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DEVELOPERS are turning a city centre building into student flats after a residential scheme was turned down.

Cantay House, the former conference centre in Park End Street, will become 45 flats for students at Corpus Christi College.

Owner Cantay Investments Ltd had wanted to convert the building into nine residential flats.

But Oxford City Council threw the scheme out over the summer, amid claims the number of flats had been kept deliberately low to avoid having to pay a contribution towards affordable housing.

Tony Nolan, of Cantay Investments, said: “We didn’t appeal the decision because on balance we didn’t want to hang around and wait.

“The city council had a chance to approve our plan for residential housing but it was refused and the student housing was approved.”

“When we designed the scheme we felt we wanted to develop high-quality housing in the city centre.

“If you are going to be taxed for exceeding a threshold then you are going to be less inclined to go above that threshold.

“We submitted a viability report suggesting the contribution could not be afforded so we declined to make an offer.”

Council policy dictates that schemes of 10 properties or more are required to make 50 per cent of units available as social housing.

Developments of four to nine units have to make a financial contribution towards affordable housing – 15 per cent of the sale value of the units.

Student flat developments are exempt from the regulations.

Cantay House was built as a coal merchant’s warehouse in 1901 but was converted into a conference centre and office block in 2007.

The conference centre closed in January because it was losing money.

The plans to turn Cantay House into nine two-bedroom flats were rejected by the city council’s west area planning committee in August.

Work is now under way on the conversion after planning permission was given in January.

The council’s executive member for city development Colin Cook said: “If we see that a site can take 10 units we can refuse planning permission, which we did.

“We are wise to that nonsense, which is why they are probably not appealing.

“Both student housing and residential housing is needed and if we provide housing for students it will free up housing for families.”