The Future of Living
CMS Planning Group
23 May 2018
As the housing market radically adapts to meet demand, lifestyle and generational requirements, CMS has been busy helping our clients deliver significant projects across all housing types from student, multiple occupation, build to rent, market and affordable housing to retirement and extra care housing. CMS are at the heart of the future of living.
A much wider range of housing models is now being created with increasing opportunities for developers and investors to target specific needs with tailored products.
As the planning system is traditionally slow to respond to innovation in the residential market, much of our work has been on advising on how all of the new and more traditional housing types can be best future-proofed against demand, policies and risks.
Our Future of Living guide considers the key planning considerations that will help you to navigate the planning system and secure an optimal consent for whatever shape the future of living takes.
Use Classes: Where Does Your Product Fit?
The Use Classes Order is unfit for purpose, with just one use class (C3 or Class 9 in Scotland) for the majority of residential products. This leaves many student, shared, serviced, retirement and other more innovative accommodation products classified as ‘sui generis’. Sui generis consents afford little flexibility if demand falls away. Understanding how your product is classified is critical. Important characteristics include: the level of self-containment, the length of occupancy and the amount and type of service or care
Student: Student Accommodation, Houses in Multiple Occupation/ Shared Housing.
Existing Flexibility and Opportunities Outside C3/Class 9
We can test whether operational planning permissions can deliver a specific operating model. Some C1 (hotels) permissions – Class 7 (hotels and hostels) in Scotland – can deliver longer term rented models. Maintaining a degree of guest transience will help, along with a range of other physical and operational
Young Professional: Shared and Co-Living, Micro-Apartments.
Evolving Policy Position
Emerging national policy supports new models such as Build to Rent, and in London there is specific policy support for shared and co-living models. Overall, the policy landscape is inconsistent and many products (including in the retirement sector) continue to operate in a policy black-hole. Understanding opportunities or restrictions of local policy will help inform where you invest and shape your operating model.
Key Policy Issues related to housing needs and land supply
Housing need and land supply remain crucial issues, and identifying the specific need for each class of product will assist in the growth of these sectors. Design standards and density policies must also be considered, and more innovative models may unlock sites that may otherwise be unworkable. How to assess the viability of different models is also gradually being reflected in policy and guidance, for example recognising the longer term economics of build to rent housing.
Established Professional: Private Rented Sector/Build-to-Rent, Serviced Apartments
New planning policies identify new tenures of affordable housing to suit different types of accommodation, for example Build to Rent and purpose built student accommodation. Some guidance and practice goes further to specify management and other requirements. In London, non-compliance may prompt intervention by the Mayor. In the absence of policy, there may be scope for flexibility.
Levy (CIL) & Planning Obligations Understanding the potential planning obligations and the appropriate level of CIL, and whether innovative models are subject to CIL (or subject to CIL at a lower rate) will be important. The use of alternative mechanisms, such as clawback periods and deferred payments, are becoming increasingly common for innovative models.
Exit Strategy: Delivering a Marketable, Investable and Financeable Product
One of the key drivers for your approach will be facilitating a clean exit strategy. More innovative models may represent longer term investments, but preserving options is crucial. For example, retaining the ability to switch to a conventional residential use in the event that demand for a specific product reduces may provide more flexibility in the event of a sale.
Retirement: Retirement Housing, Extra Care Accommodation
Any innovative solution will require an assessment of potential enforcement risk and the steps you can take to minimise that risk. Understanding the approach
taken by a particular authority, including enforcement for similar models, will help assess risk and the use of lawful development certificates can help set the
parameters and assist in getting funders comfortable with the product.
The CMS Planning Group have been at the forefront of the emergence of the student accommodation, Build to Rent and retirement sectors as these industries have developed and begun to offer a wider range of models. Our objective is to ensure your schemes are future-proofed against demand, policies and risks. We advise developers, investors and funders on a number of innovative quasiresidential models.
If you would like to explore these emerging concepts, whether or not you have a scheme in mind or you have a development which is already progressing, we would welcome the opportunity to speak with you.