"POOR doors” have been slammed on newspaper front pages in recent weeks – stories of luxury developments in New York with separate entrances for on-site affordable housing have spread across the Atlantic, as it turns out that there are similar arrangements in London too.
The outrage this discovery has provoked is understandable. Though the practice is not new, it seems to represent a chilling segregation in the heart of our cities, as wealthy residents get to use swanky entrances at the front, while affordable housing tenants are asked to enter through another door of the same building. But it’s important that the blame is fairly attributed. In the UK, a combination of our warped planning system and the law surrounding tenancies makes the reasoning behind this strange construction decision much easier to understand.
In the US, campaigners are angry because attaching affordable units means developers get a carrot for building them – a tax break. In the UK, it’s a stick: build the units, through something called a section 106 agreement with the local authority, or no planning permission at all.
But the bevy of staff and services that come attached to expensive properties are not included in the asking price, and could mean huge bills for tenants in low-rent flats. Developers are afraid of legal action if they allow private tenants in luxury apartments to cross-subsidise the service charges of affordable housing tenants, so separate entrances are constructed to let the latter avoid regular hefty fees.
Yet the perverse implications of section 106 agreements go much further. When economist Kate Barker wrote her seminal report on the inadequate British planning system, Barratt told her that major developments now take over a year to approve – four to five times what was required in the early 1980s, with section 106 talks named specifically as one of the factors which could slow down development.
And if protracted negotiations do retard development, it’s clear where they would do so most. More than half of all affordable housing units agreed through section 106 in 2011-12 were in London. The average local authority in London agreed the construction of 643 units with developers – ten times as many as the rest of urban England.
Further, given the current system, it’s not necessarily clear whether the alternative to so-called poor doors is any better. As The New York Times’s Josh Barro has noted: “Nobody complains about the poor door when it’s located four blocks away from the rich door.” If using separate doors to access the same building is bad, is having entirely separate buildings for affordable housing worse? Some developers have avoided this furore, as they were able to provide their quota of affordable housing on a different site entirely.
Ultimately, there’s only one real solution to Britain’s housing affordability crisis: build more homes. London councils rightly say that the city needs massive additional house building – something like 800,000 units over the next seven years. In 2013, only 11,460 permanent housing units were completed by private enterprise in London. Even if each one came with a section 106 agreement for five additional affordable units, the city would be nowhere near its target.
City A.M.'s Opinion pages are a place for thought-provoking opinions and views. These are not necessarily shared by City A.M.