Revealed: The affordable homes deficit in Norwich as councils “trapped in battle” with wealthy developers

Developers behind the Deal Ground site negotiated almost 200 affordable homes out of the plans.

Developers behind the Deal Ground site negotiated almost 200 affordable homes out of the plans. - Credit: Norwich City Council

Secretive assessments which are 'undermining the planning system' by allowing developers to avoid building cheaper homes could be made public as new figures reveal Greater Norwich has missed out on almost 1,000 affordable homes in four years.

An artist's impression of how the St Mary's Works site will look. Pic: Our Place.

An artist's impression of how the St Mary's Works site will look. Pic: Our Place. - Credit: Our Place

Since 2012 developers have commissioned viability assessments to argue building affordable homes would eat into their profit.

But Norwich City Council has ambitions to force developers to publish these assessments, which are usually kept secret under commercial confidentiality.

Since 2013 5,190 new homes have been built across Broadland, Norwich and South Norfolk.

According to the Greater Norwich Joint Core Strategy, a third of all homes in developments of 11 homes of more should be affordable or social rent - let at 80pc of market rates or below.


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But in the same period just 810 affordable rent homes have been delivered of the 1,712 which should have been to meet the policy.

Areas where they have fallen short include almost 200 homes at the Deal Ground site, where work is yet to begin six years after consent was granted.

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And last week, a further 46 affordable homes were negotiated away in the development of the former St Mary's Works shoe factory.

'The developers are doing nothing illegal, just what they can get away with,' said Dr Bob Colenutt, research fellow at the school of built environment at Oxford Brookes. 'Because developers are extremely powerful and well-resourced they are able to put a lot of resources into arguing reduced levels of affordable housing.'

In response, planning managers at Norwich City Council (NCC) are hoping to adopt an 'open book approach' to viability assessments, which are usually commercially confidential.

Graham Nelson, head of planning at NCC, said in correspondence seen by this newspaper he intends to review the Affordable Housing Supplementary Planning Document (SPD).

'I am minded to propose a significant variation to our approach to dealing with viability issues,' he said, ' and move to a case whereby all information submitted by the applicant under an open book approach to viability is treated as being in the public domain.'.

He added: 'I would expect to progressively work through all the cases where historically we have dealt with viability information in confidence seeking to check if this information remains sensitive.'

Developers Lunar Office SARL argued the provision of 28 affordable homes at Grosvenor House would be

Developers Lunar Office SARL argued the provision of 28 affordable homes at Grosvenor House would be unviable. The development has since been taken over by Regency Residential. Picture Levitate - Credit: Archant

The SPD review has been delayed as the Department for Communities and Local Government are busy preparing national guidance along the same lines - due in spring 2018.

The DCLG consultation document 'Planning for the Right Homes in the Right Places', states: 'Viability assessments can be complex. The process is seen as being susceptible to gaming; and is often viewed with suspicion by authorities, communities and other observers. In particular, estimating future values and costs can be manipulated to reflect a range of outcomes.'

The assessments are 'not scientific', according to Dr Colenutt, and 'every ingredient is debatable', from land value to agent fees.

'Any kind of cracks in local authority planning policy framework - if it is out of date or they do not have a five year land supply - will be jumped on by the development industry,' he said.

'The local authorities find themselves trapped in a battle that is very difficult for them to win. They have to be in the business of ensuring their own policies are watertight and be prepared to challenge the perceived wisdom of the development industry.'

Under the Greater Norwich Joint Core Strategy, 12,210 new affordable homes have to be built between 2008 and 2026. But between 2008 and 2016 just 3,810 were completed, according to DCLG data.

Castle House, the building above Maplins in Castle Meadow, which may be turned into flats. No afford

Castle House, the building above Maplins in Castle Meadow, which may be turned into flats. No affordable homes are being proposed, when eight should be built under council policy. Picture: DENISE BRADLEY - Credit: Copyright: Archant 2016

Andrew Proctor, chairman of the Greater Norwich Growth Board, said its councils 'always seek to achieve the maximum benefit for their communities from development proposals including a range of affordable housing.'

'There will be cases when a compromise may have to be made to see a scheme delivered,' he said.

'Generally authorities in Greater Norwich employ consultants to fully scrutinise viability appraisals on the council's behalf and in some cases authorities use the District Valuer Services for this work.

'Wherever possible, we make all relevant financial information available to public scrutiny. Sometimes there are occasions when the commercial sensitivity of a proposed development means that an authority is unable to put all the financial details in the public domain. However, even if some financial details are not in the public reports, the information is still made available to the relevant planning committee members so as they can properly scrutinise and, where appropriate, challenge these figures.'

Billionaire behind shoe factory development

Conservative party donor Michael Hintze is the majority shareholder in The Shoe Quarter Ltd. Picture

Conservative party donor Michael Hintze is the majority shareholder in The Shoe Quarter Ltd. Picture: Creative Commons licence - Credit: Archant

Last week Norwich City Council approved outline plans for 150 homes and a new hotel at the old St Mary's Works shoe factory.

The majority shareholder for the applicants - The Shoe Quarter Ltd - is Conservative donor and billionaire Sir Michael Hintze. He is one of the 1,000 richest men in the world whose hedge fund posted $120 million pre tax profit last year.

The Shoe Quarter Ltd argued only four affordable homes of the 50 required under city council policy would be financially viable at the site.

Green Party councillor Denise Carlo, who voted against the application, said the offer was 'miserly'.

'Sir Michael is clearly someone who has enough wealth to house everyone on the council's waiting list,' she said. 'Norwich City Council has once again rolled over and sacrificed its own affordable housing policy. By failing to stand up to greedy developers, the council is falling short on meeting its own affordable housing target in a city suffering from a housing crisis.'

Green Party city councillor Denise Carlo voted against plans to develop St Mary's Works. Photo: Deni

Green Party city councillor Denise Carlo voted against plans to develop St Mary's Works. Photo: Denise Bradley. - Credit: ©Archant Photographic 2008

Dominic Richards, chief executive of developers Architekton and applicant The Shoe Quarter, said: 'The planning application has been fully tested and amended during the extensive planning process.

'I am completely committed to affordable housing. I understand that it is important, but there are hoops we need to jump through and we will deliver what we can.'

Affordable homes lost

Long-awaited work on up to 670 homes at the Deal Ground site in Norwich has stalled for almost six years since outline permission was granted in 2012.

When diggers do move in, the city will have lost out on nearly 200 affordable homes after accepting the viability assessment from developers Serruys Property Company Ltd.

If the development were to meet affordable housing policy of 33pc, 221 affordable homes should be delivered. But the developer argued this would cause profit to drop below 10pc and render the whole project unviable.

Instead they sought to secure just 27 affordable homes, with 'top-up payments' to the city council if the situation improved.

But over recent months the city council has made moves to resist viability assessments they disagree with.

A development at St Peter's Methodist Church was refused when the applicant refused to budge from a position set out in their viability assessment - offering three affordable homes on site or a commuted sum of £371,800.

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