Written evidence submitted by Dr Ben Clifford, Dr Jessica Ferm, Dr Nicola Livingstone and Dr Patricia Canelas [PDR 046]

 

Introduction

 

This document is the response from Dr Ben Clifford, Dr Jessica Ferm, Dr Nicola Livingstone and Dr Patricia Canelas. Drs Clifford, Ferm and Livingstone are Associate Professors based in the Bartlett School of Planning, University College London (UCL). Dr Canelas is Departmental Lecturer in Sustainable Urban Development, University of Oxford. Collectively we are academics with expertise in planning and real estate who have undertaken research looking specifically at permitted development in England since 2017. This includes a report published by the RICS Research Trust in 2018, a book published in 2019, a report to the TCPA in 2019, and the independent report to MHCLG published in 2020.[1] This response to the call for evidence, written specifically for the committee, draws on our previous and ongoing research over several years and our broader understanding as scholars who have been particularly interested in permitted development rights.

 

In summary, whilst there has been some increase in housing delivery as a result of introducing PDR for change of use of agricultural and commercial buildings to residential, we believe this has been at a cost of delivering a large number of poor quality homes. The housing delivered has not always matched local need, particularly in relation to affordable housing, and the increased burden on local infrastructure (particularly social and green infrastructure) has not been adequately addressed. There is also evidence of some potential economic disbenefit where still occupied and needed commercial space has been converted. Whilst some issues have been addressed through things like requiring minimum space standards for conversions, other concerns remain. Given the government’s recent proposals to expand PDR yet further for Class E to residential conversions, and given the potential for there to be greater commercial-to-residential conversion as a result of the pandemic, we believe there is an urgent need to address these concerns and ensure better governance of the adaptive reuse of buildings. Local authorities and local communities should be more empowered to proactively plan for such development.

 

 

What role should permitted development rights (PDR) play in the planning system?

 

There have always been permitted development rights since the implementation of the statutory system of development control in 1948. They prevent the system becoming swamped with extremely minor development not requiring the scrutiny of the planning permission process. They have a valuable role to play in terms of minor extensions to existing buildings, small temporary buildings and the erection of things like street furniture. Nationally defined rights should be constrained to minor development, including change of use between various commercial uses unlikely to have notable externalities, with the option for expansion through Local Development Orders if communities and local planning authorities would like to increase the scope within a locality. We do not believe they should be utilised for any development leading to the creation of new dwellings.

 

 

What is the impact of PDR on the quality and quantity of new housing, including affordable and social housing?

 

The extremely poor quality of housing being created through commercial-to-residential PDR across England is a national scandal. In both our 2018 (for RICS Research Trust) and 2020 (for MHCLG) research, we compared conversion schemes allowed under PDR with those allowed under full planning permission. The 2018 research involved site visits to 568 change of use schemes and detailed consideration of 1,855 dwelling units created through such schemes, across five local authority urban areas. The 2020 research involved visits to 639 sites and detailed consideration of 3,156 dwelling units across 11 local authority areas. In both pieces of research, we found PDR schemes were of notably lower quality than the planning permission schemes.

 

The key findings were:

 

We were able to demonstrate in our 2020 research that whilst performance against housing quality measures could vary between local authorities (e.g. due to issues such as local market conditions, deprivation levels and planning policies), PDR schemes were creating significantly poorer quality housing in all parts of England than planning permission. These trends were also apparent in an analysis of another 2,140 dwelling units created under PDR in the more limited 2019 research for TCPA and it is the frequent combination of the poor performance of PDR schemes across multiple factors that has created such a sizeable stock of poor quality housing. It is important to note that in our 2020 research we did find some areas, such as energy efficiency and access to local services such as shops, where on average there was little difference between PDR and planning permission schemes albeit in terms of access to services. Sometimes the concern must be more about the extremes allowed in a few notably unacceptable cases rather than the average across all schemes.

 

Amendments to the regulations made last year, and the prior approval considerations for the new Class E to residential PDR, do address some of these concerns. The minimum space standards requirements will certainly in our view go a long way towards ensuring a better basic quality of habitable accommodation but the other areas of concern we found have either not been addressed or only partially addressed by amendments to  the regulations and prior approval process. Indeed, some of the issues would be difficult to square with a PDR process where the development is assumed to be acceptable in principle when some conversions clearly should not be permissible. There are also important questions about dealing with the legacy of poor-quality conversions from over seven years of this type of PDR without adequate safeguards having been in place.

 

We would also highlight that because prior approval is more a process of checking against a pre-set list of considerations, a planning officer cannot take a holistic view of a scheme in the way they can with a normal planning permission. Thus, an amendment introduced by the government last year was for PDR units to have ‘adequate natural light to all habitable rooms’, which is an improvement against the complete absence of such a requirement, but it still is not a requirement for a window. We have already seen one scheme where the developer is proposing creating new flats under the ‘building upwards’ PDR but the natural light requirements would be fulfilled through each flat only having skylights, not a window through which one can look out. This can be damaging for mental health and has potential ventilation issues, but under PDR there would be little a local planning officer could do to stop such a scheme. This is in contrast to planning permission, where the usual local plan policies around creating an adequate standard of residential accommodation could be utilised to prevent such unsuitable conversions.

 

We heard during our research evidence from some developers and planners of the way that PDR had driven local real estate markets to a ‘race to the bottom’ so that it can be harder for those wishing to do higher quality developments to make the finances for these stack-up against competitors, particularly when bidding for sites. Some high quality conversions have been delivered through PDR, but these are a minority of schemes and have tended to be in more prosperous areas. Better regulatory minimum standards could thus actually not only prevent unacceptably poor-quality conversions but positively support those whose business model is based on wanting to deliver such higher quality schemes.

 

In terms of affordable housing contributions, we estimated in our 2018 research that our five case study local authorities had lost out on 1,667 affordable housing units over a three year period based on what they would have sought under adopted policy and were likely to have been able to secure after viability negotiations had the office-to-residential PDR conversion schemes considered gone through full planning permission instead. We are aware of a view sometimes expressed that this loss of affordable housing is not real since these PDR schemes never would have happened had they required full planning permission. This is clearly incorrect. MHCLG data show that dwellings were being created through change of use conversions long before PDR was introduced for such schemes, for example 20,150 such dwellings were created across England in 2006-07 under full planning permission.[2] We also found evidence of some diversion from new build apartment development under planning permission to change of use apartment creation under PDR in Leeds and Leicester because of profitability calculations.

 

Whilst PDR has certainly increased the number of dwelling units being created through change of use of commercial and agricultural buildings to residential, equally a proportion of these conversions would still have happened had full planning permission still been required and in some areas, particularly weaker housing markets, some developer activity has shifted from new build to conversion schemes. This means that it is fair to say there has been an actual loss of affordable housing contributions compared to what local authorities would have been able to secure if this PDR for change of use to residential had not been introduced. Furthermore, we found evidence in our 2018 research of large increases in property value as a result of buildings having gained prior approval for conversion from office-to-residential (before that was even implemented) and heard evidence of the profitability of some conversion schemes. It therefore seems that some degree of affordable housing contribution would have been a possibility without threatening scheme viability. We also found little evidence of PDR schemes being notably cheaper when sold or rented than new build schemes.

 

It often seems that the approach to PDR has been that it is welcome because it delivers more housing units, but we need to look beyond overall headline numbers to consider whether we are creating the right type of housing, in the right places. This means ensuring places which are fit for habitation, which is questionable in the case of some PDR schemes. It also means ensuring sufficient genuinely affordable homes are provided as per local need. PDR schemes make no contribution toward provision of affordable and social housing, which is often a pressing requirement in many local authorities. In the private rented sector, occupiers are paying market rents for poor-quality housing, further skewing perceptions of value and potentially inequalities, in local markets. The degree to which PDR has actually helped resolve our housing crisis is highly questionable.

 

 

What is the impact of PDR on local planning authorities, developer contributions and the provision of infrastructure and services?

 

There has been a detrimental financial impact on local planning authority resources, as a prior approval cost £96 (initially £80) per scheme regardless of how many units are being created, compared to a planning application for a similar conversion which would cost £462 for each dwelling created. There is less work with a prior approval than a full planning application, but the difference is not as substantial as these fees would suggest. In our 2018 research, we estimated that over a three-year period, the five local authorities studied had lost out on £4.1million in planning fees alone. The government has recognised this issue and the class E to residential consultation outcome has set a fee at £100 per dwellinghouse. Whilst this is an improvement, it is important to note there is still a sizeable amount of work required from authorities in relation to prior approval and this has grown over time as the various rights and regulations have been amended. This means there has been, and still potentially will be, a detrimental impact on local authority resources from PDR, further hindering the ability of planning departments to work proactively in positively shape their places. We are concerned that these resourcing issues, coupled with issues like the former lack of a need for proper floorplans to be submitted through the prior approval process, have created a lack of awareness in some authorities about just what has been implemented in some PDR schemes.

 

There has been a strong negative impact from PDR in terms of developer contributions and provision for the support of infrastructure and services. Whilst the potential loss of affordable housing mentioned above is open to debate in terms of how many of these schemes would or would not have gone ahead had they all required full planning permission, these schemes are development which can cause potential impacts, particularly on local green and social infrastructure (physical infrastructure needs are potentially more similar between commercial or agricultural and residential use). Given the small space standards and lack of onsite access to outdoor space in many PDR schemes, access to green space and play space for children is a particular concern.

 

Some of these schemes have introduced large numbers of new residents to areas, putting strain on social infrastructure, as we have heard during our research in the cases of Crawley and Harlow, for example, where many vulnerable residents from other authority areas have been moved into converted office buildings and local health, social and police services have been impacted. Other schemes have seen large numbers of new residents placed in particular areas of towns that did not previously have high resident populations and lack green / open space and play space, with provision not being provided on-site in sometimes very large conversion schemes through PDR. The impacts on infrastructure are real, and in our 2018 study we calculated proper provision could cost about £27.5 million in our five case study local authorities alone.

 

In terms of any attempt to offset these additional burdens on local infrastructure and services, PDR has allowed little opportunity for local authorities to recuperate these costs or fund additional provision. The generally accepted position has been Section 106 developer contributions cannot be negotiated on PDR schemes, since the nationally defined PDR in effect are saying the schemes are acceptable in planning terms. That said, as with much else, there has been a lack of clear government guidance to authorities on this (particularly when PDR was first introduced for office-to-residential conversion) and in our research we have found some London boroughs who have negotiated developer contributions on physical infrastructure issues which did fall under the purview of the prior approval process. This was not even attempted by the vast majority of other local authorities.

 

In terms of Community Infrastructure Levy (CIL) payments, in theory if an authority has a CIL charging schedule adopted, they might seek payments from a PDR scheme. However, if the developer can show no new floorspace was created and the building was at least partially in use in its former use class before conversion for at least six months of the previous three years, then it is exempt from being CIL liable. The vast majority of PDR conversion schemes have thus avoided making any CIL contributions altogether.

 

In our 2018 research, we estimated the loss of planning gain from Section 106 payments and CIL contributions combined to have been about £10.8 million across our five case study local authorities over a three year period due to PDR for office-to-residential conversion. In our 2020 research, we found that 138 commercial-to-residential conversion schemes allowed via PDR alone (in eleven case study local authority areas over a three year period) had made contributions (via Section 106 or CIL) of just £174,607 in total. This is despite those schemes having created 2,818 new dwellings between them.

 

We concluded in our 2018 report that PDR seems to have been a fiscal giveaway from the state to private real estate interests, and this increased profitability we believe explains much of the uplift in the number of conversions seen since PDR was introduced for commercial-to-residential change of use schemes. The government does seem to have recognised the issue, with the August 2020 white paper proposing that a new consolidated Infrastructure Levy would ‘remove exemptions from it to capture changes of use through permitted development rights, so that additional homes delivered through this route bring with them support for new infrastructure’. There is, however, no further detail as yet as to when and how this might be implemented whilst the problem continues and could increase given the expansion of PDR under Class E to residential.[3]

 

 

Is the government’s approach to PDR consistent with its vision in the Planning White Paper?

 

Leaving aside the fact that the consistency of the vision within the government’s August 2020 planning white paper might itself be questioned, and beyond the small number of proposals directly related to PDR in that document (for example the idea its use might be expanded and that change of use to residential PDR schemes might be liable for infrastructure levy contributions), we do not believe that the government’s approach to PDR is consistent with the broader vision which seems to underpin the white paper.

 

In terms of the discussion about the revised role for local plans, with identification of growth, renewal and protect zones, it is unclear how these would work if large categories of development are outwith the scope of these local plans by virtue of being PDR. If there is to be less emphasis on case-by-case planning permission with the argument that plan-making becomes more important, then it seems strange that categories of development like commercial-to-residential change of use would be centrally defined and outside these new local plans. It would seem more consistent if local authorities had the control to define the acceptability of such change of use as part of their plan-making, with the associated proactive evidence base and community engagement which seems to be suggested in the white paper vision.

 

In terms of the discussion about the role of ‘beauty’ and good design in the white paper, the use of PDR seems completely inconsistent with this strand of the white paper vision. We have seen very few PDR conversions which have helped in the ‘creation of beautiful places’ with often poor-quality exterior design and little attempt at wider public realm improvements or placemaking. It is unclear how the design codes and guidance (‘prepared locally and to be based on genuine community involvement’) would apply to PDR. If they cannot be applied, then there is a large category of development for which they are not setting the rules at all.

 

 

What is the impact of PDR on the ability of local authorities to plan development and shape their local communities?

 

PDR has been highly detrimental on the ability of local authorities to plan development and shape their local communities. By definition, if something is permitted development then it is nationally defined as a form of development that is acceptable and therefore, at most, subject to checking against some pre-set criteria through prior approval (if subject to that). The principle of development is not subject to consideration, even though it is not always acceptable in relation to many commercial-to-residential and agricultural-to-residential schemes we are aware of. Without the power of ultimately refusing planning permission, and with a very narrow set of issues subject to prior approval rather than being able to take a holistic view, the influence and ability to negotiate improvements to schemes by a local authority is severely constrained by PDR.

 

In almost all cases, local plan policies cannot be applied to PDR schemes. The role of the local plan is undermined by PDR for significant development. The result is that authorities must be entirely reactive to them and are limited in their ability to proactively try to shape their location and form. This is in sharp contrast to development requiring planning permission and seems counter to much of the culture change agenda for a number of years associated with the shift from ‘development control’ to ‘development management’. This is also in contrast to other countries. For example, in the Netherlands we found that a concern to promote more office to residential conversions had led to an approach of asking local authorities to produce, in effect, supplementary planning guidance showing which significant office buildings they thought suitable for conversion and which were not – a more proactive planning approach.

 

We are also concerned about the government’s proposed amendments to the NPPF to make it much harder for local authorities to introduce Article 4 directions. The existing Article 4 directions covering use classes which have become Class E will fall away next year and it looks set to become much more challenging to introduce replacements. Following the unsuccessful attempts in 2014 by Brighton & Hove and Islington to introduce directions to cover their whole local authority areas in relation to office-to-residential PDR conversions, local planning authorities have been fairly restrained in their use of Article 4 directions. Our research published by MHCLG in 2020 found only 57 authorities using Article 4 directions for commercial-to-residential PDR and only ever for part of their area. It is unclear what problem the government is seeking to solve by amending the NPPF to make their introduction harder, and this seems to be an over-centralisation of an issue where there should be greater local authority control, if justified.

 

 

Is the government right to argue that PDR supports business and economic growth?

 

There has been a lack of rigorous analysis on the economic costs and benefits of PDR from the business perspective, and impact assessments from government have been lacking in detail. It does seem that greater freedom to change use between different commercial uses (including retail) could have benefits for business. However, we do not agree that PDR for commercial-to-residential is likely to have the same benefit and are perplexed by the government’s claims in their recent Class E to residential PDR consultation that it might “help support economic recovery”. Our research published by RICS in 2018 found that there were potential economic disbenefits from office-to-residential PDR related to still occupied office space being converted to residential use. During that research, we heard evidence of businesses forced out of their premises and unable to find suitable replacement space in both Camden and Reading. Market processes will not replace secondary quality office space with new secondary quality space, which can particularly impact creative, start-up and SME type industries.

 

There certainly has been some positive reuse of vacant and under-occupied commercial space through conversion to residential, but there has also been some loss of employment space which would still be productive in use as such. There can also be knock-on impacts from introducing residential use in some formerly commercial units in turn reducing the attractiveness and thus viability of their neighbouring units as commercial space. The proposals for the Class E to residential PDR at a time when future demand for commercial space is unclear due to the ongoing pandemic is particularly concerning, given how much easier it is for space to go from commercial to residential use than the reverse. One of us (Dr Clifford) is currently leading new research with colleagues at the UCL Centre for Advanced Spatial Analysis (CASA) to estimate the impacts of these proposals. This work is ongoing but early indications suggest up to 30% more buildings could be eligible for commercial-to-residential PDR change of use than under the rights which existed on the predecessor use classes being replaced by Class E. Indeed, it is difficult to see many spaces in a town centre which would be ineligible for conversion to residential under these proposals, which are a significant expansion of the exiting rights and call into question the ability to implement town centre regeneration strategies and policies which local authorities and their business partners may have developed. We are aware of concerns about commercial-to-residential PDR from a number of business groups, including Business Improvement Districts and Local Enterprise Partnerships. A more plan-led approach could help secure greater economic benefit from proactively managing change of use rather than relying on reactive PDR proposals which local authorities are largely powerless to steer.

 

 

What is the impact of PDR on the involvement of local communities in the planning process?

 

Much as PDR reduces the ability of local authorities to properly plan and shape development, so it also almost completely inhibits the involvement of local communities in the planning process. When defined nationally, the type and extent of PDR cannot be influenced by local or neighbourhood plans, and so undermines a plan-led approach and any engagement of communities into the preparation of those plans. Similarly, where there is a prior approval process, unless communities have relevant information directly linked to the technical issues which authorities can consider, then any comments they have to make will not be taken into consideration. The scope for involvement at both plan-making and planning permission by communities is reduced by PDR (even though the scope of PDR is now so widely defined that some quite significant developments will be happening through it). There is a risk that public confidence in the planning system could be undermined by there being so much development not subject to any meaningful local community engagement either directly or through local democratic processes, as well as an inability to act in response to local preference or knowledge. We are aware of a number of local councillors and civic societies with concerns over PDR for large-scale and change of use development and the lack of ability of meaningful community engagement and local democratic process.

 

 

Should the government reform PDR? If so, how?

 

We have been particularly concerned with PDR relating to change of use to residential. We do not believe that anything creating new dwellings should be covered by PDR and so our recommendation here would be that PDR should be reformed by removing such development from its scope altogether. Planning permission under the current approach used in the UK does have some advantages, one of which is the ability to take a holistic view on the merits of a scheme, considering its principle as well as the proposed design and whether together this creates accommodation of sufficient quality. It is difficult to replicate this under PDR given the principle of the development is already established (even though in some cases it is highly contestable these developments are even appropriate in principle) and given the complexities of trying to maintain quality on the basis of a pre-set checklist of prior approval considerations.

 

If the government does not remove such commercial and agricultural to residential conversions from the scope of PDR, then we believe further reform is required to introduce safeguards where possible. We do note that there has been some progress from government, for example in relation to compliance with nationally described space standards and the requirements for submission of proper floorplans as part of the prior approval process, but believe further issues remain. Reform should therefore:

 

PDR for change of use to residential is moving us away from the tradition of case-by-case planning permission towards a more ‘as of right’ approach more typical of zoning type planning systems, without any of the planning benefits zoning type systems constraints may bring. Prior approval does not presently offer the complex and detailed safeguards and pre-set standards usually associated with zoning systems. As an example, in the Australian state of Victoria, there has long been a detailed ‘ResCode’ with specific requirements, standards and guidance relating to new residential dwellings being created through their zoning-based planning system and a recent update focuses specifically on apartments.[4] If PDR is a taste of a more ‘as of right’ than discretionary planning system (as the government seems to have indicted a preference for in the white paper), then it also shows the need for much more rigorous safeguards of design quality of standards likely to support public health, wellbeing and sustainability than has been the case so far through the prior approval process.

 

 

Conclusion

 

The adaptive reuse of buildings can have positive impacts, for example in relation to sustainability given the embodied carbon and implications of construction processes. Given the housing crisis, there is an argument for some genuinely surplus commercial space being converted to residential purposes. However, we are not convinced that PDR for commercial-to-residential change of use has been the right way to achieve that and believe that the negative consequences of this deregulatory policy from government outweigh the positives in England. Not every PDR scheme has been poor quality, however evidence from our research would suggest that a majority of the dwellings created through change of use PDR are poor quality in terms of their design and potential impact on the health and wellbeing of residents. Given that change of use from commercial-to-residential was and is possible under full planning permission, we would question the necessity of PDR for this type of development at all.

 

In our 2018 research, we found that a similar rate of office-to-residential conversion (per capita) was achieved in the Netherlands via government policy, focussed less on planning deregulation and more on a proactive approach which included preparing and sharing best practice around adaptive reuse and developing supportive local plans. We also found that prior to the introduction of PDR, the rate of granting planning permission in England for office-to-residential conversion was similar to that for all types of development (87% of the cases we examined from 2009-2013). This was not acknowledged in the government’s impact assessment accompanying the 2013 introduction of PDR for office-to-residential conversion and which contained a number of highly questionable assumptions.[5] Further, we note that the 2012 version of the NPPF set a generally supportive policy context with a requirement that planning policies and decisions ‘promote and support the development of under-utilised land and buildings, especially if this would help to meet identified needs for housing’ but the impact of this in practice never had the chance to be properly tested due to the introduction of PDR.

 

This all combines to call into question whether suitable commercial-to-residential conversion could have been supported and promoted through planning permission to achieve the positives of this type of development whilst avoiding the large number of negatives associated with the PDR approach. The further expansion of PDR for more commercial buildings through the recent Class E to residential announcement is deeply concerning both because of these previous issues with permitted development for similar change of use but also because of the timing in relation to the pandemic making it seem an ill-considered time to reduce the ability of authorities to plan for recovery positively and proactively.

 

 

April 2021


[1] 

Clifford, B., Ferm., J., Livingstone, N., Canelas, P. (2018) Assessing the Impacts of Extending Permitted Development Rights to Office-to-Residential Change of Use in England. RICS Research Trust. https://www.rics.org/globalassets/rics-website/media/knowledge/research/research-reports/assessing-the-impacts-of-extending-permitted-development-rights-to-office-to-residential-change-of-use-in-england-rics.pdf

Clifford, B., Ferm, J., Livingstone, N., & Canelas, P. (2019). Understanding the impacts of deregulation in planning: turning offices into homes? Palgrave Macmillan. https://link.springer.com/book/10.1007%2F978-3-030-12672-8

Clifford, B. (2019). Healthy Homes? Thirty Examples of Permitted Development Conversions. https://www.ucl.ac.uk/bartlett/planning/sites/bartlett/files/tcpa_room_the_breathe_examples_-_clifford_et_al.pdf

Clifford, B., Canelas, P., Ferm, J., Livingstone, N., Lord, A. and Dunning, R. (2020) Research into the quality standard of homes delivered through change of use permitted development rights. Ministry of Housing, Communities and Local Government. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/902220/Research_report_quality_PDR_homes.pdf

 

[2] MHCLG (2021). ‘Live tables on housing supply: net additional dwellings’ at https://www.gov.uk/government/statistical-data-sets/live-tables-on-net-supply-of-housing

[3] MHCLG (2020). Planning for the future white paper, at https://www.gov.uk/government/consultations/planning-for-the-future/planning-for-the-future

[4] 

Victoria State Government (2021). ‘Apartment Design Guidelines for Victoria’ at  https://www.planning.vic.gov.au/policy-and-strategy/better-apartments/better-apartments-design-standards

[5] DCLG (2013) ‘Relaxation of planning rules for change of use from offices to residential: Impact assessment’ at  https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/207922/Relaxation_of_planning_rules_for_change_of_use_from_offices_to_residential_-_impact_assessment.pdf