COMMENT The planning policy uncertainty around Westminster’s mixed-use growth looks like it is finally being settled.
The city council, in response to the planning inspector’s recommendations on how the draft City Plan should be amended, has agreed it will no longer seek accompanying on-site residential or payments towards the affordable housing fund in lieu of this.
The tariff was designed to reduce the risk that too much office space would dwarf residential space and harm the mixed-use character of the Central Activities Zone – which is part of its attraction and a factor in its success.
The inspector effectively made the simple observation that if the council wants more commercial development in the CAZ, a tariff works against this. Furthermore, the money raised by the tariff would have been spent across the whole borough, so if the purpose of raising the money was to make sure that the CAZ had a mix of residential and office uses, then the policy wasn’t achieving that.
Given the gain in residential floorspace from offices over the previous plan period, it would appear the inspector did not see that the valued mixed-use character was being put at risk.
So after decades of shoe-horning residential into office-led developments and protracted debates over the viability of a payment in lieu, commercial development is no longer required to consider these.
None of this deals with the structural need for more affordable homes in Westminster. However, the need for employment space is now meaningfully being incentivised.
“Where tenants want to be”
Whatever your perspective on working from home, pre-Covid there was an acute shortage of West End office floorspace and this is where many tenants want to be.
Also of note is that there is no requirement for affordable workspace. Although this remains an option when seeking to provide further public benefits, in addition to commercial floorspace delivery alone.
The importance of affordable workspace to London, especially in the CAZ, has been seen with the recent approval of British Land’s 5 Kingdom Street by the mayor. In the past, the focus was on what residential benefits were being delivered, with little appreciation for how much gain there would be from the business rates that would be paid in perpetuity.
Westminster’s rates retention is a complicated business as these receipts are split with others. But the point is that the CAZ now seems to have due recognition as London’s engine room.
Some previously permitted applications that have not yet been implemented may well look to submit fresh applications. However, care needs to be taken because aside from the political dimension, in some circumstances the public benefits of those applications included residential floorspace or payments in lieu that were fundamental to their acceptability.
For future developments, while there is no tariff or residential requirement, the focus will inevitably shift towards other matters. Architecture and context will undoubtedly remain paramount but climate change will also rightly come to the fore.
The modifications to the draft City Plan are now open to consultation until 18 January 2021. Subject to the planning inspector’s following report, the council intends to adopt the draft City Plan by early spring next year.
Will Lingard is senior director, planning at CBRE
