Councillors have been urged to force a developer to include cheaper housing in a 320-home estate on the edge of Sheffield.
Commercial Estates Group has planning permission to build on the site of the former Oughtibridge Mill. But the firm applied in December to remove a condition requiring 10 per cent of the floor space of the new development to be 'affordable’.
The firm argued that it should be given 'vacant building credit’, or VBC - a national policy that gives financial incentive to developers who replace an empty building with a new one.
Council planning officers disagreed, and have recommended the application be refused. Councillors will vote on the application at a meeting on Tuesday.
A report to members of the planning committee said the Government introduced VBC to encourage development of old industrial sites - but in this case no incentive was needed.
The report adds: "Officers consider that the development of Oughtibridge Mill is not one where a VBC should be applicable, since the site had already come forward for re-development without any financial incentive through VBC.
"It is the view of officers, therefore, that this application for VBC does not accord with the intention of the Government policy on such, and therefore the policy should not apply in this instance."
Steve McBurney from Commercial Estates Group said: “The vacant building credit policy was brought in by the Government on the May 19, 2016 to incentivise brownfield development, which is far more risky and expensive to deliver due to site clearance, ground decontamination and infrastructure delivery costs.
"As Oughtibridge Mill is an important brownfield site with large existing industrial buildings, vacant building credit is clearly applicable, a point that we have consistently made to the council since June 2, 2016."
Officers said it was 'at clear odds' with national policy for Commercial Estates Group to try to benefit from VBC having already submitted plans that included affordable housing provision, adding: "No effort has ever been made to demonstrate viability issues."
The approved application for Oughtibridge Mill is an outline plan, meaning a more detailed reserved matters application must be approved by councillors before work can begin.
The South Yorkshire branch of the Campaign to Protect Rural England fought the original application, calling the development 'unsustainable'.
But branch planning officer Andrew Wood did praise the council for holding the developer to the affordable housing commitment.
Oughtibridge Mill closed for good in 2014.
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