9 January 2020

Urban Developments: Common issues and how to address them - Part 2 - Strategic Planning

Using a tired, mixed-use retail office building in London as a case study, we look at some of the issues which might be encountered on an urban redevelopment scheme. In this second part, Miri Stickland quizzes Matt Evans on the planning process.

So just to recap, I am considering converting to predominantly residential use and adding a couple of extra floors on top of the building to maximise my return. Matt, what do we need to think about from a strategic point of view in terms of the planning process for a redevelopment scheme of this type?

The first step to consider, before we put in an application, is the pre application engagement process, to which there are two elements.

Firstly, there is the formal pre application where you go in to see the Council, probably closer to submission, when you have a good idea of what you want to build, and you talk to them about what is going to come forward. They give you an informal officers' opinion which is non binding. This can be a useful steer for you to make changes to the scheme, particularly if it is controversial and there are elements of the scheme that you know are pushing the boundaries. Height, for example, is always one that gets knocked back. At the end of that, you should be left with a better idea of what will be acceptable in planning terms.

Alongside this is a public engagement process that the government is trying to encourage. Essentially this means publicising what you're going to build in the local area, get out there and participate through informal consultation processes, billboards, meeting with local people and businesses and really explain what you are trying to do, to get the buy in from the local community.

Presumably that can be both advantageous and come with its drawbacks as well?

Oh completely. It can be utterly petrifying to invite that sort of criticism - by this point the developer will have spent quite a long time and a lot of money in putting together the scheme – so to invite the public in and potentially have them rip it to pieces can be daunting! But actually, it can bring some really positive benefits too. You might uncover people who have an interest in the land or a right over the land that you were completely unaware of. It can help issues like ransom strips get flushed out early on, which then allows you to make changes before your application gets submitted, which is hugely helpful.

Equally, you can start identifying, mitigating or addressing potential planning issues. Are there going to be noise problems or access issues? Are you going to need to stop up areas of the highway? The adverse element to it can be that, if the pre-application process goes on too long, you are giving local residents time to mobilise opposition to the development. For example, when I was working at a local authority there was a scheme with two or three years' worth of engagement, by the end of which there was a public campaign, which had raised a lot of money, and such a groundswell of opposition that the authority were put under serious pressure to refuse the application. Ultimately the pre-application engagement needs to be commensurate to the sort of development you are seeking to bring forward.

Once you've gone through that process and are at the stage that the planning application is ready to go in, what sort of timeline are we looking at?

This looks like it is going to be a major application. A major application has a number of criteria, one of which is that it is for ten dwelling houses or more. Unfortunately, the timeframe for determining that application – or the statutory timeframe at least – is 13 weeks. A minor application which, helpfully(!), is defined as anything that is not a major, has a timeframe of eight weeks. But I don't think we fall into that, given the scenario we're looking at. In theory, every local authority should look to determine applications within these timeframes but very often will overrun for various reasons: complexity, officers aren't available, local resources are stretched. What often happens is that these timetables get extended by agreement with the developer. So the message is, whilst it says 13 weeks on the tin, don't bank on that.

What sort of criteria will the local authority be looking at in terms of assessing your application?

Every planning application should be determined in line with the development plan, unless material considerations say otherwise. We are talking about inner London here, so the development plan will be the local authority's own plan which will contain a variety of policies on matters including education, affordable housing, highways - everything that the development will, in theory, impact. The authority will have to reach a conclusion about whether the development is in accordance with their local plan or not.

The other element of the development plan in inner London is the London Plan, which contains a series of more strategic London-wide policies. Ultimately, you still have to be in general conformity with that as well. However, as you would expect for a document that covers such a wide area, these policies are not terribly prescriptive because you could not possibly write a document that covers all aspects of every single development that might come forward!

Are there parts of the London Plan you could pick out, which are particularly relevant to this scenario?

Well certainly affordable housing provision, particularly if we are in the realms of ten homes or more, because that is the general threshold in inner London for the provision of on-site affordable housing. Currently, there seems to be a particular emphasis on smaller sites delivering a lot more of the affordable housing. That has come in for an amount of criticism - and probably rightly so in some quarters – but it is something that you would need to look at quite closely.

Although it’s unlikely to be relevant in this scenario, we are finding that designated strategic industrial land is proving a big issue at the moment. Previously, developers were able to acquire this type of land and being able to bring it forward for residential development. However, with the current administration, getting a release from industrial designation is proving harder than it used to be.

One other point to consider here is, because the building we are talking about is a former office block, you have got the option of utilising permitted development rights, which have been in existence for quite a while now. This can give you the opportunity to establish residential use on that site without having to go through the formal planning application process.

Although there are quite a few areas in London that have got exemptions from that.

Yes, and that's an extremely relevant point for inner London where, particularly when the right first came in, the concern was that so much commercial space was going to be lost because the value of residential floor space was so much higher. Certain areas were excluded through changes to the primary legislation and we also have what are known as "Article 4 directions”. Councils can use these to remove permitted development rights in specific areas or across entire boroughs.

PD rights could be advantageous in this scenario in that that it is a faster process. The council has 56 days to come back to you to say yes or no. There's limited grounds for objecting - transport, contamination, flood risk, noise impact - and affordable housing is not on that list. So you can have a fairly large office block that comes forward with no requirement for affordable housing.

Useful rights if you can utilise them!

If they are available to you, yes. Certainly in this scenario, it's the first thing that jumps out at you: can you make use of PD Rights?

I think the final thing to think about is the mitigation of impacts of a development, be it by Section 106 Agreement or Community Infrastructure Levy. CIL is incredibly complicated and essentially is a tax on new floor space. I would highly encourage people to get specialist advice on it because it is not straightforward and crystallises on commencement of the development, so if you don't understand the position and then you start your works off, it can be very hard to row back from that.

Again, as we are talking about a development scheme in London - there are two types of CIL?

Yes - so all boroughs in inner London have their own CIL charging schedule which sets out levels for specific use classes and specific areas. For example, Islington have a very high student accommodation tariff, effectively to divert that type of use away from the borough. As well as that, there is the London Mayoral CIL which is collected by the boroughs for the GLA. So it is all rather more complicated than just a flat tax.

Urban Developments: Common issues and how to address them - Part 1

Listen now: for further commentary on common issues encountered on urban development schemes, click here to listen to the Forsters More Than Law Podcast.

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