Thursday, 10 January 2013

Gatewen opens the floodgates on affordable housing

The decision by Wrecsam Council's planning committee to allow Morston Assets to reduce the number of affordable homes on the huge Gatewen Village site to just 5% opens the floodgates for every developer to try it on.
 The developer argued that the site was no longer viable because of the housing slump unless it was allowed to reduce the number of affordable housing from 20% (already below the normal 25% allocation) to 5%.
 A confidential viability study paid for the developer apparently backed up the proposal.
 The site has permission for 236 homes, so the number of affordable houses - available at 85% of market value - drops from 46 to just 11.
 Councillors voted without seeing the viability study and shockingly didn't ask to see it. Therefore on what basis could they assess whether the site was viable or not.
 If we assume the affordable houses were 2-bedroom houses or flats costing £100,000 on the open market, then the "affordability" element is just £15,000 per home. That £15,000 would normally be met by a housing grant but that has been cut by the Welsh Government.
 This element of the site amounts to under £500,000. Is that really the difference between the site - where five-bedroom houses are being sold for £250,000 - being profitable and unprofitable?
 Regardless of the hidden economics of this particular site, what the unquestioning councillors on the planning committee have done is open the floodgates for every developer to reduce their affordable houses quota.

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