Challenge to London affordable housing guidance partially upheld

Out-Law News | 25 May 2018 | 4:00 pm | 3 min. read

A legal challenge to the mayor of London's affordable housing guidance brought by a group of retirement housing developers has been partially upheld by the High Court.

However, Mr Justice Ouseley has not yet decided whether to quash the whole or part of the affordable housing and viability supplementary planning guidance (SPG), which was adopted by the authority in August 2017 or to take no further action. He is seeking further submissions from the parties before making a final decision on the appropriate remedy.

The SPG introduced a 35% flat rate for affordable housing provision on wholly privately-funded schemes built for sale. Developers which can commit to 35% affordable housing provision need no longer produce a viability assessment, and are able to take advantage of a 'fast track' approvals process provided that they meet other planning requirements.

Specialist retirement housing providers McCarthy & Stone, Churchill Retirement Living, PegasusLife and Renaissance Retirement have argued that the SPG will make it "economically impossible to bring forward private retirement development in London", as it is not feasible to provide this proportion of affordable housing within a planned development.

The consortium applied for judicial review of the policy on three grounds: that the SPG should have been subject to independent examination as a new policy; that it should have undergone a strategic environmental assessment; and that it discriminates against older people and women seeking to have their housing needs met in London.

Mr Justice Ouseley dismissed the second and third grounds of the challenge. He partially upheld the first point, after finding that there was "a degree of inconsistency between the London Plan and the SPG".

"It is inherent in the concept of SPG that it purports to supplement and not to contradict development plan policy," the judge said in his judgment.

"I am not prepared to hold that conflict with development plan policy of itself makes a non-statutory document unlawful. If it states that it is in conflict with the development plan because that plan is now out of date, for example because of changes in government policy as might be found in the [National Planning Policy Framework], or because the review of the Plan was delayed for proper reasons, I see no basis for it to be unlawful," he said.

The judge then considered two points of alleged inconsistency put forward by the developers. He found that the wording of the SPG, which indicates that all sites over 10 homes which do not meet the 35% affordable housing target will be subject to at least three viability appraisals, was inconsistent with the current London Plan, which only allows for such an approach for schemes "which are likely to take many years to implement" and where there is a need to address "economic uncertainties which may arise over the lifetime of a proposal".

"This is quite inconsistent with re-appraisals regardless of the actual or expected duration of implementation," he said. "It is also quite inconsistent with re-appraisal, let alone two regardless of time, on every site."

"The SPG moreover is not directed at timescale or economic uncertainties, or at least not only at this. It creates a stick to make the 35 percent threshold carrot more appetising," he said.

The judge noted, however, that policy H6 of the draft updated London Plan incorporates the requirements set out in the SPG. With this in mind, "the status of SPG matters little", he said.

"Draft plans often are inconsistent with their predecessors and are given increasing weight as they progress, as outlined in the NPPF," he said.

"Once the mayor has considered the consultation responses to the draft Plan, the period for delivering which has expired, and has amended the Plan as he sees fit, it will have no lesser weight than the SPG ... The issue about the status and consistency of the SPG is not one of continuing importance," he said.

Planning law expert Kate Brock of Pinsent Masons, the law firm behind Out-Law.com, said that the judge's comments implied that this was "likely to be a victory in name only" for the developers.

"The judge will make his decision on a remedy in the next week, but it's anticipated he will take into account the fact that the current draft London Plan will resolve the inconsistency once adopted," she said. "In practice, therefore, it looks as though developments, including retirement housing, will still need to comply with the SPG requirements. We await the decision next week with interest," she said.