De­vel­op­ers al­lowed to back­track on low-cost homes vow

Birmingham Post - - NEWS - Neil Elkes Po­lit­i­cal Correspondent

BIRM­ING­HAM’S home­less have been de­nied more than 1,000 lower cost prop­er­ties last year af­ter de­vel­op­ers used a ‘le­gal loop­hole’ to avoid the af­ford­able home dis­count.

Hous­ing char­ity Shel­ter re­vealed that dur­ing 2015/16 in Birm­ing­ham de­vel­op­ers be­hind the con­struc­tion of 2,916 homes were able to back­track on prom­ises to de­liver 1,003 at the af­ford­able rate by ar­gu­ing their prof­its would be un­fairly hit.

Any­one seek­ing plan­ning per­mis­sion of more than ten homes is ex­pected to pro­vide 35 per cent at the af­ford­able rate un­der plan­ning poli­cies - or pay the coun­cil hous­ing de­part­ment equiv­a­lent com­pen­sa­tion to sub­sidise hous­ing costs on an­other site.

But fol­low­ing the eco­nomic crash of 2008 and the down­turn in the con­struc­tion in­dus­try de­vel­op­ers were al­lowed to wrig­gle out of the com­mit­ment if they could show their profit mar­gin had slumped be­low 20 per cent and the site was there­fore no longer eco­nom­i­cally vi­able. The aim was to en­cour­age con­struc­tion to go ahead on sites where de­vel­op­ment might oth­er­wise be moth­balled.

Shel­ter chief ex­ec­u­tive, Polly Neate, said: “What this re­search re­veals is the scale at which de­vel­op­ers are able to use le­gal loop­holes to pro­tect their prof­its and dra­mat­i­cally re­duce the num­bers of af­ford­able homes avail­able for peo­ple.

“The govern­ment needs to fix our bro­ken hous­ing sys­tem – and it must start by clos­ing this loop­hole to get the coun­try build­ing homes that are gen­uinely af­ford­able for peo­ple on mid­dle and low in­comes to rent or buy.”

Shel­ter says that the vi­a­bil­ity as­sess­ment is used most fre­quently on larger sites, man­aged by the coun­try’s big­gest de­vel­op­ers.

It states that there has been a ten­dency to over pay for land only to claw the money back through ditch­ing af­ford­able hous­ing costs.

The char­ity is call­ing for a change in the plan­ning laws to en­sure af­ford­able home tar­gets are met.

Birm­ing­ham’s cab­i­net mem­ber for hous­ing Peter Grif­fiths re­sponded: “Hous­ing is the city coun­cil’s high­est pri­or­ity and we are com­mit­ted to pro­vid­ing high qual­ity af­ford­able hous­ing which is avail­able for peo­ple who are un­able to ac­cess or af­ford mar­ket hous­ing. We will con­tinue to en­sure that not only the right num­ber of homes are pro­vided, but also that the right type and qual­ity of homes are built to cre­ate mixed, balanced and sus­tain­able neigh­bour­hoods.”

The coun­cil said that it car­ries out an in­de­pen­dent re­view of the vi­a­bil­ity as­sess­ment to en­sure the de­vel­op­ers’ fi­nan­cial claims are ac­cu­rate.

De­vel­op­ment di­rec­tor Wa­heed Nazir (pic­tured) said: “In the last two years, the city has ne­go­ti­ated in ex­cess of £4 mil­lion of ex­tra con­tri­bu­tions from was ini­tially of­fered by ap­pli­cants.

He added: “The un­der­sup­ply of af­ford­able hous­ing is an is­sue across the coun­try, not just in Birm­ing­ham, which go back decades, due in a large part to the re­duc­tions in pub­lic grant avail­able and fi­nan­cial re­stric­tions placed on lo­cal au­thor­i­ties.

“We will con­tinue to make the best use of the fi­nance avail­able, in­crease the di­rect pro­vi­sion of new homes by the coun­cil and max­imise af­ford­able hous­ing pro­vided through de­vel­oper con­tri­bu­tions.”

An­drew Whi­taker, plan­ning di­rec­tor at the Home Builders Fed­er­a­tion (HBF), said: “We have be­come in­creas­ingly reliant on the pri­vate sec­tor for af­ford­able hous­ing pro­vi­sions, in ad­di­tion to ex­pect­ing con­tri­bu­tions to­wards in­fra­struc­ture and lo­cal ameni­ties. How­ever, there is a limit as to what can be ex­tracted from de­vel­op­ment sites be­fore they be­come un­vi­able.

“With­out a will­ing landowner and de­vel­oper you get no de­vel­op­ment and thus no af­ford­able hous­ing.”

The Govern­ment needs to fix our bro­ken hous­ing sys­tem and it must start by clos­ing this loop­hole

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