Can Office Conversions Ease London's Housing Shortage?

As a property buying binge by the global super-rich makes parts of London "more international, more expensive and more empty," the government is looking to ease the conversion of offices to residences. Can this ease the city's housing shortage?

2 minute read

April 2, 2013, 11:00 AM PDT

By Jonathan Nettler @nettsj

London is suffering from a chronic housing shortage that is driving up prices, and driving out seemingly everyone but the affluent from large areas of the English capital. Ruth Bloomfield examines one potential solution being considered: a controversial initiative by the British government to ease the conversion of office spaces to residential uses by skirting the usual approvals process.

"At present," says Bloomfield, "this legal loophole can take many months to jump through. Not only is time a factor but in the British planning system, each case is dealt with on its own merits. Local councils can—and regularly do—deny permission on the grounds that they do not support the loss of office space or feel the location is suitable for housing."

"Not everyone is thrilled by the looser regulations," she adds. "London's mayor, Boris Johnson, wants central swaths of the capital, including the financial district (known as the City or the Square Mile), the South Bank and the West End, completely exempted from the new rules, and has lodged an official complaint with the government."

Furthermore, as the mayor argues, this initiative may only exacerbate the lack of affordable housing in central London. As Sarah Lyall explains in an article in The New York Times, the increasing exclusivity of London's prime areas is creating virtual ghost towns as international buyers snap up trophy properties that they rarely inhabit.

"Paul Dimoldenberg, leader of the Labour opposition in Westminster Council, said the situation had reached a 'tipping point' and was starting to concern lawmakers."

“Some of the richest people in the world are buying property here as an investment,” he said. “They may live here for a fortnight in the summer, but for the rest of the year they’re contributing nothing to the local economy. The specter of new buildings where there are no lights on is a real problem.”

Thursday, March 28, 2013 in The Wall Street Journal

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