Balancing the Need for Housing Supply with Need for Office Space

Elli Thomas explains the embarrassment of riches pressuring London: growing demand for housing is creating competition for the commercial and offices spaces that drive the city's economy.

While adding additional supply is critical to the affordability of the city, Thomas acknowledges, existing office space is critical for long-term economic growth. Calling on research by the Centre for Cities, Thomas picks a side in this contest, arguing that "as a result of specific national policies, the ability of cities to maintain an appropriate balance between residential and commercial space is under threat."

The policies in question relate to country's Permitted Development Rights (PDRs), which allows changes of use without full planning permission. "In May 2013," explains Thomas, "[PDRs were] extended to include the conversion of underused office space to residential..." Despite reassurances that the policy change wouldn't lead to a spike in planning applications, London's PDR applications shot up in 2014, and local authorities are having trouble resisting the loss of commercial space to new housing.

The problem, according to Thomas, is that the PDR policy will be beneficial to many parts of Britain, but now a fast-growing, high-demand city like London.