Out-Law News 1 min. read
17 Jan 2014, 2:14 pm
The developer had applied to Greenwich Council to remove an obligation requiring a provision of 20% affordable housing within the 100-home scheme. It lodged an appeal with the Planning Inspectorate after the Council failed to issue a decision.
The application was made under legislation introduced by the Government last year which allows modification of affordable housing requirements for a period of three years where the developer can show that such requirements make the scheme economically unviable.
The Inspector said in his decision (5-page / 87KB PDF) that the developer had submitted an updated viability assessment for the scheme which concluded that the development would not be economically viable with the affordable housing, but that viability would be achievable at a value increase of 10% without the affordable housing.
He said that, based on those conclusions, there was a prospect that the development, without the provision of affordable housing, could be viable and that the discharge of the requirement would "incentivise a start of development" in line with Government guidance on the legislation.
The Inspector said that retaining a reduced percentage of affordable housing was not justified as the viability of the scheme had been found to be dependent on an increase in development value. "Furthermore, the proposed development comprises one 16 storey building, and any phasing of the affordable housing requirement to improve viability would not be appropriate or practical," he said.
The Inspector noted that the Council had argued that there was no justification for the modification because the scheme is unviable at its current development value. It had suggested that any modification should be carried out under a review mechanism if market conditions should improve. The Inspector rejected this because he said such a review mechanism had not been incorporated into the original planning obligation.
The Inspector also noted a suggestion by the Mayor of London that a conversion of the affordable homes from social to affordable rented units would make the scheme viable. However, the Inspector said that this would not change the position that, with affordable housing, the development would be unviable at a development value increase of 15%.
