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Tories make U-turn over affordable housing rules Ministers make U-turn on affordable housing dodge
(about 9 hours later)
Conservative ministers have been forced to rethink planning guidance that critics claimed was a shambles and would have allowed property developers to avoid an estimated £1bn in payments towards affordable homes.Conservative ministers have been forced to rethink planning guidance that critics claimed was a shambles and would have allowed property developers to avoid an estimated £1bn in payments towards affordable homes.
This shambles shows that the Tories can’t be trusted to deliver the homes London needsThis shambles shows that the Tories can’t be trusted to deliver the homes London needs
The “empty building credit” would have allowed developers to avoid paying for homes for poorer people if they emptied buildings for a period before converting them to private flats.The “empty building credit” would have allowed developers to avoid paying for homes for poorer people if they emptied buildings for a period before converting them to private flats.
But the government quietly changed the guidance on 26 March to give councils powers to test whether a building had been made vacant for the sole purpose of redevelopment and if they could insist on affordable housing payments.But the government quietly changed the guidance on 26 March to give councils powers to test whether a building had been made vacant for the sole purpose of redevelopment and if they could insist on affordable housing payments.
It also gave councils powers to block attempts by developers who had already agreed to make affordable housing payments from resubmitting planning papers under the new system in a bid to avoid what Brandon Lewis, the Conservative housing minister, branded “a stealth tax”.It also gave councils powers to block attempts by developers who had already agreed to make affordable housing payments from resubmitting planning papers under the new system in a bid to avoid what Brandon Lewis, the Conservative housing minister, branded “a stealth tax”.
The credit came under attack in February by the Tory-led City of Westminster after it was introduced by Lewis.The credit came under attack in February by the Tory-led City of Westminster after it was introduced by Lewis.
The Department for Communities quietly revised it late last month to prevent developers dodging tens of millions of pounds in affordable housing levies per scheme. The rethink was one of the government’s final acts before the dissolution of parliament.The Department for Communities quietly revised it late last month to prevent developers dodging tens of millions of pounds in affordable housing levies per scheme. The rethink was one of the government’s final acts before the dissolution of parliament.
The potential impact of the guidance was reported in the Guardian in February sparking intense criticism from town halls, housing campaigners and the Labour party.The potential impact of the guidance was reported in the Guardian in February sparking intense criticism from town halls, housing campaigners and the Labour party.
Westminster reported it had lost £29m in contributions to housing for poorer people in the course of just one planning meeting when developers were able to renegotiate using Lewis’s guidelines.Westminster reported it had lost £29m in contributions to housing for poorer people in the course of just one planning meeting when developers were able to renegotiate using Lewis’s guidelines.
Tessa Jowell, frontrunner to become Labour’s candidate in next year’s London mayoral election, claimed it would result in a £600m loss in affordable housing in one project alone – the Vauxhall Nine Elms and Battersea Opportunity Area.Tessa Jowell, frontrunner to become Labour’s candidate in next year’s London mayoral election, claimed it would result in a £600m loss in affordable housing in one project alone – the Vauxhall Nine Elms and Battersea Opportunity Area.
The new system sparked legal challenges by several councils but Lewis insisted it was “good for both the environment and for society” and said forcing all developers to pay for affordable homes hindered regeneration and encouraged empty properties.The new system sparked legal challenges by several councils but Lewis insisted it was “good for both the environment and for society” and said forcing all developers to pay for affordable homes hindered regeneration and encouraged empty properties.
Developers will still be exempt from paying for affordable housing on any space in genuinely empty buildings which are being bought back into use.Developers will still be exempt from paying for affordable housing on any space in genuinely empty buildings which are being bought back into use.
Westminster welcomed the changes which they said would eradicate the large majority of losses it faced to its housing budget.Westminster welcomed the changes which they said would eradicate the large majority of losses it faced to its housing budget.
“Many of the developments considered at Westminster so far this year could have put losses into the tens of millions, but we are pleased to see this has been recognised and the rules have been clarified,” a spokesman for the council said.“Many of the developments considered at Westminster so far this year could have put losses into the tens of millions, but we are pleased to see this has been recognised and the rules have been clarified,” a spokesman for the council said.
Jowell said: “These proposals have already put millions of pounds worth of investment on affordable housing at risk. This shambles shows that the Tories can’t be trusted to deliver the homes London needs.”Jowell said: “These proposals have already put millions of pounds worth of investment on affordable housing at risk. This shambles shows that the Tories can’t be trusted to deliver the homes London needs.”
Emma Reynolds, Labour’s housing spokesperson, said the changes were minor and the whole scheme needed to be scrapped because it would reduce even further the level of affordable housebuilding.Emma Reynolds, Labour’s housing spokesperson, said the changes were minor and the whole scheme needed to be scrapped because it would reduce even further the level of affordable housebuilding.
“The Tory-led government failed to assess the impact of this policy on affordable housing,” she said. “Tinkering around the edges of a bad policy can’t hide the fact that David Cameron’s government has consistently and repeatedly watered down affordable housing requirements, depriving local communities of badly needed affordable homes.”“The Tory-led government failed to assess the impact of this policy on affordable housing,” she said. “Tinkering around the edges of a bad policy can’t hide the fact that David Cameron’s government has consistently and repeatedly watered down affordable housing requirements, depriving local communities of badly needed affordable homes.”
Lewis said: “Local councils and the property industry asked for some underlying planning guidance to accompany the new policy which we have duly delivered. Labour’s approach of increasing taxes on housing will just mean fewer new homes.”Lewis said: “Local councils and the property industry asked for some underlying planning guidance to accompany the new policy which we have duly delivered. Labour’s approach of increasing taxes on housing will just mean fewer new homes.”