Analysis by Lambeth council suggests that had the government’s controversial Vacant Building Credit been operational, a third of the borough’s affordable housing provision would have been lost.
Based on 14 recently consented major schemes, predominantly in the Vauxhall regeneration area, the council has calculated that instead of a the current total of 866 affordable units, if VBC had been applied, this figure would have been 592 – a 32% reduction.
Currently the council seeks the maximum reasonable amount of affordable housing when negotiating schemes. On sites of at least 0.1 hectares or capable of accommodating 10 or more homes, at least 50% of units should be affordable where public subsidy is available and 40% without public subsidy, subject to viability.
The introduction of the Vacant Building Credit in November 2014 means the council will now only be able to require affordable housing on any increase in floor-space to a vacant building.
Cllr Matthew Bennett, Cabinet member for Housing said; “ These figures show this as yet another example of the government’s incoherent approach to the housing crisis in London which seems to be about searching for headlines, rather than real solutions.
This week’s announcement about starter homes is a non-starter as far as Lambeth is concerned and we now know the Vacant Building Credit will add to the pressure on affordable housing in inner London where most sites have existing buildings.
It offers land owners an incentive to empty buildings prematurely meaning jobs and business opportunities will be lost. The development industry had not asked or expected this measure and now need to work out how to react with very unclear guidance. The only people likely to gain will be landowners who have effectively been handed a big windfall they didn’t expect or need. “
Scope of the analysis:
- The data was based on 14 major schemes between 2009 – 2014;
- Schemes included Vauxhall Square mixed use (2014), Hampton House 20 Albert Embankment (2012), Sainsbury’s Wandsworth Road (2011) and Wentworth House Streatham Hill (2010);
- Of the 14 schemes a total of 866 affordable units would be provided, with the credit applied this would have been reduced to 592 – 32% reduction;
- The data excluded the Shell (unconfirmed floorspace numbers) and Vauxhall Island sites (no existing building so the affordable housing figure remains the same).
What is the vacant building credit?
Under national policy, where a vacant building is brought back into any lawful use, or is demolished to be replaced by a new building, the developer should be offered a financial credit equivalent to the existing gross floorspace of relevant vacant buildings when the local planning authority calculates any affordable housing contribution which will be sought. Affordable housing contributions would be required for any increase in floorspace.
What is the process for determining the vacant building credit?
Where there is an overall increase in floorspace in the proposed development, the local planning authority should calculate the amount of affordable housing contributions required from the development as set out in their Local Plan. A ‘credit’ should then be applied which is the equivalent of the gross floorspace of any relevant vacant buildings being brought back into use or demolished as part of the scheme and deducted from the overall affordable housing contribution calculation.