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Developer's viability claims dismissed in affordable housing case

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A London borough has won a case against a developer which refused to meet the council’s demand for affordable housing.

Islington LBC’s policy requires developers to provide the “maximum reasonable” amount of affordable housing on a site, with 50% affordable housing being the starting point.

First Base, which applied to build 96 homes on a former Territorial Army Centre in Parkhurst Road, initially sought to avoid providing any affordable housing when it first submitted an application in 2013.

The council refused planning permission and the developer appealed before it increased its offer of affordable housing to 10%.

The low levels of affordable housing provided on the scheme was being justified by the developer based on factors such as the purchase price paid for the site and land transactions of other schemes, the council said.

The Planning Inspectorate has now dismissed the developer’s appeal. The decision, made on 19 June, centred around how the viability of the development was assessed and, in particular, how the price of land should be determined.

The decision confirmed landowners are “required to have regard to the requirements of planning policy and obligations in their expectations of land value”.

Diarmaid Ward (Lab), Islington’s executive member for housing and development, said: “The decision from the Planning Inspectorate sends a strong signal that developers need to take into account planning policy requirements when bidding for land, and that they cannot overbid and seek to recover this money later through lower levels of affordable housing.

“This decision will ensure the maximum reasonable amount of affordable housing is provided, and strongly discourage developers and landowners from manipulating the development viability process to deliver fewer affordable homes.”

A spokesman at First Base said: “We are disappointed that four years after acquiring the site from the Ministry of Defence at market value, we are still not able to deliver much-needed homes that Londoners need. Our track record in Islington speaks for itself - all our schemes deliver significant amount of affordable homes and jobs that regenerate our city and help build thriving mixed communities.”

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