Here’s how developers are getting out of building affordable homes

Yeah, you will never live here. Image: Getty.

Our housing crisis has been thrust into the spotlight in the worst way possible with the Grenfell Tower disaster. Hundreds have lost loved ones and many are without a home. While Shelter has been calling for those affected to be placed in good quality accommodation nearby, and hopes officials make good on their promise to do so, we know many local authorities simply don't have enough affordable homes.

The main reason for this desperate crisis? A generations-long failure of our housebuilding system to build enough homes that people on ordinary incomes can afford.

Over many years, house prices have continued to soar, while wages have stagnated. The average house price is now 7.6 times the average salary – it was about half that 20 years ago. 

Meanwhile, renters right across the country are having to shell out massive amounts of money every month to cover their rent, all for unstable, short-term contracts. And at the sharp end, homelessness is on the rise, with a shocking 255,000 people finding themselves without a home at the last count.

Today we rely on private housebuilders to build most of our homes. But as profit-driven organisations they are, perhaps understandably, not very good at building affordable homes.

A favoured, and perfectly legitimate way of building fewer affordable homes is through something called a “viability assessment”. When a housing developer gets planning permission they are normally required by the council to make a number of the homes they build officially "affordable". This number varies across the country but is usually between 30 to 50 per cent and developers will be aware of the requirement before they begin drawing up plans.

But the less affordable housing a developer builds, the more profit they could make – so the developer deploys the viability assessment. This allows them to go back to the council and say that the amount of affordable housing they originally agreed is no longer possible.


They’ll often blame changes in their costs or lower than anticipated house prices (as we’ve seen recently with the Battersea Power Station development), meaning they won’t make sufficient profits to build the number of affordable homes originally planned. Their case is strengthened by the fact the law was changed in 2012 to state that the developer must make “competitive returns” (in practice, 20 per cent profit) on the development.

The massive problem here is that we can’t scrutinise these really important decisions because – guess what? – the viability assessment is private. So affordable homes are being denied to people who really need them right across the country in this way, but local communities, journalists, campaigners and charities like Shelter are not being allowed to question it. And of course, it’s those people desperate for an affordable place to live who lose out.

It can be argued that developers are simply following the instinct of most private companies in being competitive and taking the opportunity to make more money. The real issue is that they are allowed to do it so easily in the first place, and keep it a secret.

The viability assessment should only be used when circumstances have made the council’s requirements literally impossible. And in such a case, it should be published so the public can scrutinise it. After all, in such an eventuality – what does anyone have to hide, right?

This issue is among many being discussed in the recent housing special from Channel 4’s Dispatches which looks at the challenges we face in ending the housing crisis.

We need to get tougher and plug this leak of affordable homes, but this is just one symptom of a housing system that is letting the whole nation down.

There are ways to solve this, based around getting land at a cheaper price. Until the government takes bold action to commit to a whole new way of building homes like this, it will be ordinary families who continue to carry the burden of our broken system.

Steve Akehurst is head of public affairs and campaigns at Shelter. Channel 4 Dispatches was broadcast on 10 July, at 8pm. This article previously appeared on our sister site, the Staggers.

 
 
 
 

Mayor Marvin Rees' hope for Bristol: A more equitable city that can 'live with difference'

“I call on everyone to challenge racism and inequality in every corner of our city," Bristol Mayor Marvin Rees says. (Matt Cardy/Getty Images)

When the statue of 18th century slave trader Edward Colston was torn from its plinth and dumped in Bristol’s harbour during the city’s Black Lives Matter protests on 7 June, mayor Marvin Rees was thrust into the spotlight. 

Refraining from direct support of the statue’s removal, the city’s first black mayor shared a different perspective on what UK home secretary Priti Patel called “sheer vandalism”:

“It is important to listen to those who found the statue to represent an affront to humanity,” he said in a statement at the time. “I call on everyone to challenge racism and inequality in every corner of our city and wherever we see it.”

48 year-old Rees, who grew up in the city, has since expanded on his approach to the issue in an interview with CityMetric, saying “wherever you stand on that spectrum, the city needs to be a home for all of those people with all of those perspectives, even if you disagree with them.”

“We need to have the ability to live with difference, and that is the ethnic difference, racial difference, gender difference, but also different political perspectives,” he added. “I have been making that point repeatedly – and I hope that by making it, it becomes real.” 


What making that point means, in practice, for Rees is perhaps best illustrated by his approach to city governance.

Weeks after the toppling of Colston’s statue, a new installation was erected at the same spot featuring Jen Reid, a protester of Black Lives Matter. However, the installation was removed, as “it was the work and decision of a London-based artist, and it was not requested and permission was not given for it to be installed”, Rees said in a statement.

Bristol may appear a prosperous city, logging the highest employment rate among the UK’s “core cities” in the second quarter of 2019. But it is still home to many areas that suffer from social and economic problems: over 70,000 people, about 15 percent of Bristol’s population, live in what are considered the top 10 percent most disadvantaged areas in England. 

In an attempt to combat this inequality, Rees has been involved in a number of projects. He has established Bristol Works, where more than 3,000 young people from economically disadvantaged backgrounds are given work experience opportunities. And is now setting up a commission on social mobility. “Launching a Bristol commission on social mobility is not only about social justice; it [should not be] possible for a modern city to leave millions of pounds worth of talent on the shelf, just because the talent was born into poverty,” he says.

The mayor is also a strong supporter of the UN’s Sustainable Development Goals (SDGs), explaining that SDGs offer a way to talk about sustainability within a framework of many issues, ranging from climate change and biodiversity to women’s issues, domestic violence, poverty and hunger.

“What we want to achieve as a city cannot be done as a city working alone,” he insists. “We don’t want to benefit only people inside Bristol, we want to benefit the planet, and the SDGs offer a framework for a global conversation,” suggesting that a vehicle should be launched that allows cities to work together, ideally with organisations such as the UN, the World Bank and the International Monetary Fund involved. 

Greater collaboration between cities would be “beneficial in terms of economies of scale,” he argues, “as cities could get more competitive prices when buying materials for building houses or ordering buses, rather than each city acquiring a few of them at a higher price.”

In an attempt to focus on the long term, Rees launched One City Plan in January 2019, setting out a number of goals for Bristol to achieve by 2050.

Investing in green infrastructure to meet 2030 carbon emission targets spelled out in the SDGs is a key area here, with the mayor noting that transport, mass transit and energy are important sectors looking for further investment and government funding: “The sooner we meet our targets, the sooner we will benefit from them, and invest in sectors that will provide people with jobs.”

Jobs, especially following the outbreak of Covid-19, are of paramount importance to Rees. Bristol’s council wants to ensure that any government money given to the city will be quickly passed on to businesses to help prevent redundancies, he says, though given that mass job losses seem inevitable, reskilling options are also being looked into, such as through a zero-carbon smart energy project called City Leap.

Another important area for investment in Bristol is affordable housing, with 9,000 homes already built under Rees’s term of office. “People could build a base for life with affordable housing, [and this would mean] their mental health would be better because they have a safe place,” he explains. “Children in families that have a home that is affordable are more likely to able to eat and to heat, [and they are more likely to enjoy a] better education.”

Taken in the round, Rees’s agenda for Bristol is its own blueprint for shaping history. The Colston statue now lies in safe storage, with a local museum likely to play host to the controversial monument. But the Black Lives Matters protestors were fighting for a fairer, more equal future, and it is here where Rees is determined to deliver.

Sofia Karadima is a senior editor at NS Media Group.