Chichester District Council has voted to give £165,000 to a housing association to provide eight new properties as affordable rented homes.
The homes are among 11 being built by developer Radian, at Flat Farm, Hambrook, on behalf of the Windsor & District Housing Association, and were originally intended to be sold on the open market.
The remaining three had been allocated as shared ownership affordable housing.
But due to ‘issues with mortgage availability’, the company asked for all 11 to be seen as affordable rented homes and for the council to help subsidise the scheme.
A report put before a meeting at East Pallant House on Tuesday (November 20) said that Radian had invested £200k into the scheme, with a further £660k coming from Homes England.
This left a shortfall of £165,000.
The sum will be taken from Section 106 contributions received from recent developments, which was specifically set aside for affordable housing.
Known as commuted funds, Chichester currently has £1,189,685 of such contributions in its coffers, waiting to be allocated.
There was some concern that the developer was simply asking the council to ‘make up the shortfall’ because it couldn’t sell the houses ‘at the profit they were expecting to make’.
Jonathan Brown (Lib Dem, Southbourne) said: “It would appear that the developers have got permission to build houses for commercial sale and have basically over-estimated what they think they can get for them, and are asking us to subsidise their development.”
Council officer Louise Rudziak said this was not the case.
She added: “We’re basically putting in contributions so they can convert [the houses] to affordable rented or social rented properties to provide affordable housing rather than market housing.”
There are currently 17 households with a link to the parish on the council’s housing register, with more than one third rated as high priority.
As such, Jane Kilby, cabinet member for housing services, said the scheme was a ‘cost-effective opportunity to provide more, much-needed high-quality affordable housing for local people’.
She added: “There’s no other affordable rented unit programmes up to 2029 in the parish, so this will be the last chance for a while for local people to be housed within the parish.”
Once complete, the development will deliver five two-bedroom, four three-bedroom and two four-bedroom homes for affordable rent.