London neighbourhood. Skitterphoto used under CC0 licence
The government’s deregulation of planning policy is frustrating the ability of urban planners to tackle London’s housing crisis and promote employment opportunities in its neighbourhoods, warns a new report from LSE.
Changes to Short Term Letting (STL) rules and new Permitted Development Rights (PDR) mean that local needs are being crowded out by market forces, according to the research.
From 2015, the loosening of regulation around STL allows residents to rent out part, or all, of their property for up to 90-days in a year. In addition, new PDR allow for offices to be converted into residential homes without the need for planning permission.
Researchers spoke to planning officers from the four inner London boroughs of Westminster, Islington, Camden and the Royal Borough of Kensington and Chelsea for the report.
The planners highlighted that it was almost impossible to enforce STL rules. As a consequence, many homes – especially in popular central London neighbourhoods – are being used exclusively for the purposes of short-term letting (STL), through a series of platforms such as Airbnb.
This potentially removes permanent housing stock in these areas and changes the neighbourhoods in terms of shops and facilities, which now cater more toward tourists rather than residents. Many residents also complain of increasing nuisance, of all night parties, constantly changing tenants and a decrease in community cohesion.
In addition, the Greater London Authority has estimated that, as of March 2016, 1.6 million square metres of office space – much of it occupied – had been approved for conversion to residential accommodation via PDR. Frequently, this is the type of space needed to foster small businesses which rely on cheaper accommodation.
While these conversions will provide housing, the council planners reported that much of the new accommodation is either small and of poor quality or aims at the luxury end of the market – neither of which truly addresses London’s housing needs.
Both trends are driven by the substantial profit margin between permanent housing and vacation rentals and between office space and residential housing. STL, for example, can be up to three times as profitable as a standard tenancy in London. In Islington, an ‘average’ one bedroom flat that would rent normally for £49 a day could go for as much as £150 per day as a short-term let.
Dr Nancy Holman, Associate Professor of Urban Planning and co-author for the report, said: “Many planners have attempted to challenge these reforms. But they are being put in an impossible position by having important decisions, which would have been subject to local discretion, taken out of their hands.
“We have to ask what kind of Capital we want – one where important planning decisions are being driven by profit or by the fundamental needs of local communities.”
Alessandra Mossa, researcher and co-author of the report, said: “Some of these changes to regulation are counterproductive and simply exploit the rhetoric of London’s housing crisis without actually providing a sustainable solution to it.”