Published: 24 Aug 2017 by Rose Grayston

It’s now more than two months on from the Grenfell Tower fire, and many of those who survived this terrible event are still living in hotels, traumatised and without the basic comforts of home. Many survivors need time to grieve and recover before they can start to think about a permanent new place to live. But there’s no doubt that Kensington and Chelsea Council’s progress on identifying suitable accommodation, both temporary and permanent, has been far too slow for survivors.

So why has the council found it so difficult to identify enough suitable homes in the area for 151 families to live in?

The truth is Kensington and Chelsea hasn’t been building enough of the low-rent homes into which Grenfell survivors might have moved for years now. Just 43 social rent homes were completed in 2015-16, while 2014-15 saw a net loss of 8 social homes.[1] This is despite house prices and private rents being the highest anywhere in the country, meaning social rent homes are the only thing stopping low-income households being forced out of the area entirely.

How has this been allowed to happen?

Shelter research featured on Channel 4 news this week shows how a planning system rigged in developers’ favour and competing priorities in the council conspired to reduce the social rent housing in one 280-home development to zero.

When Kensington and Chelsea first gave planning permission for Tesco’s development arm to build homes at West Cromwell Road in 2011, the council’s housing policy should have meant that half the total floorspace was used to build affordable housing for local people; a mix of shared ownership to help people buy and social rent for the lowest-income households. This could have meant an extra 119 social rent homes on a development less than two miles away from Grenfell Tower.

Sadly, this was not to be. From the start, Kensington and Chelsea accepted the developer’s argument that it could not afford to build this many social homes, especially not when the council also wanted contributions towards a leisure centre and a creche. They settled on 47 social homes, the majority of which would be larger family homes to tackle serious overcrowding in the borough. Another nine homes would be for shared ownership, and the remaining 224 would be luxury flats for private sale.

But this is not the end of the story. Over the following years, Tesco kept coming back to whittle down the number of social homes on the scheme: first to 34, then to 28, until finally, in 2015, Tesco applied to remove the social housing block entirely. They would build 27 homes for shared ownership, 227 private homes for the super-rich, and nothing at all for local people on low incomes.

The council refused, rightly furious at the loss of social housing. But the developer knew it had the law on its side, and vastly superior resources to fight its case at appeal. Tesco won. To add insult to injury, it even succeeded in claiming back partial legal costs from Kensington and Chelsea. It’s not difficult to see why some councils fail to fight their corner.

Two key features of the planning system allowed the developer to get away with eliminating social rent housing at West Cromwell Road:

Viability

The government’s National Planning Policy Framework enshrines in law developers’ right to make a 20% profit. At any time, a developer can submit a financial viability assessment showing that a scheme has become insufficiently profitable, enabling them to argue down their social housing commitments. Viability assessments can also be submitted to the council in secret without the public ever getting to see what’s going on.

Planning by appeal

Too many schemes are being rubber stamped at appeal because developers’ legal experts find a technicality which makes it impossible to stop the scheme, rather than because the scheme will deliver the housing local communities need. Councils are routinely outgunned by developers’ legal teams, which might be why they paid out £12 million in lost planning appeals between 2010-2016.

This needs to stop. Central government should close the viability loophole, remove the legal entitlement to a 20% profit, and get these assessments out in the open. We need to stop treating local people’s housing needs as an optional extra. New developments should be built because they will be of benefit to the community – not because they sneak through on a legal technicality. This won’t be enough to help Grenfell survivors today, but it’s the only way to ensure there are homes for their sons and daughters in the future.

So what happened to the development at West Cromwell Road in the end? Tesco sold the site, along with 13 others, to a private equity firm for £250 million in October 2015. Not bad for a scheme so unprofitable no social housing could be built there. We’re still waiting for the new owners to finish the first home.

[1] Mayor of London (2017) London Plan Annual Monitoring Report 13, https://www.london.gov.uk/sites/default/files/amr_13.pdf