London council takes steps to make developers build more affordable homes

A London local authority is consulting on new rules that are set to make it harder for developers to avoid building affordable homes in their schemes.

Islington Council plans to put in place measures to ‘re-balance’ the viability assessment process, which allows developers to argue that they cannot afford to meet local affordable housing, infrastructure and environmental requirements. The process has resulted in some housing schemes – notably in the high-value capital – incorporating far fewer affordable homes than specified in local authority targets.

Islington council says its draft guidance includes:

  • New requirements to ensure greater transparency, enabling the council and the public to better scrutinise the information submitted. If a developer wants to keep information confidential they will have to demonstrate that this would be in the public interest, rather than purely their commercial interest as has hitherto been the case
  • The guidance seeks to prevent land owners from inflating values and developers overpaying for land at the expense of affordable housing
  • It requires developers to justify the levels of profit that they seek and challenges the notion that this should still be at levels established during the financial crisis
  • It sets out the process for requiring reviews of viability when a development is constructed to determine whether additional affordable housing and other planning requirements can be delivered.

The council has also been working with other London boroughs to share expertise and establish a joint approach to viability.

Councillor James Murray, Islington Council’s executive member for housing and development, said: “There is growing evidence some developers use ‘viability assessments’ to their advantage, such as inflating land costs to say they can’t afford to build affordable housing.

“We’re setting out new rules to make sure developers can’t game the system. We want to make the system transparent, clear, and fair, to help make sure the affordable housing we badly need is built.”

The consultation ends on 4 September.  To read the consultation document go to: http://www.islington.gov.uk/developmentviability

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