Govt faces calls to end office conversion free-for-all

The property industry and local government are – for once – falling into line in a battle to stop misguided government proposals to continue the office to residential conversion planning bypass that has been trialled over the last months.

Indications are that the trial policy is already leading to a shortage of budget office accommodation. Increasing numbers of businesses are being evicted, as landlords spot an opportunity to convert second hand office blocks into more profitable apartments, without the need for planning permission.

Already the policy is threatening to develop new residential districts in urban centres, with nowhere for employers to house themselves. From Westminster to Croydon, new ghettos of flats are in danger of being developed, while businesses are forced to relocate further away from those centres – just the sort of thing that planning policies were supposed to prevent.

“We are one year into a three year experiment, and the government seems to be prejudging the outcome,” noted officer Paul Beckett of the Corporation of London, speaking at a recent planning meeting. The proposal to make the idea permanent has come in newly circulated proposals. While some authorities have successfully argued for an exemption from the current trial, there are fears such exemptions would not be allowed if the rules are permanently changed.

London mayor Boris Johnson has joined London First, the British Property Federation and the Planning Officers Society London are among those calling for greater protection of business zones, and have sent an open letter to communities secretary Eric Pickles.

“Affordable workspace is just as  important as affordable housing in creating a sustainable, balanced economy,” noted Nicky Gavron of the London Assembly.

Typical of those now being hit by the policy experiment are office tenants in central Croydon. A number have been given notice to quit, as their landlords will profit from turning their blocks into flats. But the opportunity to relocate locally is evaporating, due to the substantial volume of secondhand office space being lost to residential conversions; while new office space is substantially more expensive. There are also quality concerns about the new homes being delivered. As developers no longer need to seek planning permission, local planning officers cannot push them to build to higher than the most basic standards.

Here is a policy that was introduced in the name of simplifying planning, and encouraging regeneration and the production of new housing. If the government fails to listen, and continues with its experiment, our cities will be left with insufficient business space, and companies will be pushed into paying more for offices, as only new space at higher rents will be available.

Paying higher rents means less money to expand or pay new staff – and a stifled economic recovery.

And if they are serious about encouraging the production of more homes, what is really needed is planning reform that allows more homes to be built, on more new land. And no more Help to Buy subsidies.

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Councils toughen stance over affordable housing levy

Local authorities in London appear to be toughening their stance over affordable housing contributions. The City Corporation is at odds with luxury apartment developers the Candys, while a recent appeal decision in Chelsea backed the borough, and turned down a redevelopment over its promoters’ unwillingness to pay up.

In the City, it is at Sugar Quay that the corporation and the Candy brothers are at loggerheads. The empty office block is on the river, close to the Tower of London and with great views of Tower Bridge. In March 2013, the applicants secured permission to redevelop the site with a 165 apartment scheme designed by Foster + Partners. With the permission came a requirement to pay £15 million as an affordable housing contribution; understandably, the developers did not want to provide affordable housing on site as part of their new scheme.

The developers now insist they cannot afford the £15 million – that, they say, would render the project unviable. Instead, they have offered half the amount, and have backed up their plea with valuation figures. These calculations, however, run somewhat differently to those calculated by a valuation expert hired by the City Corporation, who insists the full £15 million can be afforded. [After all, that’s only £91,000 per new flat created, by our reckoning.]

The upcoming City planning committee has been asked to confirm the corporation will push for the full amount, or failing that, get an independent valuation of the project in a bid to arbitrate between the two parties. A decision on this action will come at the committee meeting on Thursday 17 July – follow Twitter @planningcity for updates as they happen.

The City’s stance echoes that of a hard line taken by the Royal Borough of Kensington & Chelsea, where a redevelopment proposed for the King’s Road cinema has been dismissed over the issue of affordable housing contributions. Here, developer Ilona House Securities planned a redevelopment with new cinema, retail and 11 flats, triggering a requirement for an affordable housing contribution of £1 million. In response, the developer insisted it could only afford £200,000 as, once again, its valuer delivered a development appraisal that added up to something markedly different from that provided by the council’s valuer. The issue went to appeal, and the inspector has sided with the council.

The inspector’s summary concluded:  “There remains an identified surplus of over £1 million, which could contribute toward the provision of affordable housing in the borough. I regard this figure as more indicative of the maximum reasonable amount.”

The victory for the Royal Borough of Kensington & Chelsea was a sweet vindication of its hard line policy. Councillor Timothy Coleridge, cabinet member for planning policy, commented: “This decision supports the Council’s rigorous approach. Developers should be clear that we will leave no stone unturned to make sure we get as much affordable housing as we can as part of new developments.”

Other planning authorities are taking a more imaginative approach. Recently, planners at Wandsworth negotiated with housebuilder Bellway that they would deliver not only affordable housing, but private rented homes too – restricted to rental by local people – as part of a larger residential development at Nine Elms – details here.


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Pickles dismisses Henderson’s Smithfield plans – what next?

Communities secretary Eric Pickles has backed the opinion of a public inquiry planning inspector, and voted not to allow a redevelopment of the eastern Smithfield market buildings, proposed by Henderson Global Investors.

The decision, which is a fillip for campaigners SAVE Britain’s Heritage and the Victorian Society, means the redevelopment cannot now go ahead. A design by architect John McAslan for Henderson would have retained the frontages of the market buildings, but delivered an office-led redevelopment with substantial new structures behind those facades.

There’s lots to consume in the decision letter, but a quick couple of nuggets. Of the redevelopment proposals, the secretary of state says “the proposed works would have an extremely harmful effect on the significance of the General Market as an important non-designated heritage asset”.

And there is criticism of the landlord, the Corporation of London, for their failure to look after the buildings in the many years that planning battles have been fought over this site:  “The deteriorated state of the buildings is, at least in part, the result of the history of deliberate neglect”.

Interestingly, the alternative proposals for the site, to reuse more of the fabric, appear to have been given implicit approval – though no details have been provided of these, and no planning application has been submitted. The decision letter gives nods of approval to the work submitted by developer Cathedral Group, which helped the campaigners work up some elements of the alternative plans to more effectively reuse the existing buildings.

Cathedral Group has recently been merged with listed developer Development Securities – will the combined group have the might – and more importantly the will – to take on this poisoned chalice of a site? Or will Henderson try again, with a fresh design that reuses more of the existing heritage blocks standing on the site?

The decision letter – it is rather long – is available in full here.

And more images of what could have been are here.

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Islington cooks up new absent landlord tax – and gets overruled by mayor

The London borough of Islington has had its own planning decisions overruled by London mayor Boris Johnson, just as it declared war on investor landlords with the threat of an empty flat tax.

Johnson has approved two residential skyscrapers in the borough, overturning a refusal by borough planners, who had declared the 42 and 36 storey blocks counter to their tall buildings policy.

The Berkeley Homes project, City Forum, will include 995 homes, of which 30% will be affordable, alongside a hotel and office space.

“London is enjoying an unprecedented population boom and by 2030 will become the first city in Europe to be home to ten million people,” said mayor Johnson. “Building new homes and creating more jobs is absolutely crucial so that we can ensure this growth is sustainable.”

Yet the decision overruling Islington’s own planning committee will undoubtedly fuel the borough’s discomfort over the number of expensive apartments being built in its patch, yet which are being bought by foreign investors. The council has laid out plans to end “buy-to-leave” purchases, which mean new build apartments in Islington stand empty. It says up to half the new homes recently built in the EC1 postal district have nobody listed as residents on the electoral register.

“In Islington we desperately need more affordable housing, and every new home should help meet our housing shortage,” said councillor James Murray. “We cannot stand by as new homes sit there as empty, purely as investments, and so we are setting out our plans to end this.”

“In Islington, as across London, it’s harder and harder for people to find somewhere they can afford to live. At the same time, expensive new housing is being built, often sold off-plan overseas, and then left to stand empty.

“It’s galling for Londoners to see homes being sold overseas before they’re even built – and it’s outrageous for new homes to then stand empty in the middle of a housing crisis.”

A consultation is taking place on the proposals, which would introduce a punitive tax on properties deliberately held empty. The charge could be as high as £60,000 a year. Already plenty of ways around such a punitive charge are being thought up; and canny investors are probably looking at other boroughs instead, rather than Islington. Berkeley Homes will presumably be awaiting the result of the consultation, before they start building!

Details of the consultation can be found here.

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Bigger opportunities as Pocket widens its base

Innovative apartment developer Pocket Living has secured permission for two more of its below-market-value homes. An 18 flat scheme will go ahead in Wynne Road, Lambeth, as will a 25 unit project in Willingham Terrace, Camden.

The company builds apartments for sale, albeit only to a restricted list of people with local links and provable incomes. The rules allow typical working Londoners, otherwise priced out of buying in London, an opportunity to buy their own home, which they can make their own; resales can only be made to the same, restricted list of approved purchasers.

Pocket’s founder, Marc Vlessing, is progressing plans to have the company’s projects approved as affordable housing, under the rules governing local authority planning gain. Many London boroughs insist on an affordable housing contribution as part of a planning permission, either as flats built for passing to a housing association, or as a cash payment in lieu. Vlessing has argued his homes also provide “affordable” housing, and actually serve the “squeezed middle”, hard working singles and couples who don’t qualify to get onto local authority or housing association shortlists.

Further approvals are likely to follow, as the company has applied for permission to develop eight further sites across Hammersmith & Fulham, Ealing, Lewisham, Hackney, Lambeth and Camden. The company received a substantial endorsement last autumn, when mayor Boris Johnson backed the Pocket plan with a £21.7 million loan.

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Professorship for Peter Rees

Peter Rees, the City Corporation’s chief planner for 29 years, is heading to the Bartlett at University College London, where he is to become professor of places and city planning. The post is for three years, with his former employer the Corporation of London sponsoring the post for its first year.

Rees originally studied architecture at the Bartlett, and commented: “I am delighted to be returning after almost three decades at the City. My professorship will enable me to continue my love affair with London and my involvement in the capital’s evolution. The Square Mile will always be a special place for me and I have enjoyed having a hand in its transformation since 1985.  Having played in the premier league for one of the world’s most successful cities I am thrilled to be joining the team at one of the world’s finest universities. My time as City planning officer has demonstrated what can be achieved when you are in the right place, at the right time with the right team.  None of it would have been possible without the skilled and dedicated colleagues in whose safe hands I leave the regeneration of the City.”

And leading that team will now be Annie Hampson, the new chief planning officer and development director. Hampson has for the last several years has been planning director at the corporation. She regularly appears alongside Rees at planning committee meetings, often being his “phone a friend” who provides technical answers to some of the more difficult questions from committee members.

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Planners call on politicians to streamline planning system

UK planners have called on all political parties to sharpen up the British planning system, whoever wins the next election. More red tape needs to be cut, developers need to understand their responsibility to deliver great places, and tests applied to new projects need to be simplified, in order to help promote a brighter Britain.

The changes are needed, whichever party claims power at the next election, says the Planning Officers Society. It has launched a manifesto to encourage debate. “The next government has the opportunity to create a real legacy for future generations,” it claims.

Any system needs to ensure the nation’s needs are met, say the planners. That means better housing supply, as volume is not being delivered – “there are features of the current system that need refinement”, they acknowledge.

The planners’ white paper “does not call for a raft of further changes, but rather a series of targeted refinements.”

Development plans are failing because of an overbearing level of scrutiny. A simpler process that touches on fundamentals at the early stages will speed up the process, reducing the role of the current Duty to Cooperate. Instead, a more logical process is needed.

While there has been progress in reducing the quantity of policies and pages explaining them, there is more to go, say the planners. It notes the Red Tape Challenge which has identified the opportunity to cut statutory instruments by 57%, and says this approach now needs to be applied to planning statutes, where 45 acts await amalgamation and simplification.

The planners also call for full local recovery of planning costs, with fees set locally at a suitable level. Currently just 60% of costs are covered by planning fees. This is an issue already being discussed in London, where developers are actually asking to pay more, in order to receive a better service than they currently receive.

More on the planning officers’ proposals here. Will any political party have the sense to listen?

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