Here's how developers wriggle out of building enough affordable housing

Another unaffordable London housing development. Image: Getty.

Labour’s Nicky Gavron on the dark art of viability assessments.

Are developers gaming the system to avoid making their fair contribution to affordable housing?

Just as more affordable homes are needed, fewer and fewer are being provided by developers. In 2007-08, 1,560 homes were funded entirely through planning obligations. Since then the totals have significantly declined, and last year, only 300 new affordable homes were funded entirely without grant.

And this is all the more disheartening when you consider that public subsidy for affordable housing has fallen since 2010, making private sector contributions through planning obligations even more important.


Some – including the mayor of London – have expressed concerns that developers are using the “dark arts” to calculate how much money they can contribute to pay for affordable housing, calculations known as “viability assessments”.

I have spoken out against the way some developers appear to be rigging viability assessments to inflate their costs and underestimate the value of the scheme on paper, and then claim there is no money left over for affordable housing. This could be done in the full knowledge that the actual costs and the actual values will be different.

At a meeting last week of the London Assembly Planning Committee, which I chair, we gathered some real insight into the issues from our guests. They cited various factors holding back councils in negotiating for more affordable homes:

The National Planning Policy Framework

We heard time and time again at the meeting that the new system of planning, introduced in 2012, emphasised that the level of “obligations and policy burdens” placed on a development should not threaten its viability. The policy framework and the guidance, taken with other government actions such as giving developers the right to force renegotiation, indicates the policy could be weighted in favour of developers.

But as we heard from guests – the interpretation of this is confused, especially alongside other guidance. The process is saturated with uncertainty.

The Mayor’s 20 per cent profit benchmark.

The “Three Dragons” model, provided by the mayor for calculating viability, sets a default profit level of 20 per cent on new developments. However, is it appropriate for the mayor to have such a benchmark in this widely used model? And more importantly, what is an “appropriate” profit benchmark for developments anyway?

Land issues

The price of land is a key issue affecting viability. The flexibility with which affordable housing requirements are applied may have contributed to skyrocketing land values: John Wacher of the London Borough of Islington told us that “almost by definition, the developer that gains the site is the one that has assumed the lowest level of policy compliance with the development plan”. From a developers’ perspective, it is claimed that the easy sites have already been snapped up and the land currently being developed is now much more expensive to build out.

There are also issues about the methodology used to value land. Most developers opt to use “market value” – which generally means that a developer will make the most attractive offer for the land, often based on the expectation of luxury housing with little or no affordable homes. A more appropriate approach might be “existing land use value plus”, which is based on the current use of the land in addition to an increase in value, to provide an incentive to sell the land.

Developing the right skills with limited budgets.

London boroughs need highly skilled staff to be able to negotiate effectively with developers. Councils are often outnumbered and out-skilled by developers who use their deep pockets to hire experts. 

John Wacher highlighted excellent work boroughs are doing together to improve their skills, but with pressures on council budgets, the recruitment and training environment is challenging.


But how do we solve these problems? Guests and community groups who have developed real expertise in this area presented us with some ideas – from making viability agreements more transparent, lowering the profit benchmark, and providing better information sharing and training of staff.

We also heard that the mayor’s own developments on public land holdings offer a real opportunity to show leadership.

The Committee will be exploring whether these ideas will work over the next weeks – but if you have any ideas of your own, please do email us on planningcommittee@london.gov.uk. We would especially like your ideas on how to develop a more holistic approach to viability, with a wider context of wellbeing and a more equitable approach to sharing value.

 Nicky Gavron AM is chair of the London Assembly Planning Committee.

 
 
 
 

In many ways, smart cities are really very dumb

Rio de Janeiro’s control centre. Image: Getty.

It’s not news that anything and everything is increasingly being prefaced with “smart”: phones, watches, homes, fridges, and even water (yes, smartwater exists). And it’s not unintentional either. 

Marketeers know that we, the public, are often stupid enough to believe that thanks to their technology, life is better now than it was way back in, say, the primitive Nineties. Imagine having to, like a Neanderthal, remember how to spell words without an autocorrecting algorithm, or open the fridge door to check if you’d run out of milk, or, worse still, interact with actual people.

So it’s hardly surprising that we’re now also witnessing the rise of the so-called “smart cities”; a concept which presupposes that cities that are not technologically  “smart” are dumb, which, as anyone interested in the millennia-old history of cities — from the crypto-currency grain storage algorythms of ancient Mesopotamia to the complex waste infrastructure of ancient Rome, to London’s public transport infrastructure — will know, is not true.

Deployed in these smart cities are cameras and other networked information-gathering devices, load cells and other “sensing devices” detecting passing pedestrians and vehicles, audio surveillance devices listening for gunshots – and even vending machines equipped with biometric sensors to recognise your face. This is not to mention beacon technology — tiny anonymous looking black boxes hidden in trees and on lampposts — which transmits advertising, offers and other information directly to smart phones in the vicinity. 

If that doesn’t seem sinister enough, take, for example, Rio de Janeiro, where, in 2014, the International Business Machines Corporation designed a mammoth “control centre” that integrates data from 30 agencies for the city’s police. 

Described by the Guardian as having “the functionality of a Bond villian’s techno lair”, the then local mayor, Eduardo Paes, claimed the centre was making the city safer while using technology to deploy its “special” police unit to carry out the state’s “pacification programme”. Launched in 2008, the programme, which aims to push out drug gangs from Rio’s favelas, has been criticised by Amnesty International: “in January and February 2017 in Rio de Janeiro alone, at least 182 people were killed during police operations in marginalized neighbourhoods (favelas) – a 78 per cent increase in comparison to the same period in 2016”.

Sinister or not, as smart cities grow, they create new problems. For example, as urbanist Adam Greenfield writes in Radical Technologies: The Design of Everyday Life, neither the algorithms nor their designers are subject to the ordinary processes of democratic accountability – a problem that international academics are currently attempting to tackle.  


“We need to understand that the authorship of an algorithm intended to guide the distribution of civic resources is itself an inherently political act,” writes Greenfield. “The architects of the smart city have utterly failed to reckon with the reality of power.”

The Real Smart Cities project, founded by Dr Gerald Moore, Dr Noel Fitzpatrick and Professor Bernard Stiegler, is investigating the ways in which so-called “smart city” technologies present a threat to democracy and citizenship, and how digital tools might be used create new forms of community participation.

Fitzpatrick is critical of current discourses around smart cities, which he says “tend to be technical fixes, where technology is presented as a means to solve the problems of the city.” The philosophy underpinning the project is “that technologies function as forms of pharmacology”, he adds, meaning that they can be both positive and negative. “The addictive negative effects are being felt at an individual and collective level.” 

An example of this lies in the way that many of these smart cities replace human workers with disembodied voices — “Alexa we need more toilet roll” — like those used to control the Amazon Echo listening device — the high priestess of smart home. These disembodied voices travel at the speed of light to cavernous, so-called “fulfilment centres”, where an invisible workforce are called into action by our buy-it-now, one-click impulse commands; moving robotically down seemingly endless aisles of algorithmically organised products arranged according to purchase preferences the like of which we never knew we had — someone who buys a crime novel might be more likely to go on and buy cat food, a wireless router, a teapot and a screwdriver. 

Oh to be the archeologists of the future who while digging through mounds of silicon dust happen upon these vast repositories of disembodies voices. That the digital is inherently material and the binary of virtual/real does not hold — there is no cyberspace, just space. Space that is being increasingly populated by technologies that want to watch you, listen to you, get to know you and sense your presence.

One project looking to solve some of the problems of smart cities is that of the development of a “clinic of contribution” within Pleine Commune in greater Paris (an area where one in three live in poverty).This attempts to deal with issues of communication between parents and children where the widespread use of smartphones as parental devices from infancy is having effects on the attention of young children and on the communicative abilities between parents and children. 

This in turn forms part of a wider project in the area that Stiegler describes as “installing a true urban intelligence”, which moves beyond what he sees as the bankrupt idea of smart cities. The aim is to create a “contributory income” in the area that responds to the loss of salaried jobs due to automation and the growth and spread of digitisation. 

The idea being that an income could be paid to residents, on the condition that they perform a service to society. This, if you are unemployed, living in poverty and urban deprivation, sounds like quite a simple and smart idea to try and solve some of the dumb effcts of the digital technology that's implemented in cities under the ideology of being “smart”.