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Criticism of report calling for less affordable homes

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A Government-commissioned report by 3i Group Plc (III) chairman Adrian Montague has advised that councils should drop agreements on the number of affordable homes developers are required to build, in order to kick-start growth and get more houses built.
Housing minister Grant Shapps supported the proposals, however West Berkshire Council’s shadow housing spokesman Tony Vickers (Lib Dem, Northcroft) said the district’s problem of a chronic lack of affordable homes would deepen if developers weren’t forced to build them.
Shelving affordable home requirements would make projects more affordable and likely to convince cautious banks to lend money according to the report, however Mr Vickers said the idea this would re-ignite house-building was naive.
“To give in to developers who make foolish deals would be "moral hazard" comparable to bailing out the big banks: it will only encourage them to make such deals more foolishly next time. Let them take the losses as well as the profits,” he said.
“Developers should have factored in the legal requirement to provide for all S106 contributions when they acquired sites for housing.
“The chronic shortage of new homes will only end when land with planning permission, or zoned for housing (but not in construction), is treated like business property and business rates are based on site values alone, which has been Liberal Democrat policy for some time. Then we'll see such land come on the market and get built on soon enough.
“The planning system is not the problem. Shortage of finance is the real problem. Demand for homes is not the same as need and is a function of availability of finance, not land.”
In 2010 the council came under fire by homelessness charity Shelter for providing just 37 per cent of the necessary affordable homes it needed in the district, 270, rather than the recommended 729.
An attempt to resolve the shortage of affordable homes was drawn up in the council’s recently adopted housing plan for the next 14 years.
However, before it was passed the original document was altered to state that the council’s priority and starting expectation would be for affordable housing to be provided in line with Government guidance, which could change if Mr Motague’s report is adopted.

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