Southwark's planning committee has approved plans to build new council homes - funded by cash from the developers of luxury riverside apartments - in Bermondsey's Willow Walk.
The scheme for a 54-bedroom short-stay accommodation block and 21 new council homes is part of Southwark's drive to build 1,000 council homes by 2020.
The council has so far named nine sites where it plans to build new homes for rent using cash provided in lieu of on-site affordable housing by developers of prime riverside sites such as King's Reach Tower, Neo Bankside and One Tower Bridge.
The Willow Walk scheme – designed by PRP Architecture – will be built on the site of existing short-stay accommodation blocks adjacent to the Setchell Estate.
A new street linking Willow Walk and Setchell Road will be created between the two new buildings. New trees will be planted on the site and nearby to replace the 14 which will be felled to make way for the development.
The new temporary housing block, with a maximum capacity of 151 people, will be used to reduce the council's reliance on bed and breakfast accommodation for families the council is waiting to place in a permanent home.
The committee heard from Sheila Webb, secretary of the Setchell Estate Tenants' and Residents' Association, who voiced concerns about the high turnover of neighbours moving into the temporary accommodation.
However, Mrs Webb acknowledged that the development would improve the aesthetics of the estate. "It looks like Colditz now," she said.
Tuesday night's planning committee meeting also approved a development of 45 council homes on the East Dulwich Estate which will also be funded by cash from the riverside developments in SE1.