Monday, 5 September 2011

A dangerous precedent

Tonight's planning committee included an item on the agenda from the developers of housing on the Pentre Bach estate on the outskirts of Wrecsam that would have set a dangerous precedent.
Redrow and Miller Homes wanted to waive the existing agreement for affordable housing on their respective parts of the estate and, instead, make a reduced payment for affordable housing elsewhere in the borough.
In the case of Redrow, the eight homes (seven flats and one house) had been available for part-buy at 30% below market value. Despite this, only one had been sold and Redrow approached the council to sell them on the open market. As compensation for breaking the affordable housing condition, it offered the 30% market value differential - about £200,000 for the eight homes.
Used elsewhere, this would have allowed the council to build or buy two or three houses, so clearly it was a very bad deal in terms of improving the chances of local people finding affordable housing.
But it also demonstrates that an inflexible affordable housing scheme doesn't help the situation. We were not told whether Redrow had offered the homes to housing associations for rent and how intensively they had marketed them at the below market value. The main problem with the latter option is that mortgagers currently want 25% deposits, so that first-time buyers would need £16,000 or more to put down on a one-bedroom flat. For anyone on an average wage, finding that kind of money without parental help or winning the lottery is pretty much impossible.
The developers did not consider reducing prices - as is happening with open market housing - and to have gone along with the plan would have set a dangerous precedent for all other housing developments. We would have ended up with our affordable housing targets in tatters.
Fortunately, planning chair Mike Morris coupled with objections from Plaid councillors Marc Jones and Carrie Harper deferred any decisions to allow for more information on what would have been a fundamental change in our housing strategy.


Anonymous said...

Didn't the council use to be the lender of last resort to people who had trouble getting a mortgage? I know my parents had a motgage from the council many years ago. Must be as good a return as anywhere else they put their (our) money.

Anonymous said...

I think this is a good idea. If affordable housing is not needed in a particular development it could be for a number of reasons such as poor infrastructure.

The Pentre Bach development is an example of a development with poor public transport and lack of amenities. For example there is a lack of community buildings and local services for groups such as the elderly and families.

If these do not exist maybe the developer should make a contribution to them in lieu of affordable housing or as suggested redirect a payment to another area where there is high demand for affordable housing.