Olympic planners have been warned that they risk "a betrayal" of the east London communities if they do not guarantee local people homes in the regenerated Olympic site.
More than 11,000 new properties will be built on the site of the Olympic Park in the next 20 years but despite assurances that more than a third would be allocated to "affordable housing" there are fears that recent changes to social housing policy will mean that the majority of local people will be frozen out by the high cost.
Baroness Doocey, the Liberal Democrat peer who chaired the London Assembly's Olympics scrutiny panel, said that denying local people "their fair share" of the new homes would "negate the promise that was made when we won the Olympics seven years ago".
Five new neighbourhoods are promised across 558 acres in the London boroughs of Hackney, Tower Hamlets and Newham. The first set of properties, converted from the flats in the Athletes' Village, will go on sale in little over a year's time. Homes in the first of the five neighbourhoods, Chobham Manor, in the north of the park, will be ready in late 2014.
Despite assurances that thousands of homes would be allocated to social housing, changes to housing policy introduced by the Coalition Government last year mean that subsidised properties can be rented at up to 80 per cent of market rates.
The housing charity Shelter calculates that the median monthly rent for a two-bedroom home in Newham is £953. This means that a two-bedroom property in the new development could be classified as "affordable" if it was advertised to let at £762 a month – beyond the reach of many locals.
"The key thing is that word 'affordable'," said Keith Fernett, a housing expert and director of Anchor House, a homeless skills centre in Newham. "Traditionally 'affordable' meant homes for working-class, low-income people. It has been redefined and now it means affordable for graduates and young professionals. Affordable now means earning £30,000 or more, which is beyond most of the people in the borough. There are 32,000 people on the social housing waiting list here and we don't expect the Olympic Park to make a dent in that."
House prices in the Olympic boroughs are under pressure because of an influx of foreign buyers driving up house prices in central London, which has led to a "tsunami" of buyers and renters driven to the city's outer boroughs, Mr Fernett said.
For local people to be able to benefit, the Government will have to offer subsidies, Lady Doocey said.
The Olympic development, which will be renamed the Queen Elizabeth Olympic Park after the Games, will be funded by private investors. The first new development, to be called East Village, made up of 2,818 apartments converted from the Athletes' Village, will open in autumn next year; 1,379 affordable homes will be managed by Triathlon Homes while the property branch of Qatar's sovereign wealth fund and the investment group Delancey will own the remaining properties.
"Private developers will be fighting each other for a piece of the action," said Lady Doocey. "But if we're not careful and if there isn't public money put into it, the private companies will be calling the tune on affordable housing."
Daniel Moylan, chairman of the London Legacy Development Corporation, responsible for planning for after the Games, pledged that the new neighbourhoods would "stitch together the surrounding communities of a formerly isolated area through new homes, schools, shops, parks, infrastructure and jobs."
Park homes are not 'affordable'
Anchor House, in Newham, provides support and shelter to those caught in the borough's housing crisis. Lorna Smith, 36, a part-time healthcare assistant, has been on the waiting list for social housing since 2005.
I don't see how I will benefit from the Olympics, in any way. You would need a well-paid job to afford the rent on one of the social housing places in the new development, and I will find it hard to work again.
Hassan Adani, 48, worked as a street cleaner for 20 years, before a spinal condition left him unable to work.
What I'd like to say to the council and to the Olympic planners is: spend a day in our shoes. Spend a night sleeping in a homeless hostel with doors banging throughout the night and your priorities will change. To say the houses available in the Olympic Park will be "affordable" sounds ridiculous. Add up costs of food, bills, transport, TV licence and what's left for rent? Not much.