Could Covid-19 trigger a growth in live/work units?

Could Covid-19 trigger a growth in live/work units?

COVID-19 has led to a widespread shift to home working and it seems certain that in the future we will spend much more time working and living in our homes. But will this shift allow for a revisit to delivering purpose built live/work units in the UK – a concept that emerged in the UK in the 1990’s and fell away again by the mid-2000’s.

Originally inspired through ‘loft living’, the modern concept of live/work housing schemes originated in the United States and was seen as a way to regenerate inner city areas made redundant by the decline of the American manufacturing industry. The appeal for ‘loft living’ in the 1980’s resulted in the gentrification of a number of neighbourhoods in America and appeared in the UK in the early 1990’s.

As a concept it was initially welcomed by many Local Authorities in the London area, with several boroughs developing Supplementary Planning Guidance for this development type. This allowed for some element of development control over the separation of ‘live’ and ‘work’ areas within the apartments.

As time went on, developers successfully challenged the controls within the guidance, principally the work space requirements and the quantum of affordable housing; which led to scepticism within some planning authorities, with many growing to see the concept as means of overcoming planning controls with projects often reverting to solely residential use.

Planning

The main barriers to the live/work product expanding beyond London were founded by these scepticisms. Over time the concept was abused by some as a ruse to get around employment land restrictions whilst not providing actual workspace. Enforcement issues and an inconsistent approach from the Planning Inspectorate on determining appeals led to the concept slowly failing.

In part the confusion surrounded the use class. Live/work is not an easy category to define precisely and is more of a conceptual idea than a precise planning law term and as such is often referred to as sui generis. Conditions have been applied which have sought to secure a continuing ratio between workspace and living space, prevent sub-division and restrict residential occupation to those employed in the linked workspace.

The concept itself complies with a number of the key objectives within the National Planning Policy Framework (‘NPPF’) – delivering required homes, whilst helping to build a strong competitive economy and making effective use of land. NPPF paragraph 81(d) states when producing planning policies, these should “be flexible enough to accommodate needs not anticipated in the plan, allow for new and flexible working practices (such as live-work accommodation), and to enable a rapid response to changes in economic circumstances.”

Research suggests that whilst the NPPF appears to encourage flexible accommodation such as live/work, very few schemes have actually been permitted, with those that have consisting of very low-density numbers, often in rural locations.

However, given the COVID-19 pandemic, there is certainly appetite for much more home working.

JLL Living Priorities Survey

JLL’s recent Living Priorities Survey revealed a dramatic shift in our staff’s appetite to work from home more in the future. If we are to assume that the wider population shares the same view, it is likely that homes including working areas are now of increased importance which could signal more demand in the market for live/work units.

Mission Lofts, USA

Mission Lofts is a newly opened live/work development near Washington DC which has taken mixed-use design to a new dimension and presents a case study for how live/work units could work successfully.

Unlike most other live/work developments, Mission Lofts allows each of the units to be occupied at all time at the tenants’ choice as either a place to live, a place to work, or a place to do both. Amenities are included, accessible to both residential and commercial renters.

One of the key issues surrounding the success of live/work units in the UK in the past came down to obtaining a mortgage and whether it should be on commercial or residential lending terms. 

Mission Lofts’ success indicates that live/work units may evolve more easily from the purpose-built rental models such as co-living or build to rent.

For the live/work model to exist within the English planning system, it may be that a balance is required between the likes of the Mission Lofts model and the evolving co-living and BTR models that are becoming ever more prominent.

A development which provides flexible work space on a communal floor would give the Local Authority and residents surety as to the product which is getting delivered and as such reduce the potential enforcement headaches for the developers/residents down the line.

In order to monetise the model, there may be potential to lease the flexible workspace to a dedicated workspace provider to generate a secondary income. There may also be potential to allow for a designated restaurant or café operator to be included within the floorspace, providing lunch options to those working. This again may allow for some rental income to be generated.

Ultimately there may be some obstacles that remain for the growth of live/work units in the UK, but with an increasing number of us working from home, working areas are likely to become a more common feature of homes generally. And perhaps this is the kickstart that the live/work model has been waiting for.

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