City Hall Conservatives have been known to upbraid Labour Mayors by pointing out that 50 per cent of nothing is nothing. The barb has been aimed at planning policies requiring half of all homes in new residential developments in the capital to be “affordable” in some form if permission for a scheme is to be granted.
The argument goes that supplying the 50 per cent would so erode developers’ profits that the scheme would be rendered financially unviable. Result? The scheme is abandoned, meaning no new homes of any kind are built, “affordable” ones included.
Some might dismiss this as a traditional Tory aversion to regulation and an unfounded faith in good outcomes flowing from the free play of market forces. Yet a similar case has been made on behalf of Sir Sadiq Khan in a crisp rejection of Labour-run Wandsworth Council’s proposals for changing its local planning rules.
The affair has illuminated both the mathematical calculations that inform Mayor Khan’s policies in this area and conflicting philosophies about housing supply, including within Labour circles. It has also generated some instructive social media exchanges.
The disagreement began after Wandsworth, which came under Labour control in May 2022 for the first time since 1978, submitted draft plans for a “partial review” of its existing borough Local Plan, which was adopted in July 2023.
Mooted changes included give planning applications for private developer house building schemes a “fast track route” to approval if 45 per cent of the total number of homes envisaged were deemed “affordable”. But Local Plans have to be in what is termed “general conformity” with the Mayor’s London Plan, the capital’s master planning blueprint. The Mayor’s plan has a fast-track threshold of only 35 per cent.
Wandsworth also wants to introduce that are called “late-stage viability reviews” on fast-tracked projects, essentially a way of re-assessing a scheme’s financial calculations to discover if a bit more housing affordability can be derived from it than was originally agreed. This too, says City Hall, is “not in accordance” with the relevant London Plan policy.
Among other issues raised by City Hall is a draft Wandsworth policy about the mix of affordable types in new Build to Rent accommodation and proposed review mechanisms for housing with shared facilities.
The letter also has a section on a Wandsworth viability assessment accompanying its draft Local Plan changes. It says City Hall officers have reviewed this and concluded that “the majority of the scenarios tested” against its provisions “appear to be unviable with 45 per cent affordable housing”.
All told, City Hall thinks what Wandsworth has in mind would result in fewer affordable homes being built rather than the higher number aspired to. In its words:
“Although intended to secure a higher level of affordable housing, in practice this would disincentivise applicants from following the FTR [fast-track route], and require the majority of schemes on private land to be viability tested, slowing down the planning process and requiring additional resourcing to assess applications. Most importantly, it is also likely to result in lower levels of affordable housing being secured and/or reduce the effectiveness of viability reviews.”
Put another way, 45 per cent of nothing is nothing.
The upshot is that the Mayor would make known his “general conformity” concern at future Local Plan consultations and inquiries, which would not bode well for Wandsworth.
The council’s ideas have excited lively debate online. Wandsworth’s cabinet member for housing, Aydin Dikerdem, an unreconstructed Corbynite, has been enthusiastically advocating the proposed changes, as you would expect.
But Sam Dumitriu, head of policy at think tank Britain Remade, said that “forcing developers to sell half the homes they build at a massive discount will kill otherwise viable housing projects”. Referring to Wandsworth’s overall strategy target of 50 per cent affordable, he remarked – obligingly for this article – that “50% of 0 is 0”.
And Chris Worrall, a member of the executive committee of the Labour Housing Group, similarly argued that Wandsworth’s was “bad policy that results in fewer social housing developments”. In a tart aside, he inquired: “Why do marxists not understand maths?” Dickerdem and Worrall engaged in frank exchange of views. Worrall has since written a more detailed critique of Wandsworth’s Local Plan review at Left Foot Forward.
Who is right? I’m leaning towards the Mayor’s point of view on the grounds that not a damn thing is getting built at the moment and his policy chiefs, along with Angela Rayner’s department, are trying every which way to get stalled schemes going as it is, without boroughs providing developers with further reasons for delay.
But, in the end, it’s always, always about balances, priorities, resolving dilemmas and, not to be forgotten, doing whatever it takes to get the most homes with the most affordableness priced in built for as many Londoners as possible. Discuss.
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