Celebrated local muralist Brian Barnes MBE is appalled that the latest plans for redeveloping Battersea Power Station may go ahead without any provision for low-cost affordable housing for local residents and key workers.
Treasury Holdings UK (THUK) are maintaining that their proposed development would be in deficit to the tune of £313.50 million even before construction began and before there could be any contribution to Section 106 obligations.
Section 106 agreements are binding on developers undertaking a major building project to compensate for the adverse impact that this might have on the area by providing additional benefits in either cash or kind. These might be in the form of affordable housing, educational facilities or new open green spaces, for example.
Barnes suggests that the reason for the deficit lies in the drastic drop in land valuation since the original deal was made and also because the developer’s Internal Rate of Return (IRR), ie profitability margin, has been set at 25%, compared with other developers’ IRR margins of 20%.
Barnes, who is a campaigning member of the Battersea Power Station Community Group, asks: “Why are THUK doing it at all, if it is not financially viable? Theirs is surely an argument to subvert GLA housing policy that requires up to 50% of affordable housing in all large developments.
“It is incredible that a £5 billion redevelopment will all hinge on affordable housing, causing the financial viability to be harmed and for there to be a £313.50 million deficit, even if no affordable housing is provided.”