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Class E to residential: What impact will the new permitted development rights really have on our towns and cities?
From 1 August 2021, one of the most far–reaching changes to permitted development (PD) rights will take effect. But what impact will this change really have on the vitality and viability of our town and city centres? We explore the benefits and challenges that the new PD right may bring.
Class MA will allow commercial, business and service uses under Class E to be converted to residential use (Class C3). This goes significantly beyond existing PD rights, which permit offices and retail to change to residential use, allowing other uses such as restaurants, gyms, health and nurseries to benefit for the first time.
Earlier this year we set out more information on the Class MA prior approval process, which can be found here.
We need more homes and placing people in the heart of our centres should help make commercial businesses more viable. So what’s the catch? Well, there are several and PD rights are only part of the solution. In some centres, using PD rights is not the answer at all.
The benefits
The Government has sent a clear message that housing delivery should be achieved primarily through development of ‘brownfield’ land. The revised approach to the standard method for assessing housing requirements is focussed on a 35% uplift within the country’s 20 largest cities and urban areas. Given the political opposition to Green Belt release at the local level, this places greater pressure on urban areas. A convenient opportunity for town centres then.
The concept of urban living has many sustainability benefits and remains an attractive proposition that is growing in popularity even despite the pandemic. New build to rent and co-living concepts continue to drive a dramatic urban renaissance, reflecting a clear shift in how young people want to live.
An increase in the number of people living in our towns and cities has helped create more vibrant centres, proving that this can be successful.
Undoubtedly the new PD right has the potential to deliver huge numbers of new homes, and build further upon the 72,687 [1] homes delivered in the five years prior to March 2020 under the previous office to residential PD right (Class O). We support flexibility for landowners to rapidly respond to changes in the market and, for some, more urban homes through conversion or upward extension is the solution. However, the quality of development can be a concern that impacts on the attractiveness of a centre.
The challenges
There are clear challenges in achieving the right balance of residential alongside commercial, cultural and other uses:
1. Undermining local policy objectives and piecemeal development
PD rights for Class E to residential takes away much of the control that local authorities would like to have, and risks undermining local policy objectives and fragmenting the retail core with piecemeal housing delivery. It is also unlikely to deal with the repurposing of the largest vacant stores which would most benefit from a change of use. This places the weakest retail centres at greatest risk. Many local planning policies require radical review, but in other cases there are well considered and up to date area masterplans that could be severely compromised by the new PD right. The best opportunity to optimise housing delivery in our centres, as well as ensuring the best mix of uses in the right places, is through a holistic plan-led intervention for the whole centre. Such strategies should face into the commercial realities whilst being bold advocates of change, specific to the place.
2. Retaining amenities that attract people and sustain centres
Although there is a 1,500 sq m floorspace cap applied to the PD right, and restrictions in conservation areas, the regulations do not require any assessment of the loss of that use on the vitality of a centre to justify conversion to residential. The vacancy test is only three months, which could apply to a vast proportion of commercial floorspace in centres. The proof will be in the uptake but extensive loss of commercial floorspace in some centres risks losing the attraction of moving there in the first place.
3. Affordable housing and mix and tenure
The PD right does not require the provision of affordable housing, nor does it provide controls on tenure or mix. This will continue to exacerbate under delivery of affordable housing and could lead to issues with social cohesion.
4. Public realm and amenity
Planning applications for residential development within centres often contribute to the public realm through the delivery of on-site landscaping or financial contributions towards public open space. There is no such requirement to deliver either private or public spaces via PD rights, nor does it require the provision of internal or external amenity areas for residents. The need for these amenities and open spaces has been amplified during the pandemic and will be key to the future success of our centres.
Of course, these new PD rights will work well in some circumstances. Brindleyplace in Birmingham, for example, an office-led development with restaurants, bars and other leisure uses, could benefit from additional residential created via the new PD right. Adding a small amount of residential uses to these types of areas could create more balanced communities and broaden their appeal.
The new PD right may well deliver much needed new homes in town and city centres, and arguably where the sustainability benefits, and the ability to address climate change, are greatest. There is greater scope for even more homes to be delivered but there remains a real risk that this will be a distraction to the broader issues our centres face. Time will tell but this new PD right could severely undermine the wider regeneration efforts of some centres.
A broader set of holistic interventions are needed to address the issues that centres and high streets face. Landowners and local authorities must work in partnership to develop strong visions for centres and deliver location-specific repurposing of buildings and spaces with long term success in mind, rather than short term gains for housing delivery. Local authorities may decide to continue to apply existing Article 4 directions or introduce new ones to take back control. It will be interesting to understand how future directions can be applied given the tightening up of rules in the revised NPPF.
We are actively working with landowners, developers and local authorities to regenerate centres and create long term social value. For more information on the PD right changes and our work on town centres please contact Ben Williams or Andrea Arnall.
14 May 2021
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