Developers of luxury homes in Waterloo and the South Bank could be able to meet their affordable housing requirement through off-site provision under policy changes agreed by Lambeth council's Labour cabinet.
"We are looking at increased flexibility for off-site affordable housing where we are convinced that we will get a much better outcome, both in terms of quantum and tenure, and where the site dictates it," said Cllr Pete Robbins, Labour cabinet member for housing and regeneration.
Cllr Jeremy Clyne, for Lambeth Liberal Democrats, told last week's cabinet meeting: "We don't approve of off-site provision as proposed. It's contrary to the principle of balanced and sustainable communities."
Lambeth officers wrote in a report to cabinet that "on many sites, particularly in the north of the borough, a higher level of provision could be secured off-site than would otherwise be secured on-site as costs are prohibitive".
Figures published by Lambeth Council show that a 3-bedroom affordable home in Waterloo SE1 would require developer or government subsidy of £796,000, compared to a subsidy of just £112,000 for a home of the same size in Norwood Park.
Examples of schemes where Lambeth has recently agreed to luxury developments building their associated affordable housing off-site include the Shell Centre redevelopment where – subject to the final decision of communities secretary Eric Pickles – 70 council-rent homes will be built in Lollard Street SE11.
Last month Lambeth's planning applications committee agreed to remove all on-site affordable housing from a high-end scheme on Albert Embankment in exchange for the promise of new council homes on a nearby site.
Although Lambeth insists that its draft local plan "maintains the presumption that affordable housing should be provided on site" it also contains provision that "where it is demonstrated to the satisfaction of the council that neither on-site nor off-site provision is appropriate, a payment in lieu may be accepted".
Although on paper neighbouring Southwark's policy also favours provision of private and affordable housing on the same sites, that council now routinely accepts in-lieu payments from developers in the SE1 area which are pooled to support the council's own borough-wide house-building programme.
• Lambeth's cabinet agreed to receive a further report on the use of commuted sums or in-lieu payments for affordable housing at a future meeting