Inside TfL’s mission to build thousands of affordable homes

The long-term aim is for the company to reduce TfL’s reliance on income from fares – all after-tax profits will be reinvested in the transport network.

Mr Craig says the team took inspiration from transit authorities in Asia, such as Hong Kong’s MTR, Singapore’s LTA and JR East in Japan, which have subsidiaries that develop property above and around train stations. 

“There was no question whatsoever of any kind of fire sale of assets,” he says. “Instead, there was a recognition the right answer here is to focus on the long term.”

However, the need for TfL to raise more money is acute. Central government has repeatedly insisted that the authority makes better use of its assets as a condition of funding settlements.

The question, then, is whether noble goals like the 50% affordable housing target might fall away amid the imperative to plug the hole in TfL’s finances.

Mr Craig explains that the 50% pledge is a “quid pro quo” from mayor of London Sadiq Khan, who has long promised to build affordable housing on TfL-owned land, in exchange “for having access to the best asset base in the capital”.

“I genuinely don’t regard 50% affordable housing as something that’s imposed on us,” he says. “We’ve got to do the best that we can with it to address the real challenges that London faces. We’re a commercial organisation, but one that has a very strong, clear environmental and social purpose.”

However, there is some flexibility in TfL’s interpretation of the pledge. It insists that 50% of the residents in its buildings will be in affordable housing, but argues this may amount to fewer than 10,000 affordable homes because affordable units tend to be bigger, family-sized homes than build-to-rent flats.

On the environmental point, Mr Craig confirms that none of TTL’s new buildings will have gas boilers. To stress the long-term thinking at play, he compares TTL to London’s great estates: “We’re kind of like the Grosvenors, the Cadogans, the Crown Estate… [But] our job is more interesting because it’s right across London.”

One year in, Mr Craig says TTL is on track to hit its 20,000 homes target. Work has started on site for 2,121 homes, most recently up to 900 in Acton, the third scheme in a partnership with Barratt.

A joint venture with Grainger is bringing forward four sites: Arnos Grove, Kennington, Nine Elms and Southall. In Barking, 196 homes are being built, and 21 affordable homes will be delivered over Southwark station.

Further schemes at earlier stages include the Earls Court masterplan (potentially 4,500 homes) and a recently launched consultation on Edgware town centre with Ballymore (4,000 homes).

Elsewhere, a partnership with Network Rail has the potential to bring forward thousands more homes on land where the companies have adjoining interests. “To deliver 20,000 [homes], we’re currently working on something closer to 25,000,” Mr Craig says.

Within the 50% affordable housing pledge, new homes are a blend of social rent, intermediate housing and shared ownership. The mix is decided on a site-by-site basis with the boroughs and the Greater London Authority.

Depending on the joint venture, TTL works with either a social housing partner to develop the scheme or a private partner to develop the affordable housing for a social housing partner selected by the joint venture.

Housing associations in such arrangements include L&Q in Walthamstow and Metropolitan Thames Valley Housing at Wembley Park, both sites developed with Barratt, and Peabody at Barkingside, developed with Countryside Partnerships.

On the market-price end, between a quarter and a third of homes will be build-to-rent and the rest build-to-sell. There is no student housing or later living yet, but Mr Craig is open to the idea.

With a perfect storm of inflation and rising construction costs, it’s a tough time to start a property company. But again, TTL is no ordinary commercial housebuilder: “We’ve made a conscious decision we will develop through the cycle,” he says. “Other people might be waiting until it’s a better time, but by goodness, Londoners need homes.” Plus, he points out, building mid-market residential around the transport network is about as safe a bet as a developer could ever wish to make.

Altogether, TfL owns over 4,500 acres of land, 18% of which is in the green belt. Political commentators have bemoaned the way some land right by train stations – ideal for development – is off limits, having been designated green belt.

However, Mr Craig says TTL is not pursuing any development here: “We can achieve our 20,000 home target without going near green belt land.”

What he is passionate about, though, is building homes on car parks, a position that has proved contentious to some residents. By keeping car parks in place, he says, we are “encouraging people to drive for longer, with all the congestion, air quality and carbon impacts that has”.

Converting them into housing is “a much a much more efficient and sustainable use of land”, Mr Craig says.

One of TTL’s five sites with Grainger, in Cockfosters, has stalled for just this reason.

In March 2022, then-transport secretary Grant Shapps stepped in to block the 350-home application, citing concerns over “inadequate” parking provision. With a holding order in place, “there’s really nothing we can do with it”, Mr Craig says.

However, since the other four Grainger sites have been approved, he does not expect this to be a recurring problem. Rather, the biggest challenge TTL has wrestled with in recent months is the fluctuating cost of financing.

Perhaps the most important decision for the company is one it still has yet to make: its name. TTL was as a temporary convenience; it was actually an old company, set up in 2014 to hold TfL’s shares in Earls Court, and never intended to be “public facing”.

Whatever title he chooses, Mr Craig says, it will be associated with TfL: “We’re proud of the fact that we’re part of this organisation.”

Update: at 15.51pm, 17.04.23

The headline of this story was changed from ’Inside TfL’s mission to build 10,000 affordable homes’ to ’Inside TfL’s mission to build thousands of affordable homes’. An explanatory paragraph was also added. TfL insists that 50% of the residents in its buildings will be in affordable housing, but argues this may amount to fewer than 10,000 affordable homes because affordable units tend to be bigger, family-sized homes than build-to-rent flats.