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28 July 2014

The London development without a poor door

Because providing affordable housing is too expensive.

By Barbara Speed

Apartment blocks which use “poor doors” to segregate tenants based on their wealth have been hitting the headlines recently on both sides of the Atlantic. But for the developers of one London block of flats, the prospect of letting affordable renters in – even through a separate door – was too much to contemplate.

One the Elephant, a 37-storey building with 284 residential units at the glamorous Elephant & Castle roundabout, was granted planning permission in November 2012, and is currently under construction. The London Borough of Southwark has internal targets which require all new developments in Elephant and Castle to include a minimum of 35 per cent affordable housing.

But in council planning meetings, developers Lend Lease argued that they would be “unable to support the inclusion of affordable housing within the development”. The firm’s reasoning was summed up in a council report as follows:

 A second core would be required to provide separate access, including lifts and circulation areas, to socially rented accommodation within the development…. the cost of construction would increase with the introduction of a further lift, as well as separate access and servicing arrangements.”

In other words, it’d cost too much to segregate the two types of tenant. And, in case you were wondering, they had to have separate entrances, because “not doing so would have significant implications on the values of the private residential properties”.

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Luckily for Lend Lease, Southwark council came up with an ingenious solution. Southwark Council’s planning policy states that developments can bypass the 35 per cent affordable housing minimum “in exceptional circumstances” by “making a payment in lieu”: this can be invested in community services or affordable housing elsewhere. So instead of devoting 35 per cent of the development – around 100 units – to affordable housing, the firm could contribute £3.5m to the construction of a community leisure centre next door (it’s expected to cost a total of £20m).

Southwark estimates that, at current build costs of “£100,000 per habitable room at current values”, putting up 100 affordable units would set you back around £10m. That’s nearly three times as much as Lend Lease donated to the new leisure centre. By declining to build the affordable housing, the developer seems to have saved itself a packet.  

Darren Johnson, a member of the London Assembly who campaigned against the decision, said by email:

 It’s outrageous that the council and the Mayor of London would accept this argument, that the cost of ‘poor doors’ should mean there will be no flats in the development for ordinary Londoners at all.”

He called on the Mayor to threaten to refuse any such applications, “and strengthen planning policies against segregation”. Fingers crossed. 

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