Hackney Council has come under fire for encouraging a developer to build a huge hostel for temporary housing, rather than permanent homes, which would genuinely help ease the housing crisis.

Nicholas Taylor and Associates claim they were approached by council housing officers stating Hackney was in “dire straits” and the site they own in Kingsland Road, Haggerston, would help meet the borough’s need for temporary accommodation.

Work ceased on a 290-room hotel there eight years ago, and now the owners want to put up an 11-storey building with 292 rooms.

Nick Perry, chair of the Hackney Society conservation group, said: “Fundamentally there’s a concern over policy, and whether it is appropriate to be using vacant land like this to build permanent temporary accommodation. If they are serious about solving the housing crisis, shouldn’t they be building permanent accommodation, because temporary accommodation is substandard accommodation by another name? It’s not suitable for living in for any length of time.

“Planning policy could be changed to allow planers to take into account the need for permanent accommodation, such that we don’t build now and demolish later. There is a risk of that here. In fact I want that to be the outcome here, because I want them to not need quite so much temporary accommodation.”

The hostel would be council-run in conjunction with the 115-room Metropolitan and 42-room St Peter’s Way hostels next door. Neighbours are worried the density of temporary accommodation is unprecedented in London and would create a “super hostel” housing nearly 1,000 residents, exacerbating existing anti-social behaviour.

But the applicant states this would be unlikely, because the new hostel is primarily looking to house single mothers with children rather than alcoholics and drug users.

“The likelihood of anti-social behaviour is minimal from these households given their precarious status while in emergency accommodation, any such behaviour could affect the outcome of the council’s decision whether to accommodate in the longer term and will lead to eviction from the hostel,” they state. “While the council has taken steps to move on from temporary accommodation, the reality is that demand will continue to exceed supply.”

Hackney Mayor Phil Glanville said: “It would take more than a decade to rehouse the 13,000 families on our housing waiting list even if nobody else applied, and it is a sad symbol of our nationally-driven housing crisis that temporary accommodation such as hostels are needed to allow local families to stay in Hackney while they await a long-term place to call home.

“The proposals for a new hostel have been submitted separately by a private developer and, like any other planning application, will be independently assessed in accordance with the council’s planning policy.”