The supermarket giant wants to develop a mixed-use scheme in Streatham, south London, which will include social housing under a planning gain agreement.
It wants to reserve 13 of the site's 102 homes for its own staff and believes Lambeth council should consider those units "affordable housing" for the purpose of planning gain negotiations.
If Lambeth accepts Tesco's argument, the development's affordable housing component would rise from 35% to 40%.
The flats would be managed by a registered social landlord, which would be free to allocate the homes if Tesco were to waive its right to reserve the homes for employees.
But the proposal has caused consternation among some councillors. Keith Fitchett, cabinet member for housing, said he could not see why Tesco staff should be favoured over the 20,000 people on Lambeth's waiting list.
"I'm quite surprised by what has been proposed, but I don't expect the planning committee to agree to the plans," he said.
Planners have given the council's planning application committee a preliminary recommendation to accept Tesco's proposal, despite the fact that the scheme falls short of the Greater London Authority's target of 50% affordable housing. Their report said the 13 flats "would provide the possibility of affordable housing for people on low incomes".
Once the proposal has been considered by the planning applications committee, which is next due to sit at the end of this month, Tesco will still have to win approval from the council's executive committee.
London mayor Ken Livingstone is also likely to consider the proposal before planning permission can be granted.
Livingstone refused permission for the development in March 2003 because it would result in the demolition of the Streatham Leisure Centre – a "strategically important sports facility". No decision has yet been reached on the future of the centre.
Source
Housing Today
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