Under the terms of a section 106 agreement signed in September 2013, appellant Sugar Quay Holdings had agreed to provide an affordable housing contribution of £15 million in lieu of on-site provision.
But earlier this year it launched a bid under an appeal mechanism introduced two years ago under the Growth and Infrastructure Act to modify the affordable housing obligation. It appealed against the City of London Corporation’s failure to determine its request to modify the section 106 affordable housing obligation by reducing the total contribution from £15 million to £11.2 million.
According to inspector Ava Wood’s decision letter, issued this week, the appellant had submitted a viability assessment to the City of London Corporation in February 2014 to demonstrate that the development - intended to comprise duplex penthouse accommodation from the seventh floor upwards - could not afford to make any additional affordable housing payment beyond a first instalment of £7.5 million.
The letter said that the developer had later applied to the corporation to modify the agreement to require a total affordable housing contribution of £11.2 million, but the corporation decided to continue to press for the full payment of £15 million, giving rise to the appeal.
The inspector concluded that the "development permitted is a viable proposition with the current affordable housing obligation in place".
"Overall, my conclusion is that the scheme is capable of bearing the cost of the affordable housing contribution offered by the current obligation," he decision letter said. "There is no need therefore to consider whether modifications to the obligation are necessary to make the project viable."