“Hundreds of planned new sheltered accommodation units have been delayed or scrapped owing to proposed cuts to housing benefit, the BBC has learned.
Several housing associations have said they are no longer financially viable.
The flats, for the elderly or people with learning disabilities, are more expensive to build and run because they provide additional support.
Ministers say they are reviewing the sheltered housing sector “to ensure it works in the best way possible”.
The National Housing Federation (NHF) has calculated that nearly 2,500 units have so far been scrapped or delayed as sheltered housing providers face losing an average of £68 a week per tenant.
David Orr, chief executive of the NHF, told the BBC: “There is real impact now.
“New homes for people with support needs – vulnerable people – that would be being built have been cancelled.”
BBC News has spoken to four housing associations who confirmed their plans had needed to change:
Southdown Housing in East Sussex scrapped plans for 18 units for people with learning disabilities
Knightstone Housing in Somerset has delayed a complex of 65 homes for the elderly and 13 properties for learning-disabled people
In Manchester, Contour Homes has had to put on hold a scheme to build 36 units for the elderly
In North Yorkshire, Harrogate Neighbours has delayed construction of 55 extra care flats
The changes – announced in Chancellor George Osborne’s Autumn Statement – will bring housing benefit rates for social housing in line with the sums paid to landlords in the private sector.
Mr Osborne said the move, which will affect England, Scotland and Wales, would deliver savings of £225m by 2020-21, and is part of a £12bn package of cuts from the welfare bill.
The cap includes sheltered housing, which is more expensive to provide due to the additional support on offer – anything from canteens to round-the-clock care staff.
The benefit will not actually be cut until April 2018 but it will affect people signing new tenancies from this April.
‘We couldn’t just absorb that’
At one sheltered housing complex in Harrogate, the need for new development is clear – there is only one lift and the corridors are narrow.
“We need to move,” said resident Frank Forkes. “It’s very cramped. If the lift breaks down, it’s chaos because you’ve people upstairs in wheelchairs.”
The housing association has spent eight years developing plans for a new complex a couple of miles away.
But following the government’s announcement in November, the board of Harrogate Neighbours delayed the scheme. Under the new rules, they will lose £100,000 per annum on it.
“As an organisation we have to be absolutely certain that we can afford to deliver all the services. And at the moment, it’s not viable,” chief executive Sue Cawthray said.
The consequences of the benefit cuts are even worse for Contour Homes in Manchester.
“We stand to lose – over the course of the 40-year life cycle of the development – if things stay as they are, £3.35m. As an organisation, we couldn’t just absorb that,” director of customer services Chris Langan said.
Labour described the housing benefit cut as a “catastrophe for those who can least afford it”.
But a spokesman for the Department for Work and Pensions said: “We’ve always been clear that we value the work the supported accommodation sector does to protect the most vulnerable members of society.
“That’s why we are carrying out a thorough review, working with the sector, to ensure that it works in the best way possible – which is what the NHF has asked for.
“We are also providing councils with £870m of Discretionary Housing Payments which can be paid to people in supported accommodation.”
East Devon Watch 