Could disused office units be the solution the the ever increasing housing crisis? We take a look at two perspectives, one from Rosa Silverman of The Telegraph who suggests it may solve a lot of problems, and the other from Robert Richardson of the International Public Policy Observatory who states there would be issues with the concept.
Rosa Silverman - The Telegraph
In the newly fitted-out Station House apartment block, resident Sania Mushtaq has everything close at hand. There’s a 24-hour gym and shared workspace downstairs, free-of-charge for tenants. Metres away is an Aldi supermarket in a retail park. Directly below the apartments is Milton Keynes railway station, putting Mushtaq half an hour from the centre of London.
“I live one second from the station,” says the 23-year-old medical student. “I have quite a nice one-bed with everything I need. I’m a city girl, so for me just having everything around, all the shopping malls, is nice.”
Unlike some developments, this new housing is not cut off from amenities. Nor has it involved that unpopular practice of concreting over the countryside.
There’s a reason for this: although Mushtaq didn’t realise it when she moved in, until recently Station House was an office block, with tenants including Santander bank and the Canal & River Trust.
Would you guess its recent history, to look at it now? From the outside, probably yes. Its 1980s modernist exterior, with a stark facade of mirrored glass, still looks the same; which is to say, like offices. But the problem with offices in 2024 is that fewer people work in them. Meanwhile, we have a national housing shortage: around 340,000 new homes are needed in England each year, according to one estimate. A seemingly neat solution – increasingly adopted by developers – is to convert underused offices into flats.
Permitted Development Rights (PDR) introduced in 2013 have made this change of use much easier. Under PDR, the normal planning application process can be bypassed, provided the building’s exterior isn’t altered.
Initially, not everyone thought transforming Station House into homes was a wise idea. These “poky” flats would be sited above an “exceptionally busy and noisy railway station,” objected Pete Marland, the Labour council leader.
Mushtaq prefers the word “cosy” to describe her lodgings. And inside the 200 airy and well-insulated new flats, it is in fact surprisingly quiet. Although the windows overlook the busy concourse outside the station on one side, and the railway lines on the other, you wouldn’t know it from the sound. Cars, buses and trains glide around beneath like so many toy vehicles, small and noiseless.
The interiors are modern but homely, with gleaming bathrooms and kitchens, shining tiles and white walls. The deliberately unfinished concrete pillars and ceiling beams give the flats a semi-industrial vibe, hinting that the space might have had another use earlier in life; the equivalent, perhaps, of those exposed brick walls in stylish warehouse conversions.
Family homes with outdoor space for children these are not (though there are a few families living in the two-beds). But for childless singletons and couples, there are clearly worse places to rent. Mushtaq pays £1,175 a month for her flat, while friends in London pay almost twice as much.
A planning application for the conversion was first submitted in 2018 and rejected. When the developer appealed, under PDR, the project was given the green light. Work began in 2020 and was completed last year. Most of the flats are now occupied.
“When we [first] went there, it looked like a dated office building with an office plan and columns, and we thought: what do we do with it?” says Sebastiano Scapolan, whose architecture firm Scapolan Burney carried out the conversion. “We took the client around and explained to him that the building already had all the ingredients to be unique, there was no need to add, just to work with what you have from the start because you have elements here that will not be achievable on any new-build residential scheme in the country.”
Hence the enduring presence of those concrete columns, which the architects suggested the design should “celebrate”. Arguably, there is plenty more to celebrate about these kinds of conversions. The carbon cost of turning an existing commercial building into homes is appreciably smaller than razing it to the ground and building from scratch.
“Any sort of demolition is a big no-no [carbon-wise],” says Robin Callister, a senior architect at Urbanist Architecture, which has dealt with a number of clients seeking to do such conversions.
The price tag is also smaller. The approximate cost of the Station House conversion was £16.6 million. Rebuilding from scratch would have cost at least double that, Scapolan estimates.
Preserving architectural heritage is a third bonus, when exteriors are left intact. And avoiding encroaching on green belt land is a given with such projects.
“It solves two problems,” says Callister. “What do you do with empty office spaces when everyone works from a laptop, not an office now … and [it] ticks the box for the housing shortage, because a lot of these buildings are quite well-suited to flatted developments.”
It’s also a faster way to create new homes. “The decision process with PDR is normally eight weeks,” says Scapolan. “A full planning application usually requires an extensive pre-application process and once submitted, despite a 12-week target for the decision, it usually takes several months, and in many cases can be years if the site is in a sensitive location. This doesn’t benefit anyone and simply pushes prices up.”
The time to complete the project is shorter too; and, unlike when building from scratch, the timetable is “not affected by weather or time of year,” says Callister. “That makes a big difference.”
Infrastructure-wise, office locations will often already be well provided for by transport connections (though not necessarily by doctors’ surgeries).
Not every commercial building will be suitable for residential use. Creating new homes in former commercial spaces using PDR can have pitfalls, planners and architects warn. Last year, the Town and Country Planning Association published a photobook of bleak-looking former commercial properties called These are Homes, to “capture some of the realities of ‘homes’ created through Permitted Development Rights”.
Many lacked adequate space, security and fire safety, proper ventilation, natural light, access to green space and amenities. One block sat on the edge of the North Circular, a busy, exhaust-choked carriageway in London. Another was sited on an industrial estate in north London, surrounded on all sides by car parks and immediately facing a large warehouse and logistics hub. The book highlighted the adverse effects such poor housing can have on health and wellbeing.
“Converting offices into homes could be great – an effective way of using under-utilised office space and creating more homes,” says Dr Daniel Slade, policy manager at the Royal Town Planning Institute. “The key problem is that doing it under permitted development removes a lot of important safeguards and checks that result in good quality homes.”
A normal planning application is assessed by a planning committee that takes into account a range of considerations. “For instance, are the proposed homes in the middle of an industrial estate? With permitted development, there isn’t an effective mechanism for doing that,” says Dr Slade. “That’s resulted in thousands of new homes in the middle of industrial estates.”
Only in 2020 did it become a requirement for all homes created under PDR to have natural light in all habitable rooms. In 2021, new minimum space standards were introduced. The idea of both new rules was to prevent the nightmare of windowless shoeboxes being rented or sold as “residential”.
But when done right, might the conversion of underused office space breathe new life into hollowed-out city centres? For Dr Slade, this is possible as long as planners have weighed up the appropriateness of the development. He agrees we should be aiming for mixed-use urban centres. The question is how it’s done.
“Problems occur when you don’t take a place-making approach,” he says. “And when there are no jobs for the people [who will be living in] those homes. The key thing is there being a sensible decision made by people who have all the data in front of them, rather than this happening in a really ad hoc way.”
One upside for developers may also be a downside for others: under PDR, they have no Section 106 obligations – also known as developer contributions – to mitigate the impact of the development on the local community. These may include financial contributions to infrastructure and services.
Likewise, there is no requirement for a portion of the homes to be affordable when converting offices like this. The Local Government Association warned in 2022 that more than 18,000 affordable houses had been “lost” as a result.
Others might argue that some homes are better than no homes, and that with so many plans for new-build developments coming up against nimbyism, converting existing buildings sidesteps a range of obstacles and objections. It’s also true that in a small country, where space is at a premium, we can ill afford to walk away from buildings that have served their purpose.
The idea that we should find fresh uses for them isn’t new. In the late 20th century, warehouses from our industrial past were refashioned into modern homes, with the London Docklands Development Corporation leading the way in the early 1980s. Now, the commercial real estate that crept across our landscape in the 20th century is following a similar trajectory. When it’s done well, it undoubtedly has its benefits.
“When there’s a housing shortage,” says Callister, “the last thing you want is empty buildings.”
Robert Richardson - International Public Policy Observatory
The UK government is proposing to further relax planning rules as part of its long-term plan for housing. The Department for Levelling Up, Housing and Communities aims to extend what are known as “permitted development rights” (PDR) in England. This would widen a previous relaxation of planning rules to encourage developers and builders to convert empty commercial spaces into housing.
It is being seen as a response to multiple councils across England which have declared bankruptcy (or are warning they might). The housing crisis in England is increasingly being singled out as the most serious threat to local government solvency.
Meanwhile, homelessness is on the rise, private tenants are increasingly priced out of the rental market, home owners are struggling to pay mortgages and councils are struggling to provide the requisite support.
But, research shows that buildings converted into homes under PDR provide significantly worse residential quality, particularly in terms of size, amenity space and location, than homes given full planning permission.
The loss of local authority oversight that extending PDR would bring will only make thehousing quality crisisworse. Furthermore, converting offices into housing is unlikely to significantly boost housing supply in line with need.
The UK government trialled PDR in May 2013, primarily to encourage converting offices to housing. This was made permanent in 2016. While developers in England were previously required to submit detailed plans and apply for full planning permission for this, the changes meant they only had to notify the local planning authority.
Conversions of offices to housing under PDR have contributed 81,282 homes (net) in England since 2015. Although data for specific changes of use (from office to housing, say) is not available before 2015, overall net change of use provided approximately 12,500 homes per year before 2013.
After PDR was introduced, conversions of offices peaked at 17,751 in 2016-17. In 2021-2022, however, this change of use accounted for just 8,359 units (3.6%) ofnet additional housing in England.
The majority of PDR conversions in England have been small-scale (below 10 units). In other words, the number of homes it can ultimately provide pales in comparison to the government’s target of 300,000new homes per year.
Vacant office space across the UK is higher than before the pandemic, but the picture is mixed. Companies still want the best quality office space to bolster branding, staff retention and sustainability credentials.
Office vacancy rates incentral London were 9.4% in the second financial quarter of 2023. This is significantly higher than the long-term average of 5.5%. However, underlying demand remains relatively high. During the same period, the highest level of space under offer by occupiers since 2019 was recorded.
Moreover, converting offices is not straightforward. Office vacancy rates do not necessarily translate into empty buildings, or even readily convertible sections. Office conversions is also a typically costly endeavour.
Large buildings are physically complex to adapt for housing, particularly in ensuring natural light and ventilation reach windowless central parts of the internal floor area. Developers also have to install additional cabling and piping for domestic use. There are also new requirements regarding external cladding. Many office buildings are thus not practical or commercially viable to convert.
What’s more, land in central office districts remains valuable. Even if converting an office building is viable, high construction costs and interest rates mean the necessary asking price for properties would likely exclude the private housing market where need is greatest – that of first homes.
Lastly, offices tend to lack the features or development potential that have, to date, made older, industrial buildings attractive for conversion to luxury homes. And there’s also the wider problem that central office districts often do not have the amenities which residents expect in their neighbourhoods either – including schools, GP surgeries, and parks.
With office markets polarisingas demand concentrates on high-end spaces, offices targeted for conversion by developers are likely to be older buildings in locations such as edge-of-town industrial parks. There have been well-publicised examples of councils, such as Harlow, in the south-east of England, placing social tenants inhastily converted, isolated office blocks, such as Shield House andTerminus House.
The resulting dire living conditions have seen such developments variously labelled “open prisons”,“human warehouses”and the “slums of the future”.
Housing of this kind, which fails to meet even basic human needs, risks further entrenching the socio-economic inequalities driving the housing crisis. This crisis is multi-faceted. It encompasses supply, affordability and quality, which are each highly localised.
While housing needis highest in London and the South East where affordability is lowest, 380,000 new homes per year are needed across the UK, with 100,000 for social rent.
Bypassing the planning process through PDR means local authorities miss the opportunity to secure affordable housing through developer contributions in return for planning permission. It also hampers councils’ ability to ensure that new housing responds to local circumstance.
Local oversight of how places are created is important. Local planning authorities are best placed to coordinate the changing built environment astown and city centres evolve. They also have a key role in upholding housing quality standards, and in delivering affordable housing.
The planning system supports this. It alsodoes not prevent underused buildings being converted into housing. In Scotland, the devolved planning system has narrower PDR.
As a result, local authorities retain oversight of conversions, through which they can maintain housing quality standards and ensure redevelopment improves its surroundings. For example, two major shopping centres in Glasgow, theSt Enoch Centre and Buchanan Galleries, are currently planned for conversion into mixed-use districts, including substantial housing. The City Council is an active stakeholder in each project.
In its one-size-fits-all approach, however, the way PDR in England is being advocated appears to be more an experiment with planning deregulation, on ideological grounds, than a long-term response to housing need. Putting the onus on a fragmented market to solve the housing crisis is likely to produce more long-term problems than solutions.
Sources: The Telegraph & the International Public Policy Observatory