Whilst i do not agree that private rented developments should be at the expensive of affordable housing, I do not think that the provision of well managed well mantained good quality private rental property is actually that bad an idea.
As Rosa says, if this is well managed and regulated ( could HA's take on a private sector management role? they would then be at least regulated in terms of rent and service standards) then actually there is a need for such development. There is after all a whole section of soctiey that can not afford to buy or are restricted by the deposit requirements nor are eligible for affordable/social housing that would jump at the chance of high quality well managed private rental sector housing, there are many people to who are privately renting in this situation, not by choice but because it is there only option.
Whilst I am no fan of Mr Shapps, it is important to remember he is housing minister, not affordable housing minister and as such has to look out for all housing requirements, as i said not a fan and I have my own opnions on how well ( or not so) he does this.