Moving the dialogue from 'protection' to 'creation' to meet London’s commercial and residential needs

Type News

Date 24/07/2018

Every action has an equal and opposite reaction. In an attempt to address London’s housing affordability crisis we are on the verge of creating another. Over the past decade building tens of thousands of new homes in circumstances of tight land supply has led to the loss of significant amounts of smaller scale and often low cost commercial space – threatening the city’s economic DNA.

It is now time to face up to the scale of the challenge and opportunity in London before it is too late. We urgently need to consider a new approach for delivering the levels of commercial and residential space that London needs in a way that better utilises our limited land supply.

While the Mayor’s vision of 'good growth' is a welcome recognition that London needs to grow in a different way than it has done in the past, the additional protection for designated employment sites will still leave a number of businesses vulnerable. In fact, the GLA’s own evidence suggests that 36% of land that is currently home to a range of small business units, light industrial workshops, last-mile logistics depots and creative studios will be unprotected and therefore remain at risk from housing development. Ultimately this will mean that the trend of loss of space for ordinary businesses is likely to continue unless we change our approach.

The Draft New London Plan’s approach to protecting strategic industrial land is a key tool in London’s armoury to promote economic growth – it will retain a reservoir of land for all those activities that cannot sit comfortably alongside residential. Large scale production, logistics, waste process and infrastructure facilities are all vitally important and need a space in the city to grow.

However beyond these there are myriad activities that can much more easily be co-located or integrated into mixed use buildings creating a ‘New London Mix’ of residential, light industrial and other uses. By taking this approach to mixed use seriously we have the ability to move the workspace debate away from simply protecting what we have to one about the creation of truly additional space – expanding London’s economic capacity rather than simply holding it in stasis.

This involves some radical thinking, no longer constraining economic activity to specific ‘employment sites’ but allowing it to diversify our town centres, permeate our housing estates and provide a key underpinning for major regeneration schemes. Delivering this additional capacity can offer significant strategic and local benefits; retaining jobs and amenities close to home, protecting local supply chain networks for existing businesses, providing more affordable space for new enterprises to start;, creating more lively streets and neighbourhoods, and increasing business rates income for cash-strapped local authorities.

Ultimately this New London Mix can retain and grow the existing and new businesses that make up the rich ecosystem of London and its neighbourhoods, whilst allowing for additional much-needed homes to be delivered, thus underpinning an inclusive and sustainable model for urban growth. This approach should not solely be for the niche, small or artisanal activities (as vital as these things are), it offers an opportunity to provide 'ordinary space' for 'ordinary businesses' that can help support the delivery of more interesting, diverse and inclusive communities.

While there are one or two exceptional examples that already exist, we need to focus on making them part of mainstream thinking, creating a better understood, new asset class for investors. This requires close collaboration in the private, public and housing association sectors, as well as overcoming persistent institutional barriers and issues of perception that consistently prevent such solutions from progressing. This will require new approaches in policy, institutional attitudes and funding if widespread market failures are to be addressed and good practice is to be scaled to meet the opportunities.

The creation of a new property asset class is not without precedent in London: from small beginnings, housing associations now house more than one in ten Londoners, and are major players in growing the city; the Build to Rent sector (almost unheard of 5 years ago) will deliver 60,000 new homes across London and co-working has gone from niche to mainstream almost overnight. If the political and investment will can be aligned the New London Mix can be the next big opportunity shaping our great city.

At its heart the New London Mix has to work for both residents and businesses if it is to succeed. Therefore, we can no longer look at land supply issues in each sector in isolation, but as part of the same complex urban ecosystem. To this end, the ‘New London Mix’ needs to become a crucial pillar for London’s housing and economic growth policy.