Will Tide turn the GLA on co-living?

All eyes are on the Greater London Authority this week after Croydon Council’s planning committee unanimously approved Tide Construction’s plans for London’s largest co-living scheme. The 817-bed scheme has impressed the council’s planning chair, convincing her that co-living is a viable solution to the borough’s housing issues, but will it be enough to get the GLA on side? “Co-living does work,” says Croydon’s Toni Letts. “It is the future. We don’t have the space to build that many homes. There is skill-sharing, a sense of belonging. It really can be a community.” With the nod from Croydon, Tide’s scheme will be referred to the mayor’s office for a stage two report, a move that should force the GLA to finally make a decision on co-living. Setting a precedent Ian Fergusson, partner at planners Barton Willmore, says that if the mayor does make a decision it would finally set a precedent for the sector. “It will provide the industry with a clear steer on the mayor’s expectations of what kind of scheme will be acceptable and give people a benchmark and the confidence to proceed,” he says. “The mayor’s response to the affordable housing element will attract a lot of interest, because lots of people have been wrestling with the issue of how you do the sums for affordable housing. That’s been a real sticking point for investors.” However, a decision is by no means guaranteed. Only one co-living scheme has made it to stage two so far and a slow response from the GLA ultimately canned the project. The Collective’s co-living plans for Stratford High Street were referred to the mayor for approval in June 2017 but, after more than two years of waiting, the GLA has still not responded, prompting the Collective to lodge fresh plans for a hotel, which it is now developing. Other developers have purposely kept under the criteria that requires referral  (15,000 sq m of floorspace or 20,000 sq m in central London, or 30m in height) to avoid lengthy delays. The only two other projects referable – Fifth State’s 320-bed scheme in Ilford and Spaces’ 172-bed scheme in Southwark – were both pulled. But Jules Pipe, deputy mayor for planning, regeneration and skills, says the GLA has not closed the doors to co-living. “The primary concern about co-living is that it is not watering down the space standards that we have for independent residential units,” says Pipe, although he remains reluctant to put a figure on what might be acceptable. It depends on the communal offer, the spread, and the service, he says. “There are still people out there who are bringing forward 8 sq m rooms,” he says. “It has got to be somewhere in the mid-20s, which would be comfortable, with a serious communal offer, so it’s not just a series of boxes around a lift core. Having that decent offer justifies the reduction down from the 37 sq m.” The concern is that it will ultimately end up being overly prescriptive, where it doesn’t need to be – Richard Lustigman, JLL So, will the GLA approve a scheme this year? “It is possible,” says Pipe. “The scheme has got to be the right offer, where people are comfortable saying it is fair for people to live there, that people want to live there and it is not just a case that it is the only place they can afford.” While a green light from the GLA would allow the industry to evolve with larger scale schemes, there are concerns that unattainable expectations and rigid rules will continue to stifle growth. Restrictive planning policy “London is at the epicentre of the global co-living movement, but is among the most restrictive of planning policy environments,” says Richard Lustigman, director for living capital markets at JLL. “The concern is that it will ultimately end up being overly prescriptive where it doesn’t need to be. There is talk about how many fridge freezers are going to be in a building and where the kitchen should be. Trying to fix the granular components of a building is not going to work. “Some suggestions are going to be self-defeating,” adds Lustigman. “The key example is the idea that co-living can’t provide forms of affordable housing.” The GLA’s handling of Tide’s on-site affordable housing in place of its preferred payments might give an indication of how flexible the mayor can be. Investors targeting numerous cities will also need joined-up policy for real scale. The GLA mandates a minimum of three months for a stay, whereas Manchester is toying with policy of a maximum of six months, for example. “There needs to be broader discussions around how we find a solution or a product that can meet the needs of varying groups,” says Lustigman. While clarity on scale and affordable housing will be a step in the right direction, investors will want flexibility on length of stay and asset use classes, which, say experts, is unlikely to come from the GLA anytime soon. Unless, of course, the Tide does turn. To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette