Labour condemns housing ‘chaos’ as developers call for policy U-turn

http://www.theguardian.com/society/2015/feb/03/labour-housing-policy-chaos-cheap-homes-exemption

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The government’s housing policies are in chaos, Labour claimed on Tuesday, after Britain’s biggest property companies condemned a scheme allowing them to avoid potentially hundreds of millions of pounds in affordable housing contributions.

Emma Reynolds, the shadow housing minister, has called on Brandon Lewis, the Conservative housing minister, to scrap a new rule exempting developers of empty buildings from paying for much-needed cheap homes after developers warned it risks wrecking London’s social mix.

British Land, Land Securities, the Crown Estate and Grosvenor Estates are among the property companies represented by the lobby group, The Westminster Property Association, which said the policy was deeply flawed, and wrote to Lewis on Monday urging him to scrap it as it stands.

They said: “The unintended consequences of such policies will actually lead to a further erosion of the ability of people from a wide range of backgrounds to live in the heart of the capital.”

Lewis had cast the reform as removing a “stealth tax” that hindered regeneration and encouraged properties to be left empty but councils estimated that it could boost property companies’ profits by hundreds of millions of pounds. The City of Westminster said it stood to lose £1bn in affordable housing contributions and the director of planning at the Conservative-controlled authority, John Walker, described the policy as “insane”.

Reynolds said on Tuesday: “It’s quite something when those who might benefit the most from this ill-thought through policy are calling for it to be scrapped citing the impact on young people and families that need affordable housing.

“David Cameron’s government has consistently and repeatedly watered down affordable housing requirements depriving local communities of badly needed affordable homes, and have failed to assess the impact of their policy. But one thing is clear – it will lead to fewer affordable homes. Ministers should urgently scrap this policy and think again.”

The City of London has estimated the policy will slash around £8m from its affordable housing budget. It said it would work with other London boroughs to seek to overturn it.

The authority’s chief planning officer, Annie Hampson, said the rules “will reduce significantly the ability of local authorities to provide additional affordable housing”, which was concerning given the “crisis in provision”.

The Department for Communities and Local Government has confirmed that it has not formally assessed the policy’s impact, even though its own figures show it affects cash payments to councils towards affordable housing totalling £1.9bn across England last year.

Defending the policy, Lewis said on Monday: “These deregulatory reforms will reduce the cost of converting empty and redundant buildings into new homes. This is part of a package of measures by the government to reduce the number of empty buildings across the country, which is good for both the environment and for society. Excessive section 106 tariffs [which include deals on payments for affordable housing] just lead to no housing, no regeneration and no community benefits.”

Tessa Jowell, the bookmakers’ favourite to become the next mayor of London, has demanded an immediate halt to the exemptions on the payments “until ministers can produce a comprehensive impact assessment that clearly demonstrates it won’t further damage London’s supply of affordable housing”.

She said: “This government is carelessly giving away hundreds of millions of pounds’ worth of affordable homes urgently needed by Londoners, rather than standing firm on the side of families desperate for affordable housing.

“This is a very clear statement of the priority of this Tory-led government. It is a bitter truth about this government that, given the choice between developers’ interests or badly housed families, they seem to choose the developers every time.”