In a resolution, the UK High Court disallowed the execution of a government policy that would have allowed luxury landlords to avoid payment of nearly £1bn in affordable housing per year. In a report from independent.co.uk, the loophole allowed developers to convert vacant office buildings into flats after payment of the affordable-housing levy on the new space created and not the whole structure.
The scheme was introduced by UK Housing Minister Brandon Lewis back in 2014, calling it 'vacant building credit'. Right after being unveiled, it was heavily criticized by housing councils that had chronic housing shortages.
One of the more vociferous critics is the Westminster council in London, saying it could lose as much as £1bn a year, calling the policy 'insane.' In one instance, the influential council said that a payment from the Abu Dhabi Investment Council with Finchatton, a UK developer would have shrunk from £17.6 million to £8.6 million for its redevelopment of the former US Navy HQ in Mayfair.
Another major issue is the exclusion of developments of ten (10) homes with square footage of under 11,000 or less from payment of the affordable housing levy, according to a report from standard.co.uk.
A suit was filed in court by petitioners West Berkshire District Council and the Reading Borough Council and received judgment saying that part of the said affordable housing policy was incompatible with the overall framework of planning.
The court's decision was welcomed by many. One supporter, Labor Mayoral Candidate Tessa Jowell said, "The vacant building credit has done untold damage to London and has now rightly been quashed by the courts. This Tory scheme delivered developers a loophole to avoid providing any affordable housing - just when our city needs it most."
Housing activist group Generation Rent, "This loophole absolved them [developers] of any responsibility to make a contribution to wider society and with the economy booming that is completely unjustifiable."
