Are we winning the battle for affordable housing?

The Viability Loophole. Pic: Ella Milburn

That London is in the midst of a housing affordability crisis is news to no one, least of all the millions of renters in the capital struggling to meet their monthly payments.

The average price of a house in London is £600,000: around 15 times the average salary and more than double average prices anywhere outside the south-east of England. In London, 35 per cent of people now spend more than half of their salary on rent.

It’s a problem everyone acknowledges but one that successive administrations — Labour and Conservative — have roundly failed to address.

Even the definition is problematic, making the battle for affordable housing, in the words of co-founder of Architects for Social Housing Simon Elmer, “a complete red herring”.

Affordable housing, by definition, includes up to 80% market rates, arguably hardly affordable to most people. In her book Big Capital, Anna Minton describes the term as “Orwellian”. Indeed, a two-bedroom flat in Wood Wharf in Tower Hamlets was on the market last month for £1989 a month — meaning £1591 per month would be deemed affordable. Compare this to average social rent for a two bedroom property in London at £427 per month and it’s clear that so-called “affordable” housing won’t serve the people that need it most.

Campaigners say the affordability crisis is caused by developers and landowners, who for the last decade have been swindling areas out of affordable housing by using the “viability” process — looking at whether the profit generated by a development is higher enough than the cost of developing it.

The documents showing how these “viability assessments” are carried out are kept confidential and out of reach from public scrutiny, but have resulted in the loss of thousands of homes that would otherwise have been built in accordance with London boroughs’ Local Plans.

Recently, however, the conversation seems to be changing on both a national and local level.

Last month, Theresa May and housing minister Sajid Javid directly targeted developers who dodge affordability commitments in the government’s most forthright comments on the matter yet. May accepted that young people are “right to be angry” that successive governments had “failed to build enough of the right homes in the right places”.

In August, Sadiq Khan’s Homes for Londoners initiative published guidance promoting transparency around viability and increased affordable housing in new developments. And this month, government guidance has proposed restricted use of viability testing to developments which do not comply with local authorities’ affordable housing targets.

Bristol and Croydon have become the latest councils to commit to publishing viability assessments, joining a small but growing band of local authorities to follow the example set by Islington in 2015.

The shifts come after growing pressure from campaign groups who oppose developments that don’t meet affordable housing targets, and there some signs they are making progress. One case in Tower Hamlets has seen the deferral of the planning application for the redevelopment of Chrisp Street Market amid opposition from the Save Chrisp Street Market campaign.

But concerns remain that deferrals of planning applications and promises to publish viability assessments are a political move by councils in anticipation of local elections coming up.

Ammar Hasanie, a key member of the campaign who runs a business in Chrisp Street Market, is careful not to celebrate just yet: “We’re glad the council deferred the planning decision but we know that it’s just because the elections are coming up. The councillors feel they have to side with us now because there’s been such strong opposition, but once they’re reelected they’ll probably side with the developers again.”

The publication of viability assessments is an important step in the right direction in terms of democratising the planning process. But to many, this is a baseline-level requirement which would hardly represent the victory for housing transparency it’s been lauded as.

Glyn Robbins, a founding member of campaign group Defend Council Housing, says, “To have any credibility whatsoever, at the very, very least viability assessments must be fully exposed to public scrutiny. I should be able to go to any planning document in my borough where I pay my council tax and look at the figures that justify this shocking failure to meet housing need.”

Even when they do surface in the public domain, these dense, complex and often tedious documents — sometimes hundreds of pages long — arguably remain impenetrable to all but the most tenacious of campaigners. Simon Elmer, co-founder of Architects For Social Housing, says: “The capability of local residents being able to read through 500 page viability assessments can vary from area to area. There’s not always going to be residents who have the time.”

And with “affordable” housing unaffordable to most, Labour councils are suggesting further changes are necessary, proposing tying the definition of affordable to income rather than to the market. As Tower Hamlets housing officer Rachel Blake puts it: “It is completely absurd that we link affordability to markets. You could say anything is affordable if you give it a discount — it doesn’t put it within the grasp of ordinary people.”

For now, the Ministry of Housing, Communities and Local Government has published guidance on viability, in theory stopping developers using viability claims to lower affordable provision after the planning stage.

Pat MacAllister, professor of real estate and planning at the University of Reading, says it’s a strong statement which shows a greater understanding on the part of the government than in previous years: “At the moment, it looks like it represents a shift towards the land value being captured for the community by local planning authorities.”

Is this how it will be interpreted and implemented in practice? “We can be pretty sure that the landowners and the people connected with the landowners will try as hard as possible to fight it,” Pat says, “So we’ll see.”

This article is part of EastLondonLines’ Home Truths series, which looks at how Londoners are losing out on affordable housing. Click here for the full series.

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