There were a number of newsworthy takeaways from Southwark Council's recent approval of the 48 storey, 740-home development on the Old Kent Road, and subsequent fall out. One to note was the precedent set in terms of affordable housing delivery on land held in local authority pension pots.
Since the publication of Homes for Londoners by the Mayor’s office in 2017, the redevelopment of public sector land in London has been required to deliver 50% affordable housing (subject to viability). However, a working assumption has been that this excludes land owned by public sector pension funds. The alternative would put such funds at a considerable competitive disadvantage against private sector peers. Surely the policy can’t have intended to so directly penalise public sector employees?
To see this assumption confirmed in official forum by Jon Gorst (Southwark's head of regeneration and development) is a relief, both for those managing and, more pertinently, those invested in such funds, who are already faced with the headwinds of political uncertainty and fundamental upheaval in the retail sector. Furthermore, with institutional funds comprising the second largest landowner in London (after the public estate) it is also good news for those in favour of promoting housing delivery in the capital. Delivering housing against the wider GLA hurdle of 35% affordable housing already provides significant challenges, never mind the higher 50% rate.
The decision will now pass to the GLA for their final approval, which we must hope is forthcoming.
"There should be a clear distinction between land which a public authority owns in its own right, and (as is the case here) land which they hold for the benefit of others," Gorst said his "firm view is still that the GLA are mistaken to contend that this site should be subject to 50 per cent affordable housing"