Added on: 30 July 2015 at 12:45:15
Examination in Public Submission: Affordable Housing
Policy IS5 – Achieving a mix of housing including affordable housing
The Battersea Society considers that the Plan makes inadequate provision for meeting the acknowledged need for affordable housing, both in terms of the number of units of affordable housing it is planned to provide and in terms of the nature of those units.
In the Draft Further Alterations to the London Plan in January 2014 the Greater London Authority identified a need for around 49,000 houses a year over 20 years, and up to 62,000 houses a year in the initial years in order to address the historical failure to meet targets. However the targets for additional housing to be provided by each borough in that period total only 42,389 houses a year
(London Plan March 2025, annex 5). There is thus a large shortfall in the total provision for housing in London. Either this housing shortage will need to be met outside the Greater London boundary; or the London boroughs will need to exceed by a substantial margin the ‘minimum annual targets’ they have been assigned by the Mayor; or the shortfall will persist and grow bigger with all the damaging consequences that will entail. Wandsworth’s minimum annual target is 1812 a year. It is not clear from the Plan whether the Council regards it as feasible to exceed that target, and whether it has considered doing so, and if so by how much.
The London Plan seeks to ensure that an average of at least 17,000 new affordable homes are provided a year across London and sets an overall target that 50% of new dwellings from all sources should be affordable, with 70% of these to be for rent. Within this framework, councils are to set their own targets, both for the total amount of affordable housing to be provided and for the proportions of that housing that will be social/affordable rent and intermediate (4.179). Wandsworth’s Strategic Housing Market Assessment (SHMA) concludes that there is a net need for 634 units of affordable housing a year and that the balance of need for social/affordable rent and intermediate housing is close to the London Plan policy.
The Plan does not meet that need. It is estimated to produce less than 300 affordable homes each year for the next 15 years (paragraph c of policy IS5), less than the annual average of 373 achieved in the previous 10 years. Indicative figures for the five years beginning in 2017/18 show a projected recovery to the previous rate. But the provision of affordable housing would still be well below the assessed need of 634 units a year. As well as regretting the Plan’s inability to meet assessed need for affordable housing there are a number of other points we wish to make about the meaning of the figures and about the meaning of affordability.
Gross or net figures?
The assessed need for 634 units of affordable housing a year is described as a net figure. Presumably it has been arrived at by adjusting the gross need to allow for the estimated availability of relets. It is not clear, however, whether the figures for provision of affordable homes represent net additions to the stock of affordable homes or gross numbers of new homes provided. If they do represent net figures it is not clear on what basis the adjustments have been made.
Some areas in the borough containing affordable homes are being redeveloped or are scheduled for redevelopment, for example the Peabody estate in St John’s Hill and the Council’s Winstanley and York Gardens Estates. Social tenants in those estates will need to be rehoused. How many of the newly provided affordable homes will be required for that purpose?
At the same time the stock of affordable homes will be reduced if existing tenants exercise a right to buy their affordable homes. Under government proposals the right to buy will be available to tents of housing associations as well as local authority tenants. Have future losses from these causes been quantified and taken into account in the Council’s calculations?
Moreover there is another relevant feature in the government’s current proposals. Local authorities will be required to sell off the most valuable houses in their existing stock in order to raise funds to compensate housing associations for the loss of their houses bought by their tenants under the right to buy and for the discounts they will have to give those tenants. The possibility that proceeds from such sales of higher-value houses might provide any significant funding over and above that for the construction of new affordable homes is too speculative to take into account; but these further losses from the existing stock of affordable homes which this policy will bring about are more certain and very regrettable.
Type of housing
The figures quoted above are for the numbers of units of affordable housing, without any information about floor area or number of rooms. Where a developer is required to provide a specified number of units as affordable homes s/he has an obvious financial incentive to provide small units for that purpose. For recent housing schemes of all types in Wandsworth a majority of units have been one and two-bedroom flats (4.177). Policy DMH3 says that planning permission will be granted for proposals for affordable housing developments which demonstrate that a mix of dwelling sizes has been provided taking account of the borough-level indicative proportions specified in table 3.1. It is not clear, however, whether this policy applies to affordable housing as one element in a larger development. We think it should apply there as well.
The indicative proportions in table 3.1 are that dwellings with one or two bedrooms should make up 60% of dwellings in social or affordable rent schemes and 90% in intermediate schemes. We accept there is an argument for providing a certain proportion of smaller affordable housing units to encourage existing tenants whose homes are now too large for them to downsize, thus making those homes available for larger families (4.177). Does the Council have any statistics to show what proportion of tenants moving into small affordable units are downsizing from larger affordable units?
The Plan increases the proportion of affordable housing in new developments which will be in the ‘intermediate’ category from 30% to 40%, with a corresponding reduction in the proportion which will be social/affordable rented housing. While this mirrors a change in policy in the London Plan we do not consider this reduced proportion of social/affordable rented housing reflects the needs either of the community or of the economy in Wandsworth. In the Plan’s overall provision for affordable housing there is an even stronger emphasis on intermediate housing than in new developments; it will represent 48% of the affordable housing the Council plans to deliver in the 15 years from 2015/16 to 2029/30 (paragraph c) of policy !S5). In the first five years intermediate housing will be even more predominant at 62% (table 4.7); the proportion is projected to decline to 40% in later periods.
Most affordable housing provided by Wandsworth to date has been for shared ownership (4.189). However, rising house prices have increased the level of household income necessary to enter some shared equity schemes and the amount of cross-subsidy required to deliver the Councils affordability requirements. Over two-thirds of households on the Council’s Homeownership Register had a household income of £35,000 or less in February 2013 and a similar proportion had savings of less than £10,000. It has become increasingly difficult to meet the Council's previous requirement that two-thirds of housing should be available to households with gross household incomes of £38,000 or less.
We welcome the Council’s attempts to find innovative methods of providing intermediate housing with the aim of maximising the amount of affordable housing being obtained (4.190).
Given the extent to which affordable housing is being provided by agreements with developers, it is of concern that some developers are claiming that the amount of affordable housing previously agreed means that their schemes is no longer viable; and that the Government is making changes to facilitate such claims. Given the increases in house prices in London in recent years simple economics would suggest that schemes in the pipeline will have become more profitable and, if anything, there would therefore be greater scope for affordable housing to be provided as part of larger developments. Any claims of non-viability, therefore, should be scrutinised very carefully.