William Eichler 28 September 2017

Developers avoid building 700 social homes in borough thanks to loophole

Developers avoid building 700 social homes in borough thanks to loophole

A legal loophole has allowed big developers in Kensington and Chelsea to avoid building over 700 social homes - enough to house those made homeless by the Grenfell fire.

New research by the homelessness charity Shelter has revealed that housing developers have exploited a legal loophole - called a ‘viability assessment’ - to avoid building 706 social homes in the London borough.

Housing developers win planning permission by promising to build a certain amount of affordable homes. However, the developers can use a ‘viability assessment’ to argue they are unable to build those homes because it would reduce their profit margins.

In Kensington and Chelsea, Shelter’s research found, the loophole has been used by developers to reduce the amount of affordable housing from the council’s policy target of 50% to only 15%.

This gap between the council’s target and what was eventually permitted is equivalent to 831 affordable homes, of which 706 would have been social homes.

‘At a time when we desperately need more affordable homes, big developers are allowed to prioritise their profits by building luxury housing while backtracking on their promises to build a fair share of affordable homes,’ Shelter chief executive, Polly Neate.

‘The government must make sure we treat affordable housing commitments as cast iron pledges, rather than optional extras, and act now to close the loophole that allows developers to wriggle out of building the affordable homes this country urgently needs.’

Responding to the findings, Cllr Elizabeth Campbell, leader of Kensington and Chelsea Council, said: 'Housing is a London-wide issue. All boroughs need to work together, and with developers, to ensure the capital has the right mix of housing.

'In places like Kensington and Chelsea, an independent viability report often results in the ability to build more homes, due to the sums of money developers have to pay instead of providing affordable housing on site.

'That said, we are getting tougher with developers to ensure that where affordable housing can be provided - it is. Grenfell has focussed everybody’s minds on the issue of housing and we want to find solutions.'

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