Converting offices into rabbit hutches is a bad idea

Five years ago Eric Pickles made one of the biggest blunders of his term as Secretary of State in charge of housing: he allowed offices to be converted into flats without any need to get planning permission. By classifying such conversions as ‘permitted development,’ Pickles deprived local authorities of any oversight of the process including not only whether the buildings were suitable for residential use, but also of the standards to which they were converted. Furthermore, normal rules applying to new building, like the requirement to provide a proportion of affordable accommodation as part of the deal, were thrown out of the window.

The result was a predictable disaster, and a new report by the RICS provides the evidence to show just how big a disaster it is proving to be. The strength of the report is in the quality of the evidence it provides: the researchers have not only collected the data but have visited converted buildings and documented the outcomes on site, in Camden, Croydon, Leeds, Leicester and Reading. It exposes the flaws in the government’s own impact assessment conducted in 2013.

The researchers find that some of the conversions were done to good standards. But many more are inadequate, and in many cases pretty shocking. Here are some instances of what the RICS found:

  • ‘studio’ flats of just 15 or 16 square metres in floor area (and overall less than one-third of them meeting national space standards)
  • no access to private or communal amenity space
  • buildings with barely any changes done to convert from office to residential use
  • residential developments in the middle of industrial estates
  • 77% of units in the case studies providing ‘studio’ or one bedroom flats, only catering to a very narrow segment of the residential market.

Author comparisons with Glasgow and Rotterdam, where similar conversions would require planning permission, show that much higher quality units could have been produced (and still, presumably, have been economically viable).

These projects affect not only those who buy or rent flats but the wider community, since the developer makes higher profits, pays no planning fees and – most importantly – makes no ‘developer contribution’ to affordable housing in the area. The authors calculate than in the case study areas alone this led to a potential loss of income of £10.8 million and of 1,667 affordable housing units, compared to the position if the same developments had been subject to local policies on providing affordable housing.

It’s not surprising that the office-to-residential scheme is summarised as a ‘fiscal giveaway’ from the state to private real estate interests. It’s left a legacy of poor quality housing that would have been avoided if the projects had needed full permission and the planning system had been properly applied.

None of this is surprising and perhaps from Eric Pickles’ point of view the scheme has still been successful because of the number of units it produced. After all, it was one element in the ripping up of regulations that characterised his period as Secretary of State. This saw a wider erosion of planning powers in general and of section 106 requirements in particular (the bit of legislation that requires developers to provide affordable housing), of which office conversions were only one element.

While there must be wider culpability for the weakening of building regulations that was an important factor in the Grenfell Tower disaster, there is no doubt that the fire was in part an outcome of the general contempt for ‘red tape’ that characterised the coalition government and has yet to be rectified under Theresa May.

Building regulations are now being reviewed via one of the wider inquiries following the fire. Indeed developer contributions, together with the ‘Community Infrastructure Levy’ (which these office conversions also enable developers to avoid), are under separate government review. The risk is that better regulation is restored only for narrow safety reasons, while wider standards relating to space, energy efficiency, wheelchair access and security continue to have gaping loopholes like the ones exposed by the RICS. This exemplary study shows that if developers are allowed to set their own low standards, and a pressured housing market allows the resultant flats to be sold or let, then rabbit hutches will be the result.

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