Editor’s comment: Developers shouldn’t be calling shots
- Credit: Archant
When it applied for permission to demolish the old Bernard Morgan House and build 104 luxury flats with a private cinema on the Golden Lane Estate, Taylor Wimpey argued that it couldn’t afford more than a £1.5million contribution towards “affordable” housing.
That’s the equivalent of nine social flats – less than a tenth of the development.
Then it turned out Taylor Wimpey had not only underestimated what the flats would be worth, but also overestimated how much the land would cost. The City of London Corporation told it to come back with £4.5m – the equivalent of 27pc – which was somehow found after all.
For cash contributions that will go towards off-site affordable housing, the City’s own planning policy says this figure should be closer to 60pc.
So why did planners sign off a development with less than half that?
Because, basically, councils prioritise the desperate need for genuinely affordable housing below the expectation that developers should always expect to make a hefty profit. The tail is wagging the dog.
The questionable logic is that if these companies only expect to walk away with, say, 5pc profit – still an eye-watering amount – they simply won’t bother building anything at all.
One wonders what might have happened had the cross-boundary plan for the Golden Lane Estate put the luxury block on our side of the fence: Islington recently reaffirmed its commitment to getting 50pc affordable housing out of every development it signs off.
As I said in this space back in July, if London worked together to insist on that figure across borough boundaries, it could be a powerful tool in tackling the housing crisis.
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But as it is, developers need only go a few yards down the road for a better deal.