Councils urged to stop developers weaselling out of affordable housing

Housing campaigners have won backing for their bid to stop developers getting around rules meant to ensure affordable housing gets built.

More than 30,000 members of the 38 Degrees online activist group have urged 27 local authorities in England and Wales to make sure developers are following the rules.

Current planning law states that if a developer is set to make less than 20% profit on a new housing development, they do not have to provide affordable or social housing.

But leaked documents have shown how companies are misleading council bosses about profits to avoid meeting their obligation. By undervaluing the prices of the houses and overvaluing labour costs, they can claim their profits won’t hit 20%.

By squirming out of building affordable and social housing, developers are adding to the country’s housing crisis

Wandsworth council in London has been widely criticized for allowing developers to cut 250 affordable homes from the Battersea Power Station regeneration site.

The Mayor of London Sadiq Khan now wants all councils in the capital to make sure developers publish their calculations to show exactly why they cannot provide affordable homes.

Islington, Greenwich, Lambeth and Bristol councils have already introduced a policy forcing developers’ “financial viability assessments” to be made public if they claim they cannot meet council targets of affordable housing.

“By squirming out of building affordable and social housing, developers are adding to the country’s housing crisis as they cream off more profit, putting owning a home even further out of reach for many younger people,” said 38 Degrees campaigner Louie Herbert.

“Together we can stop them from exploiting the current system purely for their own greed.”

More details on the “make housing developers be transparent” campaign can be found here.

Photo: Matt Kieffer, licensed under Creative Commons.