The cost and complexity of developments at stations makes them long-term projects, rather than a quick fix to increase the supply of housing and employment space. However, developing at stations has significant potential as a sustainable way to accommodate the city’s long-term growth – generating many social and environmental benefits, as well as potentially crosssubsidising improvements to stations and infrastructure.

This chapter explores the case for building at stations, and assesses the potential of such projects in London.

1.1 The rationale for building at and around stations

Create and intensify land in well-connected places

Like most large, growing cities, London faces a shortage of land for development. Railways make up around one per cent of London’s area ³, but most have gone through minimal change since they were first built. With
London’s outward expansion constrained by the green belt, building over stations and intensifying surrounding streets is one of the ways to provide space for the capital to grow sustainably.

There are advantages to channelling urban growth near public transport – from limiting land consumption, to reducing the need for car use. In established cities like London, building at higher densities near stations also makes the most of existing infrastructure, while making further investment in the network viable in the long run.

These benefits are reflected in the “compact city” model that has been promoted by planners and urbanists in recent years ⁴– for example, by the Urban Task Force and the London Planning Advisory Committee (LPAC).

The Urban Task Force argued that linking development to public transport was necessary to regenerate large parts of the capital – and helped build momentum for large, mixed-used developments focused on King’s Cross and Stratford stations. In 1998, LPAC suggested guidelines to allow higher densities in places with better public transport access – the first version of the London Plan density matrix.

The current London Plan makes reference to the need to focus on development in areas with good public transport accessibility, using public infrastructure to unlock land for development. It identifies Opportunity Areas (OAs) and Intensification Areas (IAs), aimed at enabling development or redevelopment at higher densities in areas with good existing or potential public transport accessibility. Each OA and IA is subject to its own planning framework, encouraging co-ordination between relevant stakeholders, and ambitious targets for residential or employment density. Unsurprisingly given the emphasis on using public transport to unlock development, one in three London stations now sit within
an Opportunity Area ⁵.

The National Infrastructure Commission also recommended active measures to enable Crossrail 2 to support delivery of 200,000 homes. ⁶ Mayor Sadiq Khan suggested in his 2016 vision document that he would take this further, looking specifically at stations:

“Intensifying development around well-connected transport nodes will form an important part of my vision for the city, and I will explore the potential of areas around a number of stations as locations for significant and much higher-density housing development.” ⁷

Developing quality places
Redeveloping land at and around stations is not only an opportunity to increase housing supply – if done well, development can improve both public spaces and the “ecosystem” of civic and commercial uses around stations, augmenting their social function. Stations often act as the focal point of a neighbourhood ⁸, for better or worse. Half of London’s existing stations are located in district or town centres. ⁹ Redevelopment is an opportunity to provide space for workplaces, commercial and community uses, as well as a pleasant public realm. In less-built-out parts of town, station redevelopments can be used as anchors for new or revitalised parts of the city – “new destinations” – as is the case in Stratford and North Greenwich in east London, or in the upper Lea Valley, where Angel Road station is being rebuilt to unlock the 82-hectare Meridian Water development.

Developments at stations are also an opportunity to better connect neighbourhoods. Stations may be beautifully designed, but railways often act as barriers between neighbourhoods, sometimes separating areas with different fortunes – indicated in the expression “the wrong side of the tracks”. The railway embankment at Clapham Junction is a striking example, where over 20 train tracks create a 200m-wide tear in the urban fabric, separating the most- and least-deprived wards in the London Borough of Wandsworth. ¹⁰ Similarly, many central London termini have cut through and shaped the destiny of neighbourhoods on either side. ¹¹

Comprehensive station redevelopment can alleviate this division of urban space: the remodelling of Whitechapel station for Crossrail will add new access points to the north and the east of the station, connecting both sides of the tracks. London’s larger stations, and the major termini in particular, have an important public realm function. Development at stations offers an important opportunity to enhance the placemaking role of London’s station owners and managers.

Private landowners have long seized the opportunities brought about by rail infrastructure, but developments have been piecemeal and of patchy quality, particularly in lower-value areas. Public landowners are now increasingly acknowledging the potential for station development to create quality, mixed-use spaces. Transport for London in particular have signalled their intention to move away from land disposal in favour of partnership arrangements for development; to increase their control over the quality of schemes on their land; and to encourage mixed-use, mixed-income developments. ¹²

Good station developments are likely to increase property values in surrounding streets and can also provide new public spaces, as in the case of Barbican, Canary Wharf and suburban West Ealing. Quality developments also will help ensure that residents perceive the project as improving and fitting in with the character
of their area.

Funding for infrastructure
Changes to how infrastructure projects are funded have pushed transport operators to examine the contribution their property portfolios can make. The need for new sources of funding is especially acute in London, as both operations and capital investment need to keep up with ageing infrastructure and population growth. Transport for London will see its revenue fall in real terms, as central government funding is reduced and the Mayor freezes fares. ¹³

Fiscal restraint also means limited capital investment. Network Rail will continue to be under pressure to meet targets for property receipts and income set by the Office of Rail Regulation, and the government’s recent confirmation of support for Crossrail 2 is subject to further assessment of whether London could meet half the costs of the scheme during construction. ¹⁴

Stations are among the most expensive pieces of urban infrastructure to deliver. TfL’s current estimate is that a third of the costs of Crossrail 2 are for stations and associated works, including improvements to facilitate new interchanges (£10.8bn of £32bn). ¹⁵

New sources of funding have already been explored. To fund Crossrail 1, the government allowed the Greater London Authority to introduce additional taxes on business and property development – the Business Rate Supplement, Crossrail Section 106 and the Mayoral Community Infrastructure Levy. ¹⁶

These will be continued after Crossrail 1 ¹⁷, but they are unlikely to become a major source of funding for upcoming projects given the steep rises in business rates since their 2017 revaluation – and the Mayor’s policy priority that development should subsidise affordable housing. ¹⁸

As a consequence of funding pressures, attention has focused on the potential for capturing land value lifts. Most transport projects improve the connectivity of an area and make it more desirable, which usually translates to higher land values. In the past, railway companies sought to capture these uplifts to fund rail infrastructure and meet operational costs.

Most London railways were built by companies that bought land around stations, developed it and then sold the property once train services were in place; profits from housing enabled the Metropolitan Railway to remain a standalone company well into the Great Depression. ¹⁹

However, transport operators can no longer operate in this way. Restrictions on land assembly powers prevent public bodies from replicating the Metropolitan Railway model. This is unlikely to change in the near future, since the government is wary of allowing transport operators to acquire land for development. ²⁰

What TfL and Network Rail can hope to do is raise revenue from selling, developing, or leasing their current land holdings (or the air rights above them), then using these receipts for capital investment. ²¹ This is not a new concept: the successive bodies overseeing railway land have sought capital receipts on their central London property assets by building above or near stations – for instance at Cannon Street, Charing Cross and Fulham Broadway. Transport for London is now planning to raise £850m by 2021/2022 from development and property disposal. ²² Other approaches to capturing land value uplifts – through taxes or co-ordinated development – are discussed further in Chapter 4.

1.2 The potential for station densification

London has room to grow around stations

Not only does densifying development above and around stations make sense in planning, urban design and commercial terms – there is also clear capacity for such growth in London.

First, TfL and Network Rail are among the largest landowners in London. Transport for London estimates that 10,000 homes can begin construction on their land holdings by 2021 ²³, and Network Rail has announced  plans to release land with capacity for around 5,000 homes in London by 2020. ²⁴

However, the full development potential of transport bodies’ land is likely to be much greater: TfL’s target is based on an assessment of five per cent of their land holdings, and for both TfL and Network Rail, the figures include less complex sites that can be brought forward by 2020 or 2021. Greater investment into decking and land assembly around other stations could unlock more capacity for development in the long term.

Second, many of the capital’s station areas are of relatively low density. A 2015 study by London First and Savills estimated that 1.4 million more homes could be built in well-connected areas if higher residential densities were allowed. ²⁵ In this present study, we looked more closely at the neighbourhoods adjacent to stations, examining the residential density of the areas
surrounding each of the 559 London stations.

We defined these “station areas” as all areas within 1km of a station – which generally equates to a 15-minute walk. The smallest spatial unit for which data on residential density data is available is the Lower Super Output Area (LSOA) – this unit has an average population of 1,700 in London. The LSOAs that comprise or intersect with the 1km station radius are included in the density metric. Hence, the residential density of a station area is an average of the densities of these LSOAs.

This indicator of population density includes green space and water, so underestimates density of built areas.

Unsurprisingly, we found that most stations are surrounded by higher residential densities than the London average. However, 471 of the 559 station areas (84 per cent) are less dense than the London Borough of Islington (London’s densest borough). Full results are laid out in the following chart:

²⁶
As the 1km radius encompasses a rather large area around stations, it could be that some stations are surrounded by both high- and low-density LSOAs – a level of detail that would be lost when calculating the average. So we looked at the residential density of the most dense LSOA within each station area. We found that a third of London’s station areas do not have any ‘dense’ LSOA – that is, any LSOA with a residential density above the inner London average.
However, not all of these station areas will be suitable for densification. Some are employment centres or airports. For others, connectivity, as well as regulations around green space and heritage preservation, will constrain development potential. The London Plan also specifies that development should take into account local context and character. ²⁷
To identify the stations with most potential for densification, we selected station areas that are wellconnected, but have lower residential densities than would be expected from their dominant local character.
METHODOLOGY
• We used ridership as a proxy for good connectivity, defining well-connected stations as being in the 60 per cent busiest London stations, which roughly equates to at least one million entries/exits and interchanges annually.
• The dominant local character for each station area is determined using the following indicator of built form, also used in the London Plan: LSOAs are considered ‘central’ if 75 per cent or more of the residential units are flats; ‘urban’ if 75 per cent of units are flats or terraced houses; the remainder are considered ‘suburban’.
• We excluded stations surrounded by high employment LSOAs, or characteristics that would constrain development potential, such as high proportions of green space (within the top 40 per cent of proportions of green space). We outline the
stations located in a heritage conservation area in the table below. Full methodology is detailed in the on-line Annexe to this report.
Results
The methodology set out above allowed us to identify station areas that are less dense than would be expected from their setting, or “local character”. The finding
are set out below, and a list of these station areas can be found in the on-line Annexe to this report.

²⁸
This suggests there are various opportunities to densify the neighbourhoods around London’s stations, according to their location and dominant built form:

– Central residential hubs: the 40 per cent least dense well-connected stations in a predominantly “central” setting, such as New Cross, Ealing Broadway, Kilburn, Clapham Junction, Sutton or Surbiton.

– Urban residential hubs: the 40 per cent least dense well-connected stations in a predominantly “urban” setting, such as Beckenham Junction, Harrow-on-the-Hill, Wimbledon, Tulse Hill or Upney.
– Suburban well-connected: the 20 per cent least dense well-connected stations in a “suburban” setting, such as Pinner, Purley, Orpington, Upminster or Romford.

This analysis is illustrative, and a case-by-case examination would be needed to assess the potential of individual stations. In some places, station upgrades and new stations will open up a window for development (see Figure 3). Indeed, the rapid growth in passenger numbers has brought forward the need for upgrades: some stations like Bank, Holborn or Camden Town have already become pinch points on the network.

TfL is expecting that at least twenty stations will face severe crowding in the next decade, but their data release only includes stations that would suffer from deferring Crossrail 2.

The capacity crunch on London’s stations is likely to be higher, especially since Network Rail does not keep track on station crowding in the way that TfL does. ²⁹

³⁰

In a growing city, development at stations is a sustainable way of accommodating growth, creating better places, and supporting investment in rail infrastructure. Looking across London, there appears to be significant potential in terms of land availability and existing densities – although realising these opportunities will depend on a number of factors including station setting, ownership of land, engineering complexity, and whether there is planned public investment or an acute need for upgrade. The next chapters look at the challenges involved in grasping these opportunities.