Judge issues verdict on Mayor’s battle with retirement developers

May 23, 2018 / Isla MacFarlane
Judge issues verdict on Mayor’s battle with retirement developers

The Mayor of London’s Office has welcomed a judgment handed down by the High Court that has backed the Mayor’s ‘threshold’ approach to affordable housing.

The High Court ruled in favour of ground one of the judicial review of the Mayor’s Supplementary Planning Guidance (SPG), which is therefore not lawful in one respect.

Following a legal challenge by four retirement developers, a statement from City Hall claimed that the Hon Mr Justice Ouseley ruled that the Mayor’s threshold approach, which allows developments to be fast tracked through the planning system where they provide at least 35% affordable housing, is consistent with the adopted London Plan.

However, Churchill Retirement Living has responded that the statement is “extremely misleading”, and that the judge found the SPG was inconsistent with the London Plan and therefore unlawful.

A spokesperson on behalf of the retirement developers’ consortium said, “We’re delighted to have been successful on ground one of the judicial review. Today’s judgement shows the extent to which planning policy at the national and local level is not sufficiently supportive of the housing needs of older people.  The Mayor’s new policy would exacerbate the situation by effectively making it economically impossible to bring forward private retirement development in London. Older people are the fastest growing demographic in the capital and the London Plan calls for around 4,000 new retirement housing units to be built each year.  However, supply is currently in the low hundreds.”

“If the Mayor’s target is to be met, a proper planning and affordable housing policy is required that fully recognises the unique viability model of specialist retirement housing. This was why we brought this case to the Court.  We need a positive planning policy for London’s elderly population and the Mayor now has the opportunity to review his approach.  We look forward to working closely with him and his team to agree a resolution and increase much-needed housing options for older Londoners.”

Paragraph 56 of today’s judgement notes that “On that point, I find that the SPG is not consistent with the London Plan in one respect, and is to that extent not lawful. I give permission for the point to be argued. I will hear submissions on the appropriate remedy, if any, for the inconsistency I have found to exist.”

Ground one noted that the SPG represents a substantive new policy, which should have been subject to an independent examination.

Jo Johnson MP, the Minister for London, said,  “Older Londoners are a vital part of this city’s communities, and it is a shame that the Mayor is not working constructively to ensure their housing needs are met. We want Londoners to be able to remain here in retirement, and to help boroughs build housing suitable to meet the needs of our ageing population.”

City Hall claimed that the judge rejected claims by McCarthy and Stone Retirement Lifestyles Ltd, Pegasus Life Ltd, Churchill Retirement Living and Renaissance Retirement Ltd that this policy, contained within the Mayor’s Supplementary Planning Guidance (SPG) on Affordable Housing and Viability, would fail to secure the maximum reasonable level of affordable housing.

Jules Pipe, Deputy Mayor for Planning, Skills and Regeneration, said, “Tackling the capital’s housing crisis is the Mayor’s top priority and this ruling is an important moment for thousands of Londoners who are desperate for genuinely affordable homes to rent and buy.

“Our guidance sets out a clear approach that makes the planning system in London clearer, quicker and more consistent. I am pleased that the Judge has backed this approach which will help us to turn around years of neglect when it comes to building the homes Londoners so desperately need.”

The Mayor’s Draft London Plan includes the same requirements on reviews as the SPG.  The judgment confirms that this has weight as it is an emerging plan.

The judgment also rejected the claims of the retirement homes developers that the guidance should have been the subject of Strategic Environmental Assessment and found that the claims that the Mayor had failed to have due regard to his duties under the public sector equality duty of the Equality Act 2010 were unarguable.

The Mayor’s Affordable Housing and Viability Supplementary Planning Guidance was adopted in August 2017, and introduced a ‘fast-track’ process for dealing with housing proposals in which developers offer at least 35 per cent on-site affordable housing.

Specialist housing for the elderly would, in effect, be excluded from the fast-track process under the SPG, because it is not feasible to provide on-site affordable housing on schemes for older people due to the need for a single management regime within the development.

The target would then rise to 50% and the process that would then apply is the ‘Viability Tested Route’ to agree a financial contribution in lieu of the on-site provision, but with a ‘Late Stage Review’ to be undertaken once the development has been completed and substantially sold, so that the Mayor can capture an increase contribution from any additional profit. The judge found this latter provision in the SPG to be inconsistent with the London Plan and thus unlawful.

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