City backs builder, not poor families

Jan 15 2009 by Adrian Pearson, The Journal

HOUSING chiefs have been accused of turning their back on poorer families as they prepare to scrap affordable housing targets.

Officers at Newcastle City Council have recommended removing a planning condition which would have forced developer Gladedale to sell some homes at a lower value.

It came after the builder warned it risked going out of business if it was not allowed to offload the homes at a higher price.

Last night Newcastle Central MP Jim Cousins said the decision was “an absolute betrayal” of families looking for help in finding a home. Gladedale last night insisted it always sought to build affordable housing in its developments.

The company has already secured permission to build 66 homes on the site of the former Carricks Bakery, on Ponteland Road, Blakelaw.

But when Newcastle councillors granted planning permission in February 2007, they insisted 16 houses at The Bakers be set aside for families on lower incomes, with up to 30% knocked off the asking price.

The developer says that was before the credit crunch took hold, and is now saying the recession has put the entire development at risk.

Gladedale said it was looking at a reduction of at least 20% on its asking prices generally, making all the houses more affordable.

In a stinging attack on the council, Mr Cousins said: “We need real affordable houses, not just endless press releases about the potential affordable homes the council says it wants to build.

“If the committee accepts these recommendations, which it will, it will set a dangerous precedent that will in effect see a collapse in the city’s affordable housing. People would never have agreed to this development if it had been proposed without the affordable housing element.

“This risks undermining the commitment to affordable housing and making it almost impossible to provide real low-cost housing desperately needed in Newcastle.

“This is an extremely serious moment in which councillors prepare to make an absolutely disgraceful decision to back developers and turn their back on families.”

A report to councillors on the development control committee says restrictions on the site risk further damaging “the viability of the business, which is already severely strained by the current housing and financial markets”.

Officers say: “At worst this will put Gladedale at significant risk of going out of business.”

The developer has warned if the legal agreement is not revised, the only other option available to the company is to mothball the site until the housing market picks up.

But though officers are recommending some changes to the deal, they say not all the problems can be put down to the credit crunch.

In particular, they suggest Gladedale may have been “overly ambitious” when considering how much it could get for the property at the price it paid.

A council spokesman said: “The council has ambitious targets to increase the supply of new homes, especially in regeneration areas, and to increase the supply of affordable homes.

“Unfortunately, the decline in sales value of new homes has resulted in it proving less economically viable for private housing developments to fund the provision of affordable housing.”

Gladedale North East managing director Len Worsfold said: “Gladedale is committed to meeting the need for modern local housing at affordable prices.

“Wherever there is a need demonstrated and the scheme is viable we strive to include affordable homes requirements within our developments.”

Councillors will debate the proposals tomorrow.