partnerships are up and running and working effectively. This effectiveness is, I believe, demonstrated by the new Housing Forum for London, jointly chaired by the GLA and the Association of London Government, and by the joint work that has delivered the best regional housing statement we have seen, setting out a clear and precise agenda for action.

At the top of that agenda is the shortage of housing – especially affordable housing – which is perhaps the most significant supply-side constraint threatening London's future prosperity and competitiveness. For many Londoners, the shortage is a crisis here and now. First, there are the 52,000 homeless London households forced to live in temporary accommodation – the highest figure for a decade. They and their children deserve better.

Then there is the growing number of Londoners on moderate incomes unable to afford to buy or rent on the open market, with the average London house price now over £200,000. FPD Savills estimates that this might be as many as 800,000 households.

The housing shortage is damaging London's public services, which cannot recruit the nurses, teachers and other key workers who make London a good and safe place for us all to live. It is also damaging private firms, which face the same recruitment problems and cost pressures.

Like many of London's other problems, the housing shortage is a legacy of past failure to invest in the capital and its infrastructure and of the abolition of city government and strategic London-wide planning. This is London's baleful inheritance from Lady Margaret Thatcher.

So despite a lack of formal housing powers, I have been determined from the start of my term as mayor to put housing at the top of my political agenda. That is why, immediately after my election, I set up a special Housing Commission, extremely ably chaired by Chris Holmes, to identify the scale and nature of London's housing problems.

It is also why I have been so determined to use my planning powers, both to set London's planning framework in my Spatial Development Strategy or London Plan and to intervene on strategic applications, in order to increase housing supply and especially the number of affordable new homes being built.

The draft London Plan – which is out to consultation – sets a target that 50% of new homes built in London should be affordable. We are already seeing a significant impact through the use of my development control powers on schemes like the Arsenal scheme in Islington, Bromyard House in Acton and the Grand Union Village in Ealing and Hillingdon. There are also the unitary development plan proposals for 50% affordable housing at King's Cross in Camden, while the boroughs are demanding higher proportions of affordable housing in deposit UDPs under review.

I am pleased to have played some part – along with many others – in making housing a much more salient political issue than it has been for many years. There is a widespread understanding that every Londoner's quality of life will suffer if we do not plan successfully to accommodate the projected growth in London's population over the next 20 years. My State of London poll this year found that the shortage of affordable homes came top of Londoners' concerns about the city.

We are making real headway with the government, too. Chris Holmes's Housing Commission recommended higher targets for affordable homes from the planning system, a new focus on the needs of people on low and moderate incomes as well as those of the poorest, and a contribution to affordable housing from commercial as well as residential developments. These have all since become government policy.

My plan calls for at least 23,000 additional homes annually. There are promising signs this target is being met and even exceeded

We have also witnessed a commitment to increase investment in affordable homes in London and the deputy prime minister's announcement of more money for London's hard-pressed planning departments, as well as the plans for the Thames Gateway.

But there is still a long way to go. The London plan forecasts that household growth and existing housing need combined will require additional housing of 31,900 homes a year for at least the next 10 years. This is much higher than the number of homes being built at present.

My plan calls on boroughs to provide at least 23,000 additional homes annually – 19,000 new-build dwellings and 4000 from vacant properties and multi-occupancy accommodation. There are promising signs that this target is being met and even exceeded. The number of residential completions in 2000, at over 20,000, was the greatest since 1994, while planning approvals were running at more than 32,000 – the highest level since 1988. So while there is obviously scope for speeding up the planning process, do not let housebuilders tell you that there is no big pipeline of approved schemes in London ready to go.

Land for housing in London is finite, but my planners are working with developers, registered social landlords and the boroughs to promote mixed-use, higher-density development in order to make the most effective use of urban land. They are proving that this is an economically viable proposition in London and a number of exciting schemes are coming forward. These include the Ilford town centre scheme with potential for 5000 new homes, Stratford City with up to 5000, West Silvertown with at least 3000, Cricklewood Goods Yard with 5000, the Hendon RAF site in Barnet with 2000, and Greenwich Peninsula with 8000.

Together with the London Development Agency and the boroughs, we are looking at other exciting opportunities for higher-density development in the Thames Gateway and the Lea Valley. Transport for London, my transport agency, is being involved to ensure that we provide the high-quality public transport essential to make these new communities thrive.

London has been developed as a relatively low-density city and in future we must build at higher density in the right locations. This is not just to increase housing supply and make the best use of urban land, but to secure the benefits from higher-density, high-quality, vibrant urban development. Higher density can make a difference – by realising greater development value, which makes possible better-quality design and the use of higher-quality materials and landscaping – and can deliver important planning obligations, particularly affordable housing. It also supports more local shops, services and facilities, creating better places to live.

Higher density does not mean high-rise towers – although there will be some in prominent places near excellent public transport. I mean higher-density flats of more than 100 homes to the hectare and family housing of 50-175 homes to the hectare, such as perimeter blocks with central courtyards – a highly successful housing type.

Some have said that the draft London plan target of 50% or 10,000 affordable homes a year is too high and that there is not enough public subsidy to fund the new affordable homes. Others have said that it is too low, and that we should be setting much more stretching targets.

I have based the targets on solid and detailed research into the economics of housing development. The groundbreaking work on residual value by researcher Three Dragons and Nottingham Trent University demonstrates that my targets can be achieved. My plan emphasises that the targets will need to be interpreted by boroughs in a flexible way, looking at sites and their particular circumstances on an individual basis.

Joint research with the House Builders Federation has shown that housebuilding activity has been increasing recently, at a time when affordable housing policies have been tightening. And it certainly looks from the financial results and share price performance of housebuilders operating in London that they are doing good, and highly profitable, business.

Getting up to 10,000 affordable homes a year would be a major step forward. At present, we are not even building 5000 and are failing to keep pace with continuing losses from right-to-buy sales and demolitions. But progress is being made – the numbers are going up. The Housing Corporation has allocated London an additional £102m public subsidy this year and I am waiting with expectation for details of the allocation of the additional money announced in the spending review.