You probably don’t need reminding of this, but London housing costs are really, really high. This, of course, is largely down to the city’s booming economy, swelling population, and the increased interest of international buyers in London property. But it also has a lot to do with our planning policy.
London’s city government has, for some time now, attempted to make sure that affordable housing is built alongside fancy pads for millionaires. In the 90s, Mayor Ken Livingstone set a rule that 50 per cent of homes in any new developments would need to be affordable. On reaching office in 2008, new mayor Boris Johnson promptly got rid of this requirement, claiming that a one-size-fits-all target had been counterproductive. He also redefined “affordable housing” to mean “80 per cent of market rates”, which in most boroughs means “still not very affordable”.
What we’ve been left with are the affordable housing targets set in the 2008-9 London Plan, and then divided up over 32 boroughs. So did we hit those?
Not even close. This graph shows the admirable efforts of boroughs to meet their targets in the three years to 2013:
Click for a larger image. Source: London Poverty Profile.
Oh, Kensington.
While part of the problem is a lack of private companies willing to build loads of housing, there are also quirks and loopholes in planning policy which allow councils and developers to build developments with little or no affordable housing, and all without breaking any rules. For those that do ostensibly make their contribution, there are other ways to undermine the entire point of mixed-use housing, by segregating developments based on class.
Here, for your delectation, are six such clever tricks.
1. You can get out of building it altogether
There’s a bit in the Town and Country Planning Act (it’s Section 106, for all you planning geeks out there) that lays out how a new development must fulfil certain conditions in its host commuity to get planning permission. In London boroughs, this includes providing a certain amount of affordable housing.
However, there’s also a caveat. While, of course, politicians want us to have affordable housing, they also realised that developers might not always like the idea as much as they do. In a review of the policy, the Department for Communities and Local Government noted:
Unrealistic Section 106 agreements negotiated in differing economic conditions can be an obstacle to house building.
In human-speak, this essentially means “if developers have to build affordable housing, they might not bother to build at all, so let’s drop the whole thing”.
Developers aren’t completely off the hook: the policy relies on a “viability test”, through which developers must prove that including affordable housing would not be economically workable, and they instead have to contribute to community building or affordable housing elsewhere in the borough (see number 6 for a loophole to this loophole). As of late last year, there are also exemptions for people building their own home, and small sites of 10 units or less.
2, You can make affordable tenants use a “poor door”
Planning policy dictates that a certain amount of housing in a development should be affordable. Unfortunately, though, there are no rules or guidelines against segregating your shiny new building into “rich people’s houses” and “everyone else’s houses”. Often, developments keep the different types of homes separate, even within the same building, and install separate entrances to make sure no one forgets their place.
One Commercial Street (poor door not shown – it’s round the back). Image: Redrow.
At One Commercial Street, for example, the Guardian reported that affordable housing residents aren’t allowed in through the fancy lobby – they have a special side door. Even bike racks and mailboxes are kept separate.
3. You can get out of building it by saying a poor door would be too expensive
In perhaps the most illogical planning decision ever, Southwark Council gave planning permission to a development in Elephant and Castle last year without any affordable housing provision at all, because the developers claimed it would be “too expensive” to keep their rich tenants safe from the plebs.
One the Elephant. Image: Lend Lease.
The developers’ reasoning was summarised thus in the council’s report, which concluded affordable housing would make the scheme economically unviable for poor old Lend Lease:
A second core would be required to provide separate access, including lifts and circulation areas, to socially rented accommodation within the development…. the cost of construction would increase with the introduction of a further lift, as well as separate access and servicing arrangements.
And, in case you were wondering, they had to have separate entrances, because “not doing so would have significant implications on the values of the private residential properties”.
4. You can make a lack of affordable housing a selling point
Since, apparently, all rich people are dicks, it turns out you can use your affordable housing-dodging as a marketing ploy.
This leaflet was used to advertise the Abbey Wood development in Greenwich at a Hong Kong property fair last month. In case you were wondering, the development contained 23 units of affordable housing (11 per cent of the total, and well below Greenwich’s targets) and, as they cheerily proclaim, no social housing whatsoever:
Image: Development Securities (Red box is ours).
Take advantage of Crossrail! Avoid those less fortunate than yourself! Who could say no?
5. You can get out of building it altogether (part 3)
Back in November, the government introduced something called “vacant building credit”. This basically means that if a company demolishes or converts a vacant building, they only need to build affordable housing, or make affordable housing contributions (see loophole 1), for any floorspace they’re adding to the property. So if a developer demolishes an empty building of 60,000 square feet, and builds an entirely new one with exactly the same floorspace, they don’t have to many any affordable housing contribution at all.
This is, as you may have guessed, a terrible idea. Westminster council alone has estimated it could lose as much as £1bn in affordable housing payments as a result.
Even the developers – the people the policy was designed to encourage – aren’t happy: the Westminster Property Association, a lobby group which counts many large property development companies as its members, said the policy was “deeply flawed” and could lead to “a further erosion of the ability of people from a wide range of backgrounds to live in the heart of the capital”.
6. You can avoid the planning process completely
Until May 2016, a rule known as “prior approval consent” allows companies to develop sites without planning permission if they’re converting offices into housing. As a guide to the policy on the website of Kemp & Kemp, a property consultancy, helpfully explains
The added benefit to the client [a property developer], in addition to the savings in terms of time and costs and uncertainty in running through the conventional planning application process, is that consent via the prior approval route avoids any affordable housing or Community Infrastructure Levy payments. Prior approval consents are exempt from these taxes.
So, in summary: you really are meant to build affordable housing as part of your new development, unless you’re using a vacant building, demolishing a vacant building, converting an office block, or just don’t really fancy it. Housing crisis? What housing crisis?
