Developers and affordable housing, can Brent learn from Islington?

The issue of regeneration and development in London caused much controversey in London last year as property prices and rents soared and much new development was bought up by overseas investors.  In Brent the Willesden Green Library development was a prime example as the development was sold on twice and the price of a one bedroomed flat rose to £450,000. In Barnet West Hendon social housing tenants are being moved out to make for high rise luxury developments on the bank of the Welsh Harp.

In a widely quoted Guardian article LINK Oliver Wainwright wrote:

Across the country – and especially in superheated London, where stratospheric land values beget accordingly bloated developments – authorities are allowing planning policies to be continually flouted, affordable housing quotas to be waived, height limits breached, the interests of residents endlessly trampled. Places are becoming ever meaner and more divided, as public assets are relentlessly sold off, entire council estates flattened to make room for silos of luxury safe-deposit boxes in the sky. We are replacing homes with investment units, to be sold overseas and never inhabited, substituting community for vacancy. The more we build, the more our cities are emptied, producing dead swathes of zombie town where the lights might never even be switched on.

Islington Council moved to fine 'buy-to-leave' investors up to £60,000 for leaving house units empty LINK and decided LINK to clamp down on developers making 'artifically pessemistic' assessments of the viability of affordable housing schemes:

The council last week launched a consultation on supplementary planning guidance that would require all viability studies to be supported by ‘robust evidence’. This will include details of arrangements between landowners and developers, and information provided by the developer to banks.

Viability studies are commissioned by developers to assess how much affordable housing a scheme could provide while remaining financially viable.

Islington said it has received a ‘significant number’ of viability studies that do not provide underlying methodology and modelling.

These studies are ‘unsupported by robust evidence’ and create ‘an artificially pessimistic outcome’, leading to what the council calls ‘super-profit’.

The council proposes that viability studies that lack ‘all relevant information required’ to have a reduced weight in terms of decision making.

Speaking at a Communities and Local Government committee meeting on 10 September, James Murray, executive member for housing and development at Islington, said: ‘The modelling is often not shared with the council, so we have to try to extrapolate from that. We need national action.

London Councils, the body that represents local authorities in London, said it is ‘aware of concerns from a number of councils’ about viability studies and transparency.

Richard Lemon, associate director of planning at property consultancy CBRE, said: ‘One can be as transparent as you like, but you need skills in-house to be able to properly scrutinise viability.’

In October Isling Council took steps to ensure that there was hoising at social rents at the soon to be developed Clerkenwell Firer Station which had been closed by Boris Johnson. LINK

Another issue is around Section 106 and the Community Infrastructure Levy, 'planning gain' monies paid by developers to Councils to provide infrastructure for projects.  The regulations for CIL in Brent can be found HERE and there is a process by which developers can claim exceptional relief.

In 2013 Quintain, developer of the area around Wembey Stadium, last year challenged Brent Council over Section 106 obligations LINK

WEM36 and WEM38 set out requirements that major new development provides new open space and food growing facilities. Such exceptional provision, which also includes the provision of play space in WEM40 and wildlife enhancements inWEM41, will have an impact on viability and thus will have an impact on Section 106 obligations, after CIL.

I said in that article report that Quintain seemed to want to build dense and build high. It appears from the recent application to build high rise flats on land behind the Civic Centre  LINK that Quintain has overcome Brent Council's earlier reluctance to approve high density, high rise housing units in the area due to their concerns about open space, loss of light and concealing views of the stadium.

Open space, play space and food growing areas do not seem to be priorities at present.

Blocks up to 20 storeys high are planned for the Quintain site

Last year's Localis Report on local authorities and development was reported by Public Finance  said that they were now acting more like developers themselves:

Councils across England will redevelop £13.5bn worth of land and assets over the next five years as part of local plans to turn underused land into a source of revenue, an examination by Localis has found.

A survey of local authorities by the think-tank found many were reacting to ongoing austerity by acting more like property developers.

Instead of deciding to sell buildings and land for one-off capital receipts, authorities were looking to redevelop assets to derive revenue income from them that they can use to help support public services.

To help further develop this process, today’s Public Land, Public Good report called for councils to come together to establish a ‘hit squad’ of highly experienced council officers who could provide advice on maximising returns on council assets. The report suggested that if they could deliver a 5% increase on the £13.5bn assets, this would produce almost £700m of extra revenue.

Certainly the Corporate Risk Register being considered by the Audit Committee this week makes no bones about Brent Council's role. Addressing the risk of lack of external investment in the borough the risk reduction strategy is:

De-risking  by assisting with planning permissions etc. on behalf of developers; Maintaining dialogue with investors / developers. Reviewing other sources of capital finance.

This reflects what Andy Donald, head of Brent Regeneration and Growth, said at a MIPIM Round Table discussion back in April 2010:

What I’ve learned is, when times are good, the big scale projects work well, but when times are not so good, it is best to try and present projects to politicians in a more chunked-up way, where they can generate momentum. Once things have started and momentum builds up it is really difficult to stop it, for funders to walk away. So as local authorities we try and take more responsibility to get things started, which might mean acting as a developer, to take things through planning ourselves, which builds confidence

The Regeneration and Growth department covers both development and planning and I have discussed before whether there is a conflict in these two roles. Planning Officers write reports for the statutorily independent  planning committee on developments that their department have helped instigate.  The experience in Brent seems to be that this approach of smoothing the way for developers leaves out the local community. The default position is in favour of development and a close relationshiop with developers. The public become an irritant when the public oppose developments which change the nature of the neighbourhood or seem aimed at overseas investors rather than local people in need of affordable housing.  The Willesden Green Library development, advertised overseas as having the unique selling point of no affordable or key worker housing on site is a case in point.

That irritation is evident in another section of the Regeneration and Growth section of the Corporate Risk Register when this risk is recorded.

Political pressure from local community/ groups affect abiility to deliver the  new Willesden Green Cultural Centre to budget and time.

That pressure, I presume, is about the new Cultural Centre fulfilling the promises made as a result of consultation and the 'gain' embodied in it for the local community at the cost of a development that has no affordable housing and removes a public open space. 

I think the question that should be asked is whether being 'hand in glove' with developers is preventing  Brent Council from adopting the much more robust approach we see in Labour Islington? Certainly Scrutiny Committee needs to examine the 'deal' that it is getting from Brent's approach as far as 'planning gain' and returns on council assets are concerned.

Dave Hill has written more fully on  Islington's approach HERE