FT – Cabinet Clash Over Offices to Flats Plan
New freedoms for developers to turn office blocks into flats have received a cautious welcome from business and local government leaders, despite a rearguard action against the proposals from Vince Cable.
The rules, which are likely to be announced later this week, will expire in two years under a compromise secured by the business secretary. He has also carved out other exemptions to the plans so they will not apply to shops, hotels or industrial parks.
Mr Cable’s intervention reflects concern among some businesses and city leaders about the effect of converting office space into residential property. But the proposals, pushed by planning minister Nick Boles, were praised by the Institute of Directors, the business lobby group, as a “sensible” way to tackle Britain’s housing shortage.
“There is a large amount of vacant or unsuitable office space which could be put to better use as housing, giving the construction sector a much-needed boost,” said Edwin Morgan, policy adviser at the IoD. “The government should go even further and allow other types of commercial property, shops and warehouses, to be changed more easily to housing.”
Mike Jones, chairman of the Local Government Association’s environment and housing board, said the measures could be helpful but warned “it should be for councils and residents to decide when and where this relaxing of the rules would be beneficial”.
“It should not just be developers who have a say in plans which will radically change the shape of towns, cities and villages,” he added.
Under the proposals revealed by the Financial Times on Tuesday, councils would be allowed to make an exceptional case that the changes would be bad for employment in their area.
The City of London will win immunity because of its large office district, while two other London councils, Westminster and Kensington & Chelsea, are also likely to try to opt out.
Mr Cable had fought the proposals on the basis that they could damage employment while giving windfalls to property developers.
“There has been a really major battle over this, the issue is very controversial in government as well as outside,” said a senior government official.
The plans have strong backing from George Osborne, chancellor, and David Cameron, prime minister.
One Tory aide said the compromises were due in large part to lobbying by external groups, such as the Federation of Small Businesses and the City of London.
The controversy surrounds the fact that once offices are turned into residential property, which has a higher value, it is very hard to convert them back if demand for office space picks up.
Patrick Michell, a partner from architects Platform 5, predicted a “gold rush” of developers seeking to convert office space. But he said it should be up to local authorities to decide what was appropriate in their area. “They seem to be moving away from localism and towards just wanting big infrastructure whatever the locals think,” he said.
Sir Edward Lister, Boris Johnson’s deputy mayor for planning, said City Hall was “broadly in favour” of a relaxation of change-of-use rules, though not in the City of London or Canary Wharf. “The City hasn’t got the kind of infrastructure for this sort of change and it could damage the City brand.”
Westminster City Council said on Tuesday that it deserved exemptions to prevent the “destruction” of business communities.
“The government is being a little naïve on this issue,” said Robert Davis, deputy leader of Westminster City Council. “In commercial areas like Westminster we are successful largely because of businesses. To allow offices to convert to residential, you are going to lose the heart and centre of business.”
The Royal Borough of Kensington and Chelsea also indicated that it would seek an exemption from the new rules. The borough, which includes some of the most sought-after residential property in Europe, said: “We have a good case for exemption and will be putting evidence forward to support our case,” a spokesman said.”
Property developers said the change of rules would likely to have the effect of bringing developments forwards, particularly on the London market.
Posted on January 23, 2013, in urban planning. Bookmark the permalink. 3 Comments.
I think this departure is interesting (albeit desperate) in so many ways. It’s interesting how it divides “property professionals” – some of whom are able to take a planning perspective, some whom aren’t. The idea that planners plan and ministers take decisions which drive a coach and horses through planning is a hideous precedent. Any way, we’ll see how far it’s allowed to go.
The “resi” bet is one-way for developers in London. I am not sure how you guage whether small and medium scale developers have any mind for commercial tenants any more, but it’s perfectly obvious that “resi” must be a more attractive commercial proposition. Betting on business or the larger economy is a mugs game, not least because it supposes a constructive interest in the productive success of the country. My suspicion is that business space development has become the sole preserve of very large developers.
The housing problem has driven colossal asset appreciation, which has been the spurious backbone of credit expansion since the 70s. The capital expense of buying homes has undermined flexibility – has moved property ownership, both as an aspiration and as financial puzzle, to the top of the agenda. Long ago it wasn’t a key variable – now it is.
The housing shortage and associated housing bubble is already “spatialised” in huge slews of c-o-u across the country. This latest wholesale c-o-u offers a final denaturing of our cities, and an idiotic misunderstanding of the fragile balance implicit in urbanism, which is ill-served by the well-worn narratives about the housing problem
Once one has an overwhelming homeowning polity in one’s constituency, one has lost the political flexibility needed to adjust planning to economic circumstances. Homeowners won’t allow it.
We need a mixed-used fabric whose character is in some way indeterminate, or hybrid, so that planning can tweak its administration of it to changing circumstances. Residential areas thrive on a politically potent narrative that alteration and change happens elsewhere. Yes, this is qualified, but I don’t believe by much.
Converting whole chunks of LONDON – the main regional economy of Northern Europe – over to the political lockdown of residential local politics is a recipe for disabling planning permanently. Only one type of planning is possible – supporting property values.
Quite the opposite should be happening – mixed-use ought to be invading “resi” monocultures as necessary pre-condition for incrementally restoring planning control.
Unfortunately, government attention is swayed by large scale commercial development, particularly in London. Strategic development of new commercial centres is very appealing to the Mayor, local government and central government. It is a form of consolidation – a simplification and rationalisation of the city. It looks green – with its maximisation of public transport efficiencies, and it looks productive – with its offering of corporate jobs from inward-investing corporations.
These large scale developments have become the excuse to turn everything else into housing. Mixed-use fabrics outside the commercial centres (KX, Pad Basin, CW, White City) are fair game for definitive residentialisation.
The problem with consolidation is that it isn’t an economic idea – it’s a proposition about control properly falling to elected governments. However, it’s become a partnership between monopolising large corporations and local governments who no longer believe in their own role supporting small scale business activity. Mixed use – whilst a horribly flabby phrase – is a much better starting point for thinking about a planning regime and urbanism co-terminous with an economic idea offering wide participation, innovations and flexibility.
Consolidation is served by public transport initiatives invariably. These only serve to deepen the irreversibility of the situation as work is centralised and property values are transparently tied to commuting times and options. We are horribly stuck.
It isn’t just London though is it? Secondary office locations are faring badly in many parts of the country and developers will now fall over themselves to convert them to residential without a thought for the infrastructure needed to support them.
And when circumstances change (as they do) where do we site offices then?
Moving away from the large scale office accommodation, how will this change affect rural office space that has historically been considered acceptable as office space but not for residential? Will it not be the case that these offices will be able to change from UC B1 to UC C3 with no resistanced from the LPA? What will happen in National Parks where historically a number of old agricultural buildings have successfully applied for COU to UC B1 – are these now under threat from housing developers?