Housing is a big issue in the UK. In simple terms: we aren’t building enough affordable homes to keep up with increasing demand. This has lead to soaring house prices and a reliance on insecure and expensive private rented properties.
We see policy at a national and local level responding to this. The Mayor of London has created a draft new London Plan, which requires 35% of homes on new property developments to be affordable. But there’s a loophole; one that allows big property developers to negotiate down the amount of affordable homes.
Following the recession in 2012, it was a risky time to start building homes. So, property developers were given some wriggle room. They could negotiate how many affordable homes were built if they showed it put them at risk financially.
This gave rise to an entire industry surrounding what’s known as viability.
In short, it’s a developer weighing up if a new property development is viable: how much the building work will cost, and how much money they’re set to make. This is done through a document called a viability assessment.
If cost vs value comes out as a zero-sum, it’s looking pretty bad for affordable housing provision.
So these viability assessments were introduced to encourage more home building in uncertain times. But now they are a way for neighbourhoods to lose out on promised affordable homes at the expense of developers’ profits.