‘Council homes at Morning Lane must be funded by selling flats,’ insists Hackney Mayor as campaigners deliver petition

Any plans to build council homes at Hackney’s Morning Lane will need to be “cross-subsidised” by selling some flats, the borough’s mayor has said.

His comments come as a petition signed by 2,636 people was handed in at the Town Hall by campaigners who want to see more affordable homes on the council-owned site.

Adam Forman from Morning Lane Our People’s Space (MOPS) asked if the council would commit to exploring new funding options for the £60m site as the options with the developer expire within months.

He wants to see a high proportion of council homes along with a big Tesco supermarket of an “equivalent” size to the one already there.

Earlier this week, the council signalled it will be looking at other options for the site if developer Hackney Walk Ltd does not submit a planning application by the March deadline next year.

Mayor Philip Glanville said: “When we intervened to buy Morning Lane four years ago we were really clear that we were intervening in our town centre to stop the type of untramelled development we’ve seen in previous Tesco-led applications.”

He said the current agreement includes more retail, affordable workspaces, public areas, suitable parking and “crucially, a long-term income in terms of the council to offset austerity [and] invest in vital public services”.

He said the requirements for a certain size of Tesco was set by the supermarket giant at the time it sold the land to the council.

So far, option-holder Hackney Walk Ltd has not put in an application for the site but were looking at building a smaller supermarket along with other commercial space, and 450 homes in towers up to 19-storeys high.

MOPS criticised the plan to provide 20 per cent of homes at affordable rent, below the council’s 50 per cent target.

Mayor Glanville signalled that any new scheme would include “more affordable housing and workspace”.

He said it would also need a supermarket, “which eveyone recognises is incredibly important”.

He explained that the council is using feedback from its Hackney Central Conversation “to ensure the changes in the area benefit local people and businesses first”.

The borough leader added that the scheme must have cross-subsidy to cover the costs of building more social rent or council homes.

“It is important to come back to where we started,” he said. “Before a brick is laid, the scheme at Morning Lane must have as a starting point the land value repaid.”

He explained it costs between £300,000 and £400,000 to build a new council home on land the council did not have to buy.

“A third of the funding for those council homes comes from rent and borrowing, a third roughly from grants from the Mayor of London, and a third needs to be found from sales of private homes,” he said.

“Even to build new council homes, you need to sell 1.5 to two private sale homes for every council home that we build, and that does not include £60m land value.”

He said any plan needs to “fully understand these issues” or they will “lack credibility and will betray the residents who might be engaged in supporting it”.

“Whether we would be looking for a development party or looking to do it in-house, it is far too early to say,” he added.

Glanville said the council does not lack ambition in its plans to build council homes but it needs to be viable.

MOPS is concerned that the area could be gentrified and is keen to see far more socially affordable homes on the site so local people are not priced out.