Co-living is a buzz phrase in the London residential market. Heralded as one of the solutions to the housing crisis, the shared amenity space and small flats are believed to be in line with what millennials really want. A merging of student accommodation, hotel and build-to-rent, all in one.
But there is one big problem – getting consent for co-living is almost impossible.
Although the model was essentially given the green light in the draft London Plan, no scheme to date has been granted permission by the GLA.
Existing projects such as the Collective’s Old Oak Common, the largest co-living scheme in the world, in Willesden Junction, NW10, were brought about by flipping use classes, essentially avoiding GLA sign-off.
Other schemes have also been granted by making minor material amendments, or S73 applications, which are not referable to the mayor. Those that have gone down the co-living route, and therefore past the mayor, are yet to get approval.
So if co-living is to truly get off the ground, what is it that the new emerging asset class needs to do?
Watch the video below to find out, then scroll down for more.
Square things with planners
Those in the co-living sector are quick to point out what co-living isn’t, and that’s micro-homes – a major concern of planners.
Patrik Schumacher, principal at Zaha Hadid Architects, recently said millennials don’t need living rooms and that minimum space standards were shutting young people out of the housing market.
He said: “For many young professionals who are out and about networking 24/7, a small, clean, private hotel room-sized central patch serves their needs perfectly well.”
But the Collective’s director of planning, Ollie Spragley, insists statements like Schumacher’s are unhelpful.
“This really doesn’t help our cause. We are trying to get away from just small rooms,” he says.
“It’s just not what co-living is or should be. It’s a common misconception.
“Yes, the rooms are on the small side, but it’s the added communal amenity space that sets it apart.”
Operators like the Collective are trying to create a community so that your private room is just where you sleep and most of your time is spent socialising and interacting with other residents, whether that be in the cinema room, games room, co-working space or library.
How small can they go?
The GLA strengthened its policy of 37 sq m (398 sq ft) for minimum space standards for traditional C3 housing, halting the progress of micro-homes proposed by the likes of Schumacher and U+I.
However, co-living restrictions aren’t likely to be as stringent, with the draft London Plan saying there are no minimum space standards for “large-scale purpose-built shared living”.
It says units should be “appropriately sized to be comfortable and functional for a tenant’s needs and may include facilities such as en-suite bathrooms and kitchenettes.”
However, what “appropriately sized” means is up for debate.
Take a look inside U+I’s Microflats
It is clear that many believe the smallest rooms at the Collective’s Old Oak Common scheme, with some offering just 8.5 sq m of private space, are too small. The Collective’s next iteration, a 706-bedroom scheme near Canary Wharf, E14, will nearly double this, with a minimum of 16 sq m of private space. The 21-storey tower is due to complete early next year.
“We have learnt a great deal at Old Oak – what’s worked, what hasn’t – and finally we are getting some traction and understanding from the GLA” says Spragley.
The GLA is due to tour new mock-ups of the Canary Wharf scheme next month. It is eager to understand what the product will look like and what the Collective has learnt from essentially testing the model at Old Oak.
Spragley says: “We have done a very lengthy exercise on space standards. We believe 16 sq m should become the minimum.
“If you look at the London housing design guide, or the architect’s handbook before that, about how much space you should allow in front of a wardrobe and apply it to a 12 sq m room, some of them work, some of them don’t. At 14 sq m, you’re getting a bit closer. At 16 sq m, they all work.”
Get the design dynamic right
Of course, co-living won’t work for everyone but for a tiny percentage of the market it may be an attractive offer. And, for Spragley, it’s the communal, amenity space that sets it apart.
“Depending on the size of the building, we’re looking at between 3 to 5 sq m of amenity space per person. If you’ve got 1,000 units, then 3 sq m may be enough. For a 250-unit scheme, you may need 5 sq m.
“We have learnt a lot about room design at Old Oak Common. There are certain aspect ratios that work well. Making rooms ever so slightly wider makes a world of difference” he says.
Find a workable affordable housing agreement
Around affordable housing it says that because co-living does not meet minimum space standards and generally consists of bedrooms rather housing units, “it is not considered suitable as a form of affordable housing” and “therefore, a financial contribution is required.”
This may appear to be black and white but on closer examination much is still grey.
James McAllister, partner at GVA, says: “A majority of boroughs will always seek affordable housing to be delivered on site, regardless.
“The delivery of conventional affordable housing is, of course, one of the key, if not most important, manifesto pledges of the mayor (Sadiq Khan).
“He’s had a look at it [co-living] and he’s clearly yet to be convinced.”
McAllister adds: “Co-living developers have asked if affordable housing can be provided in the form of on-site, discount market rent co-living rooms. Lawfully, you can do that within the statutory definitions of affordable housing. However, it appears the GLA and some local authorities are not yet willing to accept that form of affordable housing.
“Given the critical need for affordable housing, we should question why we can only deliver it in a ‘conventional’ way. Well-designed and well-managed co-living developments is one alternative and its important social attributes are often overlooked” he says.
Due to the sector’s infancy, different governing bodies appear to be wanting different things, with some local authorities on board and others resisting.
In Newham, east London, one such developer looking to enter the market backed away after protracted negotiations with local discussion and the GLA failed to progress.
Apeiron Capital, which submitted an EIA last August with plans for around 360 co-living rooms, recently put the site up for sale.
Chief executive Vojkan Brankovic says: “We are here to cater for a gap in the market. Having researched the local area, Stratford had a total of 3,600 homes to rent in 2016 and just 1% of those were studios. If we build what we propose, there will be tremendous demand.”
Brankovic adds: “People can’t afford anything of any size, as we would have to charge a lot more.
“The crux is this; if we build units of 37 sq m we would have to charge £1,800 per calendar month. But if we build at 25 sq m we can let out at a much more affordable £1,200-£1,400 per calendar month all in.”
Others argue that although it may not be contributing what people might think is officially affordable or social housing, it is still a form of more affordable housing as it’s much more attainable. Fees start at £800 per month at Old Oak Common, which includes all the add-ons, a gym, spa, library, co-working space, cinema, various classes and all utility bills.
Bring on board proper management
GVA’s McAllister says a lot of players looking to get into the sector don’t plan on managing it themselves.
“So then you ask: ‘What’s the legacy? What’s the whole management strategy?’” he says.
Understandably, this is a huge issue for the GLA to nail down before giving the sector the green light.
The Collective’s Spragley says: “We speak to so many local authorities and their first question is: ‘What if you sell the site? What happens with a different management or structure in place?’”
Conditions will need to be put in place as part of planning consents, with an operations management plan. This is a legally binding document and would have to be updated whenever the management plan changes.
“If we sold the site and didn’t keep hold of the management, the new owner/operator would need to submit a new management plan essentially” Spragley says.
“We want to work with other like-minded operators. The last thing we want is developers coming into this space, giving co-living a bad name.
“We are looking at starting a group with other operators, similar to what the BPF does for housing more widely. We need a common voice for the sector all working towards the same goals.”
Co-living may evolve into a crucial element of London and the UK’s residential market but for now it still has several challenges to overcome in order to become a truly recognised alternative for renters.
Co-living in different forms
Although co-living has been given the green light in the draft London Plan, the GLA has yet to approve a single scheme. So how has co-living evolved?
In short, co-living schemes are working under sui generis use classes and have been flipped from hotel or student housing consents, via section 73 or minor material amendment applications, which are not referable to the mayor.
Co-living providers are also choosing to operate short-stay products, essentially serviced-apartment planning consents. The Collective is launching its short-stay offering in Canary Wharf to give new options as to how to access this new way of staying in cities.
The Collective’s Ollie Spragley says: “As we expand, it’s a way of getting boroughs on board with an understanding.”
GVA’s James McAllister believes the sector is still some way off getting that co-living stamp of approval from the mayor’s office.
“I believe the first purpose-built co-living development that we will see go through and pass the mayor will be part of a larger mixed-use development with multiple buildings perhaps providing some conventional residential and an element of co-living as part of it – and in one where you can deliver conventional affordable housing on-site.”
WeLive, the offshoot of co-working provider WeWork, is also set to enter the London market, again most likely via the serviced-apartment route.
To send feedback e-mail paul.wellman@egi.co.uk or tweet @paulwellman eg or @estatesgazette
