Mayor Sadiq Khan is leaning on developers to improve their affordable housing contributions. In two recent schemes, the mayor has made it clear he expects a reconsideration of the percentage contribution, forcing a rethink of viability assessments.
At Old Oak Common, Khan approved the Oaklands development of 605 new homes, after agreeing a target of 50% affordable units. Originally, the developers Queens Park Rangers Football Club, and Genesis Housing Association had proposed 200 homes as affordable, equating to 33% of the scheme.
Khan has now negotiated that number up to 40% minimum, with an overage moving the figure up to 50%, depending on the profits accrued by the development. The scheme will receive financial assistance from the GLA Affordable Housing Grant Funding scheme to ensure the 40% minimum is delivered.
“The development marks a significant step in realising the huge potential of this part of the capital,” said mayor Khan. “I am pleased that we have been able to increase the proportion of genuinely affordable homes as part of our ongoing efforts to fix the capital’s housing crisis.
“The scale and ambition for this development shows London is very much open for business. Despite the uncertainty caused by the UK’s vote to leave the European Union, it remains clear that developers and investors see long-term potential in our great city.”
Neil Hadden, chief executive at Genesis Housing Association, said: “We are delighted that the redevelopment at Oaklands, in one of Hammersmith & Fulham’s most important regeneration sites, has been approved. We will now be able to provide hundreds more affordable homes for Londoners on a once derelict site.”
“Partnerships such as the one we have with QPR enable us to invest, not only in building new homes, but in developing new communities.”
QPR co-chairman Tony Fernandes said: “We are committed to bringing forward other development sites in Old Oak as soon as possible to create the homes that London desperately needs.“
Khan has also gone into battle in east London, criticising proposals for a 279 unit residential development on the former St George’s hospital site in Hornchurch. There, NHS Property Services submitted a scheme with just 15% affordable units, which Havering borough agreed to.
A GLA report on the scheme noted: “The mayor considered that the application does not comply with the London Plan.
“In particular, the mayor expressed serious concerns with the low level of affordable housing proposed on the site, which represents redundant public sector land. The offer of 15% affordable housing is supported by a viability assessment, however this offer is considered low.
“The applicant’s viability report should therefore be independently assessed on behalf of Havering Council to ensure the maximum is being achieved on-site and the findings shared with GLA officers prior to the stage two referral.”
A spokesman from NHS Property Services appeared to point the finger at the complication of the site being in the Green Belt, saying: “We have worked closely with Havering Council to develop a scheme that is compliant with both local and national planning policy and that will not harm the openness of the green belt in this location.”
“The site is in the designated green belt and green belt policy is set out at a national level in the National Planning Policy Framework and National Planning Policy Guidance.”
LPA Perspective: Khan has fired the first broadsides in the promised battle to come over affordable housing, and viability assessments. A satisfactory compromise has been reached at Old Oak, with an overage agreement that will cream off excess development profit – something that, frankly, ought to be included in many more agreements, and would deliver many more affordable homes. Why should only private developers enjoy the benefit of the rising market?
In Hornchurch, the situation is somewhat different. Again, the completely disjointed approach of the NHS means it works for highest return, not best value, from developing sites – something that was highlighted at a recent GLA hearing. By beating down the affordable housing provision in the name of maximising short term revenue – as the funds are needed to build new hospitals – the NHS shoots itself in the foot.
A far better approach might be to reflect on where its nurses and other lower paid workers will live in the area – and ensure that every scheme it puts forward will include covenanted accommodation for those key workers.