The Oxford City Council policy could force universities to pay millions towards social housing when they build homes for students.
Oxford University’s Merton College and McLaren Property have lodged a joint legal challenge against the plan in the High Court.
The issue stems from the city council Sites and Housing Plan, which gained approval from a government inspector at the start of the year. The plan sets out where homes should be built in the city during the next 13 years.
Several Oxford colleges complained about the plan, saying the proposed charges were “an unauthorised housing tax”. They fear the payments would halt the development of student accommodation.
The legal challenge is focused on the Manor Place development, where Merton College wants to build housing for 298 students.
The college claims is now unviable because the council charge would add £140 per square metre, plus an administration charge of 5% to the cost. The levy would increase the development cost by around £1 million.
Merton and McLaren will also challenge the part of the plan which specifies that self-contained student flats should be classed as residential accommodation, not student accommodation.
Such properties are usually built for post-graduates. This would mean affordable housing for the city would have to be provided when building such properties.
In a joint statement, the college and developer said the legal system is their only possible method of challenging the proposed policy. The council plans will have a wider implication on other developments in the city, they added.
A Merton spokesman added that the college thinks the inspector incorrectly addressed several issues, and Stuart Black of McLaren pointed out that the plan would “stop dead” purpose-built student accommodation developments in Oxford.
Chris Lee, a spokesman for the city council, said it would defend the adoption of the policies as “fair and appropriate”.
