Planning experts have said Cornwall Council's approach to affordable housing could stifle delivery and do the "polar opposite" of what it has set out to achieve.
Under new planning guide-lines the council has placed a 40% or 50% affordable housing requirement on every development for two or more properties.
With around 28,000 people on the waiting list, the creation of affordable homes is a key priority of the new council, however critics fear the guide-lines, set out in the draft Cornwall Local Plan, could stifle
development.
It is feared they will punish small developers by shrouding planning in red tape and restricting profit levels.
However, the policy has been defended by the council's portfolio holder for housing, Geoff Brown, who said it had to strike a balance between
viability and affordability.
Paul Bateman, a planning consultant based in Truro, said: "While it is, of course, commendable to seek a high yield of affordable home delivery, we cannot forget that someone has to pay for it.
"My concern is that the small developers, that are the backbone of the economic
base of the construction industry in Cornwall, will be faced with a disproportionate requirement for, not only
affordable housing, but also
specialist financial viability consultants, on sites that will not produce sufficient profit for them to be willing to invest.
"The restrictions that are being imposed on profit levels is likely to see a significant fall in available suitable land for housing as landowners will simply not release the land for development unless there are beneficial financial rewards."
Last year, 761 affordable homes were built in Cornwall and another 432 developments have planning permission. The draft Cornwall local plan is yet to be granted full approval.
It was introduced to replace the seven regional district and county council plans drawn up more than ten years ago before the creation of the unitary authority.
Under the plan, developers building two or more homes will have to include an affordable housing element of 40% or 50%, unless they can prove it is not financially viable.
In cases when viability is called in to question, the council will assess whether it provides a reasonable rate of return for developers. This is typically set at a 15% profit margin – something some developers think is too low.
Brian Berry, chief executive of the Federation of Master Builders, said: "There is a dying need for more affordable houses, but one of the big problems we have seen in the last two years is the pushing-out of small local housing builders in exchange for larger builders because of the additional costs and requirements on small house builders. Extra conditions on developers such as the provision of affordable housing can make it unviable."
But Mr Brown said there were cases in Cornwall, where small developers have met and surpassed that housing requirement. He said: "I can point to a number of sites, particularly in rural areas, where small developers have produced 50% affordable or even 70% affordable.
"Obviously, in a lot of cases, developers are there to make money, but we have to strike a balance between viability and affordability."
