The good news is that the government's communities plan announced an overall increase in investment in affordable housing for 2003/4 and beyond, with at least £1bn set aside for key worker housing over three years.
However, large parts of London remain virtual

no-go areas for workers on low to moderate incomes. No one now disputes that London has real housing problems. Ridiculously high prices mean that Londoners who used to be able to buy or rent privately can no longer afford to do so. The simple fact is that an income of £50,000 will only begin to get you into the home ownership market nowadays. The severe shortage of council and housing association homes with subsidised rents means that waiting lists for social housing are endless. Even the households deemed to be in the direst need are spending years in temporary and often overcrowded accommodation.

The debate so far has been focused on addressing the needs of the homeless and workers on moderate incomes. Despite all the debate, there is no useful definition of what constitutes a “key worker”. The reality is that there is a whole range of low- to middle-income earners who can no longer afford to buy or rent in the capital. Key workers such as nurses, teachers, police officers and bus drivers, have become the focus of government attention because their absence impacts on us all. But what about the hospital lab technician, the school secretaries, the bank clerks, the shop assistants, the bus mechanics and the social workers who are equally key to making London tick, but have so far not been able to catch the popular imagination and sympathy?

There is a whole range of economically active people who can afford to pay more than the fully subsidised rents charged by social landlords but who cannot afford to buy or rent in the private market. Thanks to the report of the London mayor’s housing commission, these people now have a name. They are referred to as the “intermediate market”. And they are a substantial market.

The simple fact is that an income of £50,000 only begins to get you into the home ownership market

So, what are the solutions? In London, housing associations are already trying to provide some housing for this intermediate market. Shared ownership schemes, which allow a person to buy a share in a property and pay subsidised rent on the remaining part, are a popular way of helping people to get a foot on the property ladder. Other schemes, such as some developed in partnership with health authorities, are enabling newly qualified nurses to share accommodation while they find their feet in the capital. Some housing associations have also managed to use planning deals, free land or properties and cross-subsidy to develop schemes at below market rent without any help from government grant. Impressive as this is, it is still only a drop in the ocean. The scale of need far exceeds what can be provided by these means.

Also, the housing needs of key workers are diverse. Shared housing may work well for young people, but more mature adults and those with children will want something else. London needs to attract and retain a range of economically active people if it is to function as a world-class city. To achieve the government’s aim of creating sustainable mixed-tenure communities requires a spectrum of affordable, accessible housing. This will include shared rented accommodation, self-contained rented, and home ownership in its various guises. Flexibility and choice are essential to meet the needs as careers and lifestyles changes.

In the past couple of years, many public sector employers have taken great strides towards addressing the housing needs of workers, which has helped to attract and retain their workers. But what contribution can private sector employers make? A few London private sector employers are beginning to seriously consider offering their workers the benefits of access to high-quality affordable housing. For example, Boots as a major retailer in London, is making use of accommodation above its stores to address the housing needs of its own employees.