Birmingham’s affordable housing shortage – how developers exploit loopholes to put profit first

The Council promised that 35% of new developments would be affordable housing, but achieved less than 10%. Of the 4,768 houses approved for development in 2016/17, just 425 were lower cost housing, according to figures obtained in a Freedom of Information request by BirminghamLive.

The Birmingham Post online July 2 reports that house builders are exploiting loopholes in planning regulations to avoid providing affordable housing in the city. They are allowed to sidestep rules on affordable housing if they can show that providing discounted homes would stop the development making a profit.

Last year, the housing charity Shelter revealed that during 2015/16, Birmingham developers behind the construction of 2,916 homes were able to backtrack on promises to deliver 1,003 of them at the affordable rate by arguing their profits would be unfairly hit.

The problem also impacts on people trying to get social housing. In the West Midlands, there are 97,526 households on the social housing waiting list, according to figures from 2017, but there are just 37,840 available lettings. In Birmingham alone – a deficit of 3,135 social rent lettings.

By far the biggest developer of housing in the city is the council itself, under its Birmingham Municipal Housing Trust arm. But even it has to sell about 50% of the 1,000 plus homes a year it is building to fund further building.

Polly Neate, chief executive of Shelter, says the social housing waiting list “a national scandal” that is happening right across the country including in Birmingham and the West Midlands.

“People are being condemned to a life of unstable and expensive renting, forcing them out of areas they can no longer afford to live in,” she says. “But if we want to build enough genuinely affordable housing, we need to be prepared to pay for it.

“This means bringing down the mammoth cost of land. And getting rid of planning loopholes that make it too easy for developers to wriggle out of building affordable homes.”

So what can be done to solve the problem? Birmingham Labour councillor Peter Griffiths, who was until May the city’s cabinet member for housing, argues that the council should be more forensic in its analysis of developers’ figures.

He also suggests linking affordable housing contributions directly to the profitability of building projects.

Griffiths, who is now on his second spell on the city’s planning committee, is sceptical about the viability assessments that developers have to do to prove that they could not afford to build if forced to discount homes, and wants to get more of them independently audited.

In some cases he has found figures to be questionable. Affordable housing is supposed to be below 80% of market value, yet he says that some developers make assumptions of 60% just to tip the development into a loss on paper and excuse themselves the discount.

The Birmingham Post report quotes one would-be home-buyer priced out of the market. Jess Taylor says the solution should be simple. Birmingham Council – and the government – should choose to prioritise building affordable homes to fix the problem. “I think all new homes should fall under affordable brackets. Thirty-five per cent isn’t enough.”

Come and hear Councillor Sharon Thompson, the new Cabinet member for Housing, speaking on the issue  at the Birmingham Trades Council meeting on Thursday 5 July at 7.30 in the Council House

You can read the full report by Neil Elkes, Nicola Slawson and Sarah Probert in the Birmingham Post at

https://www.birminghampost.co.uk/news/regional-affairs/truth-behind-birminghams-affordable-housing-14853116?utm_source=birmingham_post_newsletter&utm_medium=email&utm_content=EM_BirminghamPost_Nletter_News_Mediumteaser_Text_Story2&utm_campaign=daily_newsletter

 

 

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