Revealed: Dozens of cash deals to avoid building affordable housing

Calls to ditch 'payment in lieu' system

Thursday, 30th July 2020 — By Tom Foot

Belsize fire station IMG_9321

Belsize Fire Station

DOZENS of “sweetheart deals” have been struck by the council with developers looking to pay their way out of including affordable housing on their sites, a New Journal investigation has revealed.

Just weeks after councillors appeared in triumphant mood after demanding that the company converting Belsize Fire Station into a luxury homes complex stuck to a plan to include two cheaper flats, the figures suggest that Camden does not always play hardball.

Instead, the council figures show the Town Hall had since 2013 agreed to around 170 cash contributions – known as payments in lieu (PiL) – in exchange for removing or reducing the number of affordable homes on sites.

Earlier this month, planning councillors ignored the advice of their own officers to refuse Vulcan Properties Ltd’s offer of a PiL as a deal to remove the requirement to provide two affordable homes at the fire station in Lancaster Grove.

The site is politically sensitive because of the controversial decision to shut down the station in the first place, taken by Prime Minister Boris Johnson during his time as London mayor.

His role in the sale was mentioned at Camden’s planning committee meeting by Labour councillors. These factors are not allowed to influence planning decisions, however, and councillors said they were refusing Vulcan’s offer on the grounds that they should not be able to abandon its previous pledge.

Vulcan had argued that it had proved impossible to find a social housing group willing to take on the two flats. Other developers have had better fortune with the PiL system, which sees money going into a general pot for housing.

This means it may not be used in the wards affected by development and it has been suggested reduces the chances of affordable homes being built in more expensive areas, and creating more mixed communities. They are only supposed to be used as a last resort when low rent homes cannot be practically built.

Labour councillor Adam Harrison talks about Boris Johnson in planning meeting on Belsize Fire Station

Large “donations” were agreed during private housing overhauls across Camden including at the former hostel in Parker Street in Holborn and the New End nursing accommodation in Hampstead, but PiLs were also used in smaller neighbourhood projects dotted all over the borough.

“Thanks to the New Journal for exposing this scandal,” said Eileen Short, chair of the Defend Council Housing campaign group. “The council are bartering away homes and facilities Camden needs, and letting developers get away with robbery. Developers and land-owners are not going broke. They are getting rich at Camden’s expense.”

She added: “These deals need to be scrapped, and all the financial details of such deals must be publicised, so we can all judge what’s really going on.”

The PiL list, obtained by the New Journal under the Freedom of Information Act includes an offer accepted for a development in the same road as the fire station in Belsize Park. There was heavy use of PiLs in 2015, with more than £50million of agree­ments in that year alone.

The figures show, however, that there are dozens of deals where the council has not recorded receiving the negotiated payment, including more than £7million due for the housing development at Bartrams Convent Hostel in Belsize Park and more than £10million for the King’s College block in Kidderpore Avenue, in Hampstead.

The council said around half of the outstanding payments listed in the response to our enquiries were for developments that either had not been built yet, or were for projects that had collapsed, or been superseded by alternative planning agreements.

Other examples of PiLs include:

  •  £2.85million at the Highgate Newtown Community Centre;
  • £968,000 at the “Marine Ices” building in Chalk Farm;
  •  £1million for the Eastman Dental Hospital;
  •  £5million for the Lawn Road development in Belsize Park
  • £956,000 for the former NHS headquarters Stephenson House.

Conservative leader Cllr Oliver Cooper said “Camden’s sweetheart deals need to be binned,” adding: “Camden has struck a staggering number of sweetheart deals to get developers out of paying their share of affordable housing. “Camden is far more generous to developers than it needs to be, which means these payments are never enough to build replacement homes nearby.”

The New Journal’s investigation also asked for details of any review of the PiL system.

The response said: “A consultancy study was commissioned in 2019 to recommend new payment-in-lieu rates. A formal decision to consult on draft Camden Planning Guidance (CPG) ‘Housing CPG’ incorporating the recommended rates has been delayed by the pandemic, but is now scheduled on July 31.”

Labour councillor Danny Beales, the council’s regeneration chief

Camden’s regeneration chief Councillor Danny Beales said: “We have some of the toughest policies in the country on developers around the need to provide afford­able housing. There is a real need for affordable housing in Camden and we will always push for this as a priority.”

He added: ““Unfortunately the national planning system allows developers to present viability concerns and information when considering what contributions they should make. “Where developers can demonstrate they are unable to provide affordable housing on site, we don’t just let them off the hook. We require payments in lieu to be made so we can fund new affordable housing directly.”


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