1. Governance
March 16, 2016

The document you aren't allowed to see: how viability assessments undermine London’s affordable housing

By Barbara Speed

Someone sends you a letter saying you must move out of your home in the next three months, because it is due to be knocked down to make way for a new development.

You ask why you can’t stay when the new development is built. They tell you the new homes will be much more expensive, for reasons contained in a special document, compiled by a special agency specialising in these documents.

You ask to see the document. They say you can’t. You ask why. They say it’s because if they showed you the document, they might not make money from their new development. You ask again why none of the new houses will be ones you and your neighbours can afford. The reasons are all there, they say, in the document you’re not allowed to see.

For people across Britain, and especially in London, this isn’t just the opening to Douglas Adams’ The Hitchhiker’s Guide to the Galaxy, where an eviction notice is publicly displayed at the bottom of a locked filing cupboard. It’s what actually happens, over and over again, as social housing estates are demolished to make way for new developments, many of which fail to meet borough targets for affordable and social housing and therefore mean ex-residents can’t return.

Building a large proportion of affordable units, it has been decided in most of these cases, is “unviable”. Which basically means it won’t make enough profit.

Problem is, we’re not privy to the calculations which have led to this decision, because they’re contained in a special “viability assessment” document compiled for developers by an outside agency, seen by some (but often not most) of the planning committee, but hidden from everyone else for “commercial reasons”. Outside checks on whether land has been over-valued, or expected profits under, is therefore impossible.

Even members of planning committees are sometimes shown only summaries and conclusions from the assessmentSometimes, residents or interested parties succeed in getting hold of a viability assessment by appealing to see it under a Freedom of Information request – but even then, it might come back looking like these pages from one for 1 Blackfriars, since the information contained is deemed “commercially sensitive”: 

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Southwark’s Heygate estate was demolished between 2011 and 2014 to make way for a new development including only 70-odd socially rented and 500 “affordable” (i.e. below 80 per cent of market rent) homes on an estate of 2,500 units. Needless to say, it fell well below Southwark’s 35 per cent affordability target for all new developments.

The estate was sold to developers Lend Lease for only £50m (despite the fact that removing residents alone cost around £44m); residents were moved out using compulsory purchase orders.

There was an obstacle, though: teacher Adrian Glasspool refused to leave his home of 16 years on the estate until he was forcibly evicted in November 2013.

Since his eviction, Glasspool has campaigned to view the viability assessment for the estate, and last summer, he finally succeeded. It wasn’t easy – he submitted his first Freedom of Information request in 2012, and battled Southwark council and the information commissioner over the next two years.

Part of the reason for his anger, he told me recently over email, was that the residents didn’t have adequate warning that the estate would contain so few affordable properties: “Had tenants been told at the start that their ‘right to return’ to the estate would be limited by the number of social rented units deemed viable, I certainly think the redevelopment plans would have been received differently.”

In his decision on Glasspool’s appeal, the Information Commissioner actually acknowledged the somewhat surreal experience of being told something is not possible because of information contained in a document you are not allowed to see:

Mr Glasspool and fellow campaigners in the Elephant Amenity Network felt frustrated in the course of these consultations because challenges to the amount of affordable housing… were rebuffed by reference to the viability assessment, a document to which they did not have access.

In the end, the commissioner ruled that certain information from the assessment must be released, while other sections could remain private.   

As expected, the released sections of the report’s contents were confused and disappointing: the viability assessment named 25 per cent as the minimum profit expected on the estate, despite the fact that Lend Lease, the developer, agreed a 20 per cent profit margin with Southwark in its Partnership Agreement.

The District Valuer, who reviewed the viability assessment, also said that Lend Lease’s predictions for sale prices on the properties were “too conservative”. Lend Lease quoted a sale price of £600 per square foot, yet 35%,a Southwark-based pressure group, has found that the group is now advertising properties for an average £1,012 per square foot.

Incidentally, in a nearby tower development Lend Lease are offering no socially rented homes at all. They claimed that installing separate lift shafts and entrances would make the development too expensive; while allowing residents to use the same entrance would have “significant implications on the values of the private residential properties”.

While it’s too late for the Heygate, this and other exposures of viability assessments’ shortfalls and the need for scrutiny may be bringing about change. In December,  Southwark council leader Peter John proposed a new planning law for the borough which would require developers to achieve the 35 per cent affordability target, or else publish their viability assessments publicly. Mark Williams, Cabinet member for regeneration and new homes, finally acknowledged that perhaps residents’ concerns were more important than developers’ commercial ones:

“We know developers don’t want to share this information for commercial reasons, but we want our residents to see the workings and understand that we do all we can to get the best deal for Southwark.”

The plan will hopefully pass into law this month.

Similar policies are appearing in Greenwich (following a Bureau of Investigative Journalism investigation) and Islington, but are still lacking in other boroughs and councils across the country. 

As it stands, councils and developers are able, and almost incentivised, to cling onto the shreds of information which could give their critics legitimacy and weight until it’s too late for them to use them. Meanwhile, those without knowledge of FOI law and the legal jargon to wade through information commissioner rulings have little hope of ever seeing the information upon which rulings have been based.

Other assessments – health and safety, water, sustainability, transport are submitted as a matter of course to the public. The redevelopment of the West Ham stadium, which came under attack for its initial plan to offer no affordable homes at all, has over 170 public documents associated with the application on the Newham borough planning website. The viability assessment was the only one missing. 

And so, for now at least, the most controversial aspect of any development in a London parched dry of affordable housing still goes unscrutinised by those outside a select group. Until there is better transparency on this, we’ll be at the mercy of what a single group of people mean by “viability” – and what a single group of people think the future of housing should look like. 

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