07 Vauxhall Square, item 6. PDF 626 KB - Lambeth Council

7.15 Affordable Housing:
7.16 The London Plan Policy 3.12 requires borough councils to seek maximum
reasonable amount of affordable housing when negotiating on individual private
residential and mixed-use schemes. Policy S2, part c, at least 50% of housing
should be affordable where public subsidy is available or 40% without public
subsidy, subject to housing priorities. Policy 16 of the UDP sets out that a
range of unit sizes of affordable housing should be provided, having regard to
local circumstances, site characteristics and the aims of the borough’s annual
housing strategy. It goes on to set out the presumption that affordable housing
should be provided on site. Policies further state that there should be a tenure
mix of 70% socially rented units and 30% intermediate.
7.17 Policy 3.12 of the London Plan urges local authorities to take account of
economic viability when estimating the appropriate amount of affordable
housing provision. This is also supported by Lambeth’s Core Strategy Policy S2
(c) where relevant, to independently validate evidence of viability. The proposal
originally incorporated 94 affordable housing units equating to 15 %. This was
below the 40% affordable housing requirement sought under policy S2 of the
Council’s Core Strategy. Through negotiations this was increased to 21.2%.
Further justification of the quantum of residential floorspace was sought to
demonstrate that the maximum viable amount was being provided. The
applicant submitted a viability report produced by GL Hearn on the amended
proposal. This document has been independently assessed by BNP Paribas.
7.18 BNP Paribas concluded that the proposed development would ascertain an
overall profit of 5.435% on cost or 5.04% on Gross Development Value (GDV).
Therefore the development is currently in deficit and substantial market
improvement would be required to allow any surplus to be generated. As such
the proposed development is unable to provide any additional affordable
housing above the 21.2% being proposed by the applicant.
7.19 The original submitted scheme proposed 94 affordable housing units equating
to 15%. After extensive negotiations with the applicant this has been increased
to 110 units. The guaranteed on-site affordable housing element of the scheme
therefore now comprises 21.2% by unit number with a tenure split of 58%/ 42%
for affordable rent/ shared ownership by unit. Although the proposed quantum
falls below the policy requirement of 40%, regard should be given to the viability
of the scheme, which has been independently verified. In this regard the
proposed quantum of affordable units is supported by officers.
7.20 The proposed mix of the affordable units are outlined in the table below:
Unit Total Percentage
mix
1bed 26 24%
2bed 50 45%
3bed 34 31%
Total 110 100%
The application proposes some of the shared ownership units within the