Developer gets £9m affordable payment phased "because of Brexit"
Bill Tanner
12:50 July 28, 2016
Planners have accepted a developer's request to pay a £9 million affordable housing contribution in phases because of Brexit.
The applicant asked to pay one third of the contribution paid on commencement, one third after 18 months, and one third on first occupation given "current uncertainties" in the financial and debt markets created by Brexit.
Viability consultants for Westminster Council wanted full payment from the off.
The decision was left to the relevant planning committee – which said yes.
Under the plan, part of a listed historical crescent was pitched for redevelopment as 76 new residential units, including a terrace of nine mews houses.
Westminster Council policy requires that new housing developments of either 10 or more additional units – or over 1000sqm of new residential floor space – a proportion of that floor space is expected to be provided as affordable housing.
The application resulted in a floor space increase of 22,510sqm.
A planning committee was told that, applying the Interim Guidance, a scheme of such size is expected to provide 70 units,
Met by a financial payment in lieu, this would generate a requirement for £28,302,400.
In the consented scheme, the applicant's viability report was reviewed with advice that it could viably support £13,165,000.
This – together with a £254,054 Community Infrastructure Levy (CIL) payment – was secured by legal agreement to a total payment of £13,419,054.
The applicant initially argued that with increased build costs – the inclusion of Westminster CIL costs of £4,388,414 – that the development could only viably support an affordable housing payment of £1.62M.
However, they offered to provide a commuted sum of £8,776,568 towards affordable housing which – together with CIL payments – would have matched the overall charges incurred in the consented scheme.
The council employed consultants to review the applicant's financial viability case. They said that the scheme can support an affordable housing payment of £8,986,710 – even with the additional CIL charges and increased build costs.