Future of Hungate housing scheme unclear (From York Press)
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Future of Hungate housing scheme unclear
9:40am Monday 29th October 2012 in Business news
By Mark Stead, Political Reporter
THE future of a £130 million housing scheme in York remains uncertain despite developers winning more time to restart work.
Hungate (York) Regeneration Ltd, the firm behind the 720-home Hungate project, secured a fresh agreement from City of York Council last month which allows construction to resume in 2015, after its previous planning approval ran out.
However the developer has yet to seal a deal with the authority over affordable housing levels and the payments they must make towards community facilities having said the conditions agreed when permission for the development was originally granted in 2006 must be relaxed to make it viable.
Agents for Hungate (York) Regeneration Ltd said the developer could no longer afford to pay £6.6 million in “section 106 contributions” towards archaeology, open space, education, cycling, CCTV and a car club – as agreed six years ago – and the council should also reconsider a requirement for 20 per cent of the homes to be affordable.
The authority said talks were still being held over this, but any potential changes to the planning consent would have to be agreed by councillors at a meeting of its planning committee. Hungate (York) Regeneration Ltd has said that, without section 106 contributions, it would make a £15 million profit on the scheme - still less than it would usually seek - but its current obligations would mean a loss of £215,000.
Mike Slater, the council’s assistant director of city development and sustainability, said: “Hungate is an important city-centre development and we remain committed to working with the developers in order to continue to deliver a high-quality scheme.”
A spokeswoman for Hungate (York) Regeneration Ltd said: “We welcome the additional time we have been given for delivery of the next phases of our scheme.
"These are extremely challenging times for the housing market, and the property market in general, but we remain confident in the longer-term future of York as a city where people wish to live. We are not in a position to say anything further at present.”
Work on Hungate’s first 162 homes finished in 2009 but the scheme has since stalled. Five phases remain, with the developers saying they could be completed by 2024 if all planning issues are resolved.
Comments(18)
capt spaulding
says...
10:19am Mon 29 Oct 12
York Manor
says...
11:03am Mon 29 Oct 12
Comparrisons can be drawn with the East Coast Mainline, ie the government want too much in return.
What's the alternative the site remains dormant for years, with no one willing to take it on, come YCC common sense in these times please.
meme
says...
11:07am Mon 29 Oct 12
Its actually about how much the devlopers give to york when developing. What we in the business call 'blackmail ' payments
Times have changed. No developer will build at a loss so York should see sense and get something rather than nothing as we need the houses
greenmonkey
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11:52am Mon 29 Oct 12
yorkie71
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12:28pm Mon 29 Oct 12
(correct me of course if all developers are negating on their deals with the council)
meme
says...
12:34pm Mon 29 Oct 12
.....The dynamic element you refer to is just NOT correct
No appraisal takes accounts of overheads something CoYC have at last realised. Once set its set
Yorkie71..do you see Percies/Hoggs building..No because they will be asking same questions.. The Governments and yorks housing policies are a disaster for builders and then for the rest of us and as soon as we all wake up and realise this the sooner builders will get back to work
Even Central Government have realised this and are allowing huge changes in devlopers contributions
Whats better no new homes and jobs or reduced contributions and some new homes and employment? I know what I want
capt spaulding
says...
1:54pm Mon 29 Oct 12
greenmonkey wrote:But they have opened the books and they have demonstated it.
Bring in a land value tax so they have to either get on with building something or sell it to someone else who will. The affordable housing policy now has an in build 'dynamic' element so that the proportion rises and falls with property values. It allows for profit, it just a question of how much profit. This story is just trying to lever a better deal to give them more profits and fewer affordable houses. If the developer thinks they will make a loss at the current rate then open the books and demostrate it, if not get on with building the approved permissions.
No one works for nothing. No one takes risks that could bankrupt them.
The proof is, the site, as are many in York at a complete standstill due to Cof Y Councils refusal to be realistic.
Scarlet Pimpernel
says...
2:01pm Mon 29 Oct 12
aa42john wrote:Just run that past me again....
When a company signs up to an agreement like this, it is taking a risk, It may make a profit; it may not. Why should it try to transfer the risk to the public purse? Private profit; public loss. If the council agrees to an change, it must safeguard the public purse against private profiteers - like the York Wheel operators!
Hungate own the site, not York Council.
Hungate are investing in a private development, not York Council.
Hungate owe York Council nothing, but are expected to hand over £6.6m and build 20% of the dwellings at a loss, in return for planning consent.
Legalised blackmail exists, and the Council act like an extension of the Treasury. It all has to stop.
If York Council want houses, jobs and ecomomic growth, they need to stop screwing over housebuilders. They should ask their new buddies Hiscox to stump up the money, after all they only paid £1m tax on their last six months profits of £125m, so £6.6m more in tax is still less than they owe ? !!!!!
Scarlet Pimpernel
says...
2:07pm Mon 29 Oct 12
greenmonkey wrote:Why don't you buy the site from Hungate and show thenm how it's done ?
Bring in a land value tax so they have to either get on with building something or sell it to someone else who will. The affordable housing policy now has an in build 'dynamic' element so that the proportion rises and falls with property values. It allows for profit, it just a question of how much profit. This story is just trying to lever a better deal to give them more profits and fewer affordable houses. If the developer thinks they will make a loss at the current rate then open the books and demostrate it, if not get on with building the approved permissions.
Dynamic viability modelling did it's inventor Dr Richard Fordham a lot of good didn't it ? He took his own medicine and went bust three times, and is no longer operating as an affordable housing viability guru. Instead of telling others how to do it, Greenmonkey and the looney council officers and councillors making these ridiculous unworkable rules should show us how it's done. Put up your money, or shut the **** up, why don't you ?
Scarlet Pimpernel
says...
2:09pm Mon 29 Oct 12
yorkie71 wrote:That's because the council are blackmailing Persimmon and Hoggs.
This wouldnt be the only land developers have planning permission for which they are not building on, germany beck for example, I dont see the council being blackmailed by Persimmon & Hoggs !! why should they by the Hungate developers ??? (correct me of course if all developers are negating on their deals with the council)
York Council's housing policies don't work - ask the owners of the stalled major sites for over 2,000 dwellings ? !!!!
Sawday2
says...
5:59pm Mon 29 Oct 12
bob the builder
says...
6:34pm Mon 29 Oct 12
Sawday2 wrote:In the UK it's called Planning Consent in order to make it legal.
It's pretty obvious that CYC doesn't want these houses to be built until a big enough bribe has been paid. In any other country this would be called corruption.
Pedro
says...
8:45pm Mon 29 Oct 12
bob the builder wrote:So you think that the government raising LESS tax and/or getting less value from very profitable builders is the way forward? The Barbican was built with Tesco money. We would have preferred to get nothing? By the way - to other posters - the council HAVE to play poker against developers. That is their duties as imposed by central government. They are not doing it off their own bat!
Sawday2 wrote:In the UK it's called Planning Consent in order to make it legal.
It's pretty obvious that CYC doesn't want these houses to be built until a big enough bribe has been paid. In any other country this would be called corruption.
capt spaulding
says...
10:34pm Mon 29 Oct 12
Scarlet Pimpernel
says...
12:28am Tue 30 Oct 12
I'm sorry you, got two things wrong.
Housebuilders are not very profitable actually. The top 20 in the UK have a combined turnover for the last four years of £49billion and made a combined net loss of £4.6billion. In the last year, the top 20 had a combined turnover of £11.8billion and made a combined pre-tax profit of £600million (5%). Most of the profit was made by the top 10, and the 11th to 20th still made a net loss. If they continue to make the same level of profit, it will take another eight years to cancel out the losses meaning they will have not made any money for twelve years.
York Council does not follow government guidelines on affordable housing. It set an illegitimate 50% target which was not supported by a viability study, and kept this in place for almost six years by avoiding having an AHVS. The council have an obligation to provide market and social housing, but, by playing political games; manipulating reports, consultations and policy, they are cheating the system. The government are onto them, and if they don't get their act together the planning inspectorate will overide them on agree future planning applications.
dementia
says...
1:54pm Tue 30 Oct 12
capt spaulding
says...
8:36pm Tue 30 Oct 12
Sawday2 wrote:You dont know the half of it mate. Ask someone at C of Y Planning what an
It's pretty obvious that CYC doesn't want these houses to be built until a big enough bribe has been paid. In any other country this would be called corruption.
"Affordable Space Contribution" is.
My interpretation is ( Being Mugged.)
York is definately closed for business unless you have deep pockets
aa42john says...
10:13am Mon 29 Oct 12
If the council agrees to an change, it must safeguard the public purse against private profiteers - like the York Wheel operators!