Los instrumentos de la saya comunitaria

Figure 19 overleaf shows capital (enhancements and renewals) and operating expenditure projected to be required for all London housing, including both market-rate and affordable units, between 2011 and 2050. Capital enhancement costs relate to the development of new housing units (both market-rate and affordable) and include land and construction costs. Renewals costs relate to new market-rate and affordable housing units (after they are constructed) and to existing affordable and social housing.62 Operating expenses relate to routine maintenance expenses and exclude utility costs. All costs projected are shown in

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Arup also has included separately the costs associated with the remediation of land at major regeneration sites. By benchmarking costs against sites in Stratford sites and drawing on other publicly available sources, we have estimated average requirements of some £400 per square metre for remediation. We assume that, on average, one two hectare site is remediated each five- year period, at a cost of some £8m.

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Including an underlying increase of 2% per annum for capital expenditure.

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Renewals costs have been estimated according to lifecycle renewal of structural elements, such as roofs, floors and ceilings, as well as replacement of significant fixtures and fittings, such as doors and windows. Costs associated with the renewal of existing market-rate housing have been excluded from our analysis.

2014 prices, including a 2% increase per annum of capital costs (both enhancements and renewals) due to construction industry price inflation.

In the period from 2016 to 2050, we estimate total housing-related expenditure, including both the private and public sectors, of some £800 billion. Capital expenditure, including enhancements and renewals, is projected to total some £547 billion in the period, representing some 68% of total projected housing costs. Of this capital expenditure, the costs associated with new unit delivery in the public and private sectors are projected to total some £437 billion, given the high number of new units required. As we discuss in the next section of this chapter, these enhancement costs are likely to split near evenly between market-rate and affordable housing, given the SHMA’s assumptions about the future of London’s housing market.

The on-going renewal of both new and existing housing in London is projected to require some £110 billion between 2016 and 2050. It is assumed that renewals costs will relate to on-going lifecycle renewals (such as replacing roofs and floors) as well as on-going investment in energy efficiency and other ‘decent homes’ type investment of London’s existing affordable housing stock. 63 The aforementioned renewals costs are projected to total some £92 billion between 2016 and 2050. Our projections also include the costs estimated to be required for lifecycle renewal of London’s new housing stock. The renewal of new housing (including both market-rate and affordable units) is projected to require some £18 billion between 2016 and 2050.

In total, some £253 billion of operating expenditure64 is projected to be required between 2016 and 2050, increasing from £7 billion in the five years between 2016 and 2020 to some £76 billion between 2046 and 2050. Figure 20 shows projected expenditure requirements by five-year period between 2016 and 2050. As can be seen, maintenance expenditure is projected to increase significantly with the number of dwellings, rising at an average annual rate of 8.4% between 2016 and 2050.

In the five year period to 2020, it is projected that capital expenditure (on new housing in addition to renewals activity) could more than double as compared to

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We have assumed London boroughs’ existing housing stock totals some 410,000 units, whilst providers’ housing totals some 391,000 units. We have estimated that the renewal of existing private registered provider housing to total some £21 billion in the period. The renewal of existing London borough housing is projected to total some £60 billion in the period.

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Note that other operations costs, including utilities and cleaning, are excluded from these costs projections.

£bn 2014 prices, five year period ending

2011- 2015 2016- 2020 2021- 2025 2026- 2030 2031- 2035 2036- 2040 2041- 2045 2046- 2050 Total 2016- 2050 CAGR 2016- 2050 Capex 30 54 61 68 76 85 96 107 547 2.3% Enhancements 21 44 49 55 61 68 76 85 437 2.2% Renewals 9 10 12 13 15 17 20 22 110 2.7% Opex 3 7 13 21 32 44 59 76 253 8.4% Schools total 33 61 74 89 108 130 155 183 800 3.7%

Figure 19: Projected capital and operating cost requirements by five-year period, 2011-2050, market rate and affordable housing. 2014 prices, including c.2% p.a. construction industry price growth for capital expenditure requirements. Source: Arup analysis

the previous five years, growing from an estimated £30 billion to £54 billion, if London delivers the new housing requirements set out by the Mayor. 65

Land costs, assumed in to represent 45% of total new home delivery costs, are projected to total some £197 billion over the study period.

2.3.1.1

Affordable and market rate housing costs

In the SHMA scenario, affordable housing comprises about half of all new units built until 2050. Affordable housing enhancement costs (land and construction) are projected to total some £216 billion in the 35 years to 2050. In the same period, private sector housing construction costs (construction and land) are projected to total some £221 billion. Projections are shown in Figure 21 overleaf.

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Please note that these are indicative costs rather than outturn costs. Arup unit rates (including construction and land costs) have been applied to the average number of units delivered over a typical five-year period.

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 2011-2015 2016-2020 2021-2025 2026-2030 2031-2035 2036-2040 2041-2045 2046-2050 £m

Enhancements (new housing units) Renewals Maintenance

Figure 20: Housing expenditure, including both market rate and affordable housing, 2016- 2050 (SHMA scenario). 2014 prices, including 2% p.a. increase to account for construction industry inflation for enhancements (new housing) and renewals. Source: Arup analysis.

As can be seen in Figure 22, significant investment is projected to be required in relation to affordable housing stock renewal. Some £100 billion of costs are projected to relate to affordable housing renewals. We have estimated that renewal of London boroughs’ affordable housing will be more costly than that of private registered providers.

Figure 22: Affordable housing renewals costs for existing units (SHMA scenario), 2016- 2050 (£ million). 2014 prices, including a c.2% per annum increase for construction industry price inflation. Source: Arup analysis

The renewal of existing private registered provider housing has been estimated to total some £21 billion in the period. The renewal of existing London borough housing is projected to total some £60 billion in the period. We have assumed

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2011-2015 2016-2020 2021-2025 2026-2030 2031-2035 2036-2040 2041-2045 2046-2050

New stock (affordable only) Existing (LB) Existing (PRP) Other upgrades 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 2011-2015 2016-2020 2021-2025 2026-2030 2031-2035 2036-2040 2041-2045 2046-2050 Market rate - new construction Affordable - new construction

£m

Figure 21: Affordable and market rate housing enhancement costs, including land and construction costs, for new units (SHMA scenario), 2016-2050 (£ million). 2014 prices, including a c.2% per annum increase for construction industry price inflation. Source: Arup analysis

London boroughs’ existing housing stock totals some 410,000 units, whilst providers’ housing totals some 391,000 units.

The figures presented above exclude costs projected to be associated with the renewal of newly constructed affordable housing and those costs projected to be associated with the renewal of newly constructed market rate housing. New unit renewal is projected to total a further £29 billion, divided approximately in equal measure between market rate and affordable housing.