Developers building in Bedford borough may have their viability appraisals reassessed to retrospectively provide funding for the affordable housing they said they couldn’t afford, if the new Local Plan is adopted.
A report presented to the Housing Committee on Wednesday, 7 September said cost implications from planning requirements could make a development financially unviable.
In these circumstances, developers can submit “viability appraisals” which
may justify a reduction in the affordable housing provision.
Bedford mayor, Dave Hodgson said: “My understanding is that in a number of developments, the developer will go for a viability study where they say it’s not affordable to do all that [we ask for].
“Therefore we often lose out on one or two of the [requirements] or even more, and often it is the case that it’s affordable housing,” he said.
Tracey Barrett, team leader, housing policy, development & viability at the council, said viability appraisals are “rigorously” assessed by an independent consultant to make sure they are valid and reasonable.
“The developer might be starting from a position of ‘we can only provide 10 per cent affordable housing’ and often when the assessment comes back it ends up being more than that, ” she said.
Mayor Hodgson said: “My real problem is when a planning inspector or the government feels that part of the viability is a 20 per cent profit.
“I understand that shareholders need to be paid, but it seems to be a large percentage profit compared to an Asda, or a Sainsbury’s, or many other companies we have in the borough,” he said.
Jon Shortland, the council’s chief officer for highways, transport, planning and infrastructure development, mentioned that the council’s Local Plan 2040, which is being developed at the moment, may be able to help with these viability appraisals.
“Assuming that [Local Plan] goes through its hearings next year and becomes adopted, it includes a policy whereby we can retrospectively go back and look at the viability agreements that have been made.
“If the developers have somehow made more than a 20 per cent profit we can then claw back the difference and use it to provide more affordable housing,” he said.
By John Guinn
Local Democracy Reporter
