The government’s reported plans to merge high street use classes raises questions about the use class system as a whole.
After all, the housing crisis has triggered an increase in products designed for those not well served by the current market.
As well as established forms of specialist housing, a variety of purpose-built residential accommodation is now available, including micro-apartments, build-to-rent (BTR) and co-living.
This variety is causing problems for our planning system, which is not known for being quick to adapt to changing circumstances.
Each use class carries a number of benefits and obligations. For example, C3 dwelling houses have a wide range of permitted development rights (PDR) not available to the other categories, but schemes are also expected to make contributions towards affordable housing, education and types of infrastructure. C2 developments do not have the same PDR, but are not expected to provide the same level of contributions. The problems come when it is not clear which category a particular development falls into.
Extra care housing can either fall within C2 or C3, depending on the level of care provided. But councils take an inconsistent approach as to which side of the fence a scheme falls on, causing problems because the viability profile of a C2 development is very different to C3 housing. Expecting an extra care development to make affordable housing contributions can result in the development not going ahead.
Some new entrants to the market are even more problematic. How should you classify a co-living development? Would it be C4 or sui generis? Could it qualify as a hotel? Are apartments that are let through Airbnb C1, C3 or without classification? Where should the line be drawn between a hotel (C1) and a hostel (sui generis)?
As housing types become more diverse, so do the economic models on which they are predicated. A BTR block of flats has a different viability profile to the same development when sold as market housing. Despite this, these schemes can easily end up being lumped together and treated in the same way for the purposes of section 106 requirements and CIL.
Persuading councils to deviate from their standard position often requires a sustained education campaign, frequently involving open book viability assessments and case studies from other councils or jurisdictions. While these campaigns do appear to be bearing fruit, progress is slow. Maybe it is time to ask whether the use classes order is still fit for purpose. Perhaps a more flexible way of thinking could be the order of the day?
Nicola Gooch is a planning partner at Irwin Mitchell