How is Co-Living being treated in Planning terms?

Co-living currently lacks a clear universal definition in planning terms. However, it is generally understood to be a large scale purpose-built managed rental block, comprising small private living units with extensive communal facilities, under single professional management. The new London Plan Policy H18 covering ‘Large-scale purpose-built shared living’ provides some insight into what is intended in terms of design and concept. There are clearly delineated private and communal elements. The private units would provide adequate functional living space and layout but are demonstrably not C3 residential units. A range of communal facilities and services are envisaged, including access to a communal kitchen, indoor and outdoor amenity spaces, laundry facilities, and bedlinen/cleaning services. In London, such blocks should not contribute to car dependency. A minimum length of stay of 3 months is a further criterion.

The London Plan guidance therefore describes a building which is quite similar to modern student accommodation in terms of design and layout, but as with build-to-rent is intended for a wider letting market not limited to specified groups.

What are the routes through planning for co-living?

So far, we have observed a number of routes being taken to secure planning permission for co-living. The earliest schemes have been conversions via the Permitted Development (PD) office to residential conversion route. One such example is a portfolio of three office buildings in Newcastle which have been converted to C3 use under PD rights and delivered as co-living schemes by developer Urban Study. These have been let to a mixture of students and young professionals. London-based residential developer Dandi has also developed several schemes via PD in London locations from Zone 2 outwards – Hounslow, Shepherd’s Bush and Enfield, and these are very much aimed at the professional market in terms of location and design.

PD can mean an easier route through planning and reduced CIL contributions, and former office buildings sometimes have existing parking which is hard to achieve on new build schemes today. The external appearance of such buildings does not in all cases match up to the new interior post-conversion, but the ‘curb appeal’ can be improved with attention to signage, an inviting reception area and landscaping. Other straight residential conversions show us that the external façade can be retrofitted.

The new London Plan Policy H18 categorises co-living as ‘sui generis’ use, and affordable contributions are payable in common with the policies for Purpose Built Student Accommodation (PBSA) and C3 schemes. No on-site affordable provision is required, but either an up-front cash payment in lieu of off-site C3 provision, or an in perpetuity annual payment of equal value to 35% of the units being offered at 50% of market rents is stipulated. So far there are few examples of the implementation of this policy, and seemingly no consistency across London boroughs in terms of how co-living is being received. Some local authorities are building upon the London Plan policies, adding their own additional ‘hurdles’ to what qualifies, as they review their Local Plans.

The Collective has secured consent for a 222-bed co-living sui generis scheme on their site at Palmerston Road, Harrow with a co-working element, and an affordable payment of £977,000, equating to £4,400 per unit. They have also pursued a sui generis route to achieve approval for a 292-room co-living scheme in Earlsfield, Wandsworth, where the affordable requirement is to be met on site through provision of discounted market units.

C1 hotel use is a route which has been taken by The Collective for their newly completed scheme in Canary Wharf. Planning conditions allow for 55% of less than 3 months stays (which could be nightly), 10% of 3-6 months and 35% of 6-12 month stays. Clearly the hotel planning route will depend on a suitable location and will not work everywhere. However, in this case, The Collective hopes to take advantage of proximity to large organisations based at Canary Wharf for long stays (large number of professional people working nearby) and short lets (internship programmes, business travel, etc). They have also achieved a C1 hotel consent for a 240-bed co-living scheme at Hackney Wick, granted by LLDC. There are seemingly no affordable housing contributions with this application, and no length of stay provisions.

Outside of London, we are not aware of any planning authorities that have a specific co-living policy. However, several student accommodation operators have secured co-living consents in regional cities. IQ Student Accommodation secured a mixed use scheme of 403 co-living units (642 rooms) and 242 student rooms in Manchester. The two uses will be arranged in two separate towers with separate entrances, with separate communal areas on the ground floor. In August 2018, Fusion Student secured planning consent for an 864 room ‘sui generis’ co-living scheme at a site on Moore Street and Fitzwilliam Street in Sheffield, arranged as 268 studios and 87 cluster apartments, with an affordable housing contribution of £865,000, equating to £1,000 per room. Both the IQ and the Fusion schemes appear to be ‘open’ as to occupation. Oxford City Council has introduced ‘co-housing’ as a contributor of housing delivery in their draft Local Plan.

Scape has also secured a mixed-use consent for planning in Guildford, on the second phase of its existing student scheme. The co-living element is for 113 units and may not be occupied by students; it will have separate communal areas to the student use.

Although the lack of consistency in planning presents a challenge for applicants, it also offers the opportunity to bring forward new concepts and to shape future development in this new sub-sector. It goes without saying that while the sector is in its infancy, it is desirable to secure a consent which is as open as possible in terms of length of stay and types of occupier, until the demand profile is better understood. Furthermore, the emergence of a more professional, purpose-designed and institutionally acceptable co-living product is desirable in the wake of recent adverse publicity on poor quality, amateur co-living schemes.

CBRE is able to offer specialist planning advice, to guide you through the complexities of the planning system in this new and emerging sector.