London mayor: Developers must build low-cost homes or publish finances

Developers who fall short of requirements to build low-cost homes will be forced to make financial records public to show why they cannot build more, under plans by announced by the mayor of London on Wednesday.

Mayor Sadiq Khan has asked London’s boroughs to confront the city’s shortage of affordable housing by forcing developers to submit plans for scrutiny by city hall experts, following a high profile project where promised low-cost homes were scrapped.

Plans that meet minimum thresholds for affordable housing, set at 35 percent of homes built on private land or 50 percent on public land, will be given a fast-track route to secure planning permission, said Khan.

But those that fail to meet targets could have assessments of developments’ financial viability published online, according to the mayor’s new planning guidance document published on Wednesday.

The plan follows a string of cuts by boroughs to low-cost housing requirements, including at London landmark Battersea power station, where developers slashed affordable homes by 40 percent.

“I’m determined to ensure we don’t have a repeat of what happened at Battersea power station, with developers unacceptably reducing the number of affordable homes on site after planning permission was granted,” Khan said in a statement.

House prices in London have risen 90 percent in the past decade as the city has failed to meet house-building targets.

The housing crisis is the greatest challenge facing Londoners today, with the city failing to build the 50,000 new homes it needs each year, Khan said.

Khan said his plan will help raise affordable housing levels from a low of just 13 per cent.

Under current rules, developers can apply to boroughs after planning permission has been granted to cut the number of pledged affordable homes if they argue the scheme becomes less viable. Khan is seeking powers from central government that would allow him to formally intervene to prevent low-cost housing cuts. Sian Berry, chair of the London Assembly housing committee, said the rules will prevent developers making excuses for not building low-cost homes but fall behind the demands that some boroughs already make of developers.

“When they go above 35 percent they are allowed to be completely secretive about their viability”, Berry told the Thomson Reuters Foundation.

“In some cases we could get more than 35 percent, and this is going to create a maximum – no one is going to give more than that now. The 50 percent requirement on public land shows that it is possible to build more.”