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Tim Dwelly's live/work blog

Why do so many planners want to increase the proportion of live/work units that is used for work?

Here's a completely typical scenario. A live/work developer takes a proposal for a scheme to planners in a pre-application discussion. The developer suggests 30 units on a previously underperforming employment site. Each unit is down to include around 30% workspace.

'But that would mean a mainly residential use,' complains the planner. 'If we are to consider this as live/work you will need to make sure the units are at least 50% workspace.'

There's one killer reason this is silly. It's called viability. You simply can't get a residential mortgage on a live/work unit with 50% workspace. Now that may not mean much to the planner. But to a live/worker it says: don't buy. That's because very few will want to commit to a property on a commercial mortgage (15 years and often at least 2% higher rates than residential mortgages). And they also know it will be harder to sell the property on later for the same reasons. We've done the research. There 's more on this subject on our liveworkhomes website here. So there's one pragmatic response that can be made to the planners. But I have wider concerns about the 'percentage floorspace' obsessives. Not to put too fine a point on it, do they understand basic economics?

I have yet to hear a Chancellor deliver a budget boasting that the UK has increased its square metres of employment land and is therefore a stronger economy. What matters surely is GDP and  how successful businesses are. So on a live/work scheme, the employment contribution is all about the number of businesses on the site, their turnover and their skills base. Those factors are not influenced a great deal by how big a proportion of the live/work unit is designated for B1 office use.

Another worry I have is that too many people working in the public sector know little else but the world of commuting as employees. They can easily fall into the trap of measuring a business's (or employment site's) success by how many people work there. But that doesn't equate to a sustainable local economy. What matters is the creation of high value business with the potential to grow (in turnover not just size of building).  

Remember that the alternative to live/work is often this: single employer, large building, lower paid workers, all commuting in. That may please planners who feel more comfortable with this kind of 'pure' employment (see my last blog on comfort zones). Yet there are huge risks in this approach. It is putting all the eggs in one basket. What if the business fails? The whole site stops contributing employment at all and often remains empty for ages until another business turns up. Remember the Siemens silicon chip facory on Tyneside closing? The whole regional economy was devastated when just one company pulled out. More recent examples include Rover.

And in any case, does your town/city really benefit from having a few guys on fork lift trucks zooming around in a warehouse on £6 an hour? Manufacturing of course is increasingly off to China and India. What you need most today is businesses based on specialist knowledge with sellable skills choosing to locate in your area. 

Local authorities' economic development officers often get this. Almost anywhere you go today you will find local economic strategies calling for these things (tick the box when you read these words): 'knowledge economy', 'creative industries', 'clusters', 'networking'. But how to make this happen?

Well that's exactly what a live/work cluster can deliver. And live/work businesses are less prone to economic shock precisely because they have lower costs - they don't have a separate office. They often use subcontractors flexibly when the work is there, so don't need to let staff go if times are hard. And they have more time - they don't spend a working day each week commuting.

It's important that planners come down from their helicopters and stop looking at land from a google earth point of view. The economy is not driven by employment land (please someone tell them!). Most B1 work is not done on B1 land.

And it's important they get out more to understand the real world of micro business. Turnover can depend on onlines sales. Businesses can grow by subcontracting rather than employing. Indeed the DBERR (formerly DTI) told us this at our last national conference. 'The more people who are self employed and set up businesses, the better for UK plc' was the message. Number of staff - like amount of floorspace - is not the point any more.

It is however fair for planners to resist schemes where the workspace is so small that it provides little more than a small spare room. If someone only needs that kind of space they don't need a live/work unit - they can just work from home. Live/work is about expanding home based businesses whose type of work (eg fashion design) or growth (eg 2/3 people when the work is flowing) means they need a more professional workspace with separate access.

My own view is that a decent workspace proportion for a live/work unit is around a third. That's usually large enough to provide space for at least three people to work comfortably. But it's also comfortably under the 40% mark at which many mortgage lenders say no to a normal mortgage.

Whatever is locally agreed, what matters most is the creation of a cluster of dynamic high value businesses that can benefit from being next to one another. It's not floorspace that matters, it's the local economy stupid...

 

 

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