An ‘underperforming’ town centre car park could be redeveloped to address an acute shortage of affordable housing in Sidmouth.

East Devon District Council (EDDC) is eyeing up the 46 Mill Street bays, where it last year trebled the annual cost of a permit to £1,800.

Only 25 spaces have been leased so EDDC is assessing the feasibility of transforming the site for ‘much-needed accommodation for local families’ – paid for with developer cash from the loss of the Fortfield Hotel.

But business leaders said they opposed any loss of parking in the town and claimed EDDC ‘orchestrated’ the pricing structure to fail.

EDDC leader Paul Diviani said: “We will have access to substantial section 106 funding, so it would seem an ideal opportunity to invest this money in further social housing provision in Sidmouth town itself.

“We will presently be talking to our partners and looking into the feasibility of a new social housing scheme on this site.

“If the housing scheme isn’t feasible, other options will be presented to councillors.”

Sidmouth has long been promised £1.5million in section 106 cash – a levy paid by developers for the loss of an amenity – after flats were built on the site of the fire-hit Fortfield Hotel. Much of it is due to be spent on affordable housing.

EDDC ran a similar scheme to these proposals when it repurposed a ‘dilapidated’ site at Holmdale into 12 shared-ownership flats, none of which has dedicated parking.

Housing champion Cllr Jill Elson said: “Sidmouth is in acute need of more affordable housing for local families.

“The regeneration of this [Mill Street] car park would help towards meeting this need.

“This is an opportunity that cannot be overlooked, particularly as we will have sufficient funding from section 106 contributions with which to execute the works.”

Former Sidmouth Chamber of Commerce chairman Steven Kendall-Torry said: “The chamber is vehemently opposed to any loss of car parking in the town centre when there’s a well-known shortage, documented over the last 40 years.

“Mill Street has been deliberately orchestrated to fail by EDDC so it can erect social housing.”

While a decision is being made, the car parks in Mill Street and Holmdale – where the same payment structure is in place and there are another 12 empty spaces – could be run as pay and display, monitored by a private sector provider using number plate technology.