Rewarding meantime use on major development sites

It can’t be often that a new blogger gets requests for pieces on a particular topic. One of the commentators on my piece about struggling town centres asked for some thoughts on meantime uses.

Managing change in a dense urban area presents real challenges and can be an arduous, cash- and will-sapping process, even if the scheme is backed by means to compel the sale of land or property to the proposed developer. In the time between the first property and the whole development area being acquired there is a growing group of properties, homes, shops, offices or factories that could end up as vacant and a blight on the neighbourhood. Not a good situation as planning consent is negotiated or investors and end users are found.

The first thought is to keep existing occupiers in place as long as possible – unless the use is in itself a negative factor on the neighbourhood – because it keeps jobs and activity in the local economy and any income received helps the project budget.
Where residential property is acquired there are two other ideas. If the accommodation is in a lettable condition it could be used as temporary accommodation by the council or a housing association.

A further option is the varieties of secured by occupation, the ‘property guardian’ schemes, where short life properties are licensed to young people live in them at nil/zero rent in return for protecting the property by occupation. In many cases the agents for such schemes are able to fund the costs of making properties habitable for the period of occupation. Each of these has risks and critics; neither is a general solution but a tool in the box.

‘The risk to the developer is that if the pre-development period is lengthy then temporary uses eventually become seen as permanent and there is a legal wrangle to secure possession, pitting the rapacious developer or uncaring council against socially good things’

For other classes of property the choices are more limited; one site close to home is used by a company which hires London buses for weddings and parties – they needed a secure compound adjacent to an office. Retail premises can be attractive to community groups for various purposes, from temporary drop in centres to charity shops. The other users of cheap and lower quality space are artists but there isn’t an endless supply of people wanting studio space. A recent initiative has been to create temporary workspaces for micro-businesses, just a good wi-fi system, better coffee and informal spaces for chance meetings.

Fundamentally, the risk to the developer is that if the pre-development period is lengthy then temporary uses eventually become seen as permanent and there is a legal wrangle to secure possession, pitting the rapacious developer or uncaring council against socially good things. I can well understand that point and there needs to be careful thought given to this. Long-term empty buildings are a blight on everything around them, I know my neighbourhood has had buildings empty for 20 years – more if you include the empty part-Norman church.

There are a number of exemptions to business rates that help mitigate the losses but nothing that incentivises meantime uses.

So how to solve the conundrum?

Perhaps it could be worth developing the concept of the property guardian scheme, merging it with the old short life housing association to create a community interest company (CIC) to operate properties and incentivising developers to work with that CIC that is tasked with maintaining occupation – creating activity and generating income until the building is required. There would need to be careful thought to the way licences to occupy are created; they would have to be subsidiary to the title that the CIC has in the properties. This needs collaboration with a range of regulators from English Heritage to environmental health to ensure the safety of occupiers and users, while not precluding future development.

In terms of generating fiscal incentives, there is scope within the rating system to rebate business rates for charitable activities. Also, just as there are tax reliefs available for abnormal development costs, it would be possible to allow relief against tax for the costs of enabling meantime uses or for any income from that source to be discounted from calculating taxable profits.