Yesterday’s Sunday Politics in London explored the elaborate methods property developers use in order to contribute as little as possible to the neighbourhoods in which they make billions building homes that almost no one can afford.
Their methods include out-lawyering, out-manoeuvring, out-spending and just plain outlasting any borough that asks for a few more homes priced below market levels or a few more quid for other useful things as part of granting planning consent than the developer claims it can afford.
How the viability of developments is defined and who by is becoming a hot, if complex, political topic. It has also spawned a sub-industry of figure-finessing consultants who help developers find ways to plead poverty to council officers and sometimes inexpert or under-informed politicians coping with the latest swings of Eric Pickles’s “localist” axe. And if they still can’t get their way, they know they’ll get a sympathetic hearing at City Hall - if they haven’t already had one - where Boris Johnson can simply bulldoze recalcitrant boroughs out of the way on their behalf.
Of course, in some cases developers find themselves pushing at an open Town Hall door. I’ve previously reported criticisms of Capital and Counties’ (Capco) self-assessment of the viability of the Earls Court Project, the worst major redevelopment scheme in London. The then Conservative-run Hammersmith and Fulham council, led during its love-in with Capco by Johnson deputy and would-be successor Stephen Greenhalgh, seemed to see its main responsibility as lying down in whatever way made it easiest to be walked over.
The Sunday Politics spoke to Stephen Cowan, who led Labour to victory over the Tories last May. He said his administration has now revisited a bunch of deals done by its predecessor and extracted substantially better contribution from a number of them (though negotiations over the H&F parts of the Earls Court scheme are still ongoing, of which more in the coming days). Cowan called the present viability state of play “the great London rip-off”.
The programme also heard from Shane Brownie, who represents residents of the Greenwich Peninsula displeased by Labour-run Greenwich’s permitting a large reduction in the amount of affordable homes originally negotiated for four of the site’s 11 plots and the re-allocation of what remained to the least desirable parts of the site. After an 18-month Freedom of information struggle, Brownie recently forced the council to disclose in full the viability study it had commissioned to assess developer Knight Dragon’s case for these changes.
At the time, Brownie’s lawyers Leigh Day commented:
The back drop to this case is that there is a growing trend that councils are routinely accepting viability reports and acquiescing to a much decreased percentage of affordable homes on big developments.
But added:
When these reports are finally disclosed it is generally too late to challenge the given development in the event that discrepancies are uncovered.
The same “after the fact” point was made by Sunday Politics studio guest Dr Bob Colenutt of Northampton University, who is an expert in housing and planning issues (and a former Labour councillor in London). Colenutt also observed that the backdrop to viability assessments is national planning policy guidance which favours developers and landowners and puts councils on the back foot.
Any future London mayor worth electing would seek to challenge this situation and could do so by using mayoral powers in a different way from Johnson - rather than deploying them to help developers get away with, in Colenutt’s words, running rings round councils, he or she could make it plain that if viability assessments aren’t tested fully and openly a suitably tooled-up City Hall would intervene.
There would, though, be drawbacks. In the classic case of the Royal Mail site in Mount Pleasant, Johnson can claim that taking the decision out of the hands of Camden and Islington councils will mean that the affordable homes commitment he was able to secure will be delivered sooner than any higher number the two boroughs intended to dig their heels in for. In in other words, there might be fewer (and more expensive) “affordable” homes than there might otherwise have been, but at least they’re now in the pipeline.
A credible post-Johnson housing policy would have to include provision for making up for any fall off in supply caused by taking a tougher line on viability and, indeed, the whole process by which Section 106 community benefit agreements are reached at borough level and, as we’ve seen at Greenwich, later backed out of. Ken Livingstone pledged in 2012 to use the GLA’s borrowing power to raise money for building affordable homes. At least one Labour mayoral hopeful is looking at the same sort of idea. More details soon, maybe?
The Sunday Politics in London piece on viability can be watched on BBC iPlayer for the next six days. It starts at 41 minutes.
