Three London councils have launched a High Court challenge against plans by the Mayor of London, Sadiq Khan, to reduce the affordable housing threshold in planning applications from 35% to 20%.

The legal action has been brought by London Borough of Tower Hamlets, London Borough of Hackney and London Borough of Lewisham, with formal backing from four other London boroughs: London Borough of Lambeth, London Borough of Southwark, London Borough of Waltham Forest and London Borough of Haringey.

Court documents submitted as part of the judicial review claim argue that reducing the affordable housing requirement would hamper councils’ ability to deliver new affordable homes at a time of acute housing need across the capital.

The councils contend that the Mayor’s proposed change has been introduced without following the statutory process required to amend the London Plan. They also argue that there was insufficient consultation and a lack of evidence to support a blanket reduction in affordable housing requirements across all London boroughs.

The challenge comes against a backdrop of growing pressure on London’s housing system. Housing waiting lists are at their highest level for a decade, while homelessness and the use of temporary accommodation continue to rise. The boroughs argue that reducing affordable housing delivery risks exacerbating existing shortages and placing further strain on households struggling to access suitable housing.

Lutfur Rahman, executive mayor of Tower Hamlets, said: “It is a scandal to cut the affordable housing quota when the need for genuinely affordable homes has never been greater. Our city is increasingly being turned into an investment asset for the super rich rather than a place where ordinary Londoners can afford to live, work and raise a family.

“City Hall claims this policy will incentivise developers to build homes more quickly. But homes for whom? If ordinary Londoners can’t afford them, they will simply sit empty. Far from accelerating housebuilding, the policy is already slowing it down, with some developers delaying schemes until the quota is cut to 20%.

“London is becoming a tale of two cities, with luxury apartments bought up by overseas investors and left empty, while families languish on housing waiting lists, and 1 in 20 children in our city homeless and more than one million Londoners trapped in overcrowded housing or homes unfit for human habitation because of damp, mould or pests.

“With seven councils backing this legal action, we are demonstrating the devastating impact this policy would have across London. We remain ready to engage constructively with the Mayor of London and the Greater London Authority, but we cannot stand by while thousands more Londoners are pushed out of their communities and plunged into poverty and homelessness.”

Zoë Garbett, executive mayor of Hackney, commented: “As mayor of Hackney, my goal is simple: a Hackney our communities can afford to stay in. But with 40% of residents living in deprivation – and local families facing some of the longest waiting times for social housing – we urgently need more affordable social homes. To do that, we must ensure developers build genuinely affordable housing, and take action against those that don’t.

“Instead we have a Mayor of London doing the opposite – slashing targets, undermining the progress Hackney residents desperately need, and letting developers off the hook.

“The Mayor of London is no longer surrounded by councils willing to sign off any developer-driven decision he wants to make. Hackney now has a Mayor who will go to bat for affordable housing.”

Liam Shrivastava, executive mayor of Lewisham, added: “London is in an unprecedented housing crisis, and private developers have a duty to play a role in supporting our city. It would be totally wrong to allow their profit to go unchecked while thousands of people are on councils’ housing waiting lists.

“Developers should build as many affordable homes as possible; letting them get away with delivering less will have devastating consequences right across the city, pushing ordinary Londoners out.

“While we understand the challenge the Mayor of London faces in terms of a stalled house building market and a developer-led model that is broken, he has provided no justification for these changes, which will undoubtedly reduce the number of affordable homes built in London.

“In Lewisham, we’re not anti-development – far from it; we want to work with responsible developers, that are respectful of our communities and make a positive difference. To do that, we need the planning system to support the delivery of more, not less, of the affordable homes our communities need.”