Is there a £110 billion black hole in Forest City's finances?

No. The £110 billion figure, claimed in Parliament, counts a private developer's markup as a public cost. Forest City homes sell for around £350,000 because the speculative land cost has been removed—not because anyone is paying a subsidy.

The argument runs: a private developer would charge far more per home, therefore each home has a "gap", and someone must pay it. But the gap is not a cost. It's the margin that expensive land and restricted supply currently allow developers to charge. Remove the expensive land and the markup disappears. Nobody pays for something that no longer exists.

The homes are owned and sold by a Community Land Trust. The sale price covers the land, the groundworks, the utility connections and the build, and still returns a profit to the development corporation. On current costings, housing sales alone generate around £13 billion of surplus. A project that returns £13 billion does not have a £110 billion hole in it.