02 July 2020
A personal view of the evolving role of real estate in a world of technological, social and business change, by Richard Pickering, Chief Strategy Officer, UK.
In the late 1940s, our country, economically hobbled by the war effort and physically scarred by the Blitz, cautiously dared to look ahead. The horrors of the previous years had started to fade, and people with vision began to dream about how a better world might emerge from the ashes. The UK needed to be rebuilt, but what shape would this take? How could we address the ills and mistakes of a previous generation? For the first time a codified national framework was put in place, both to regulate development and to stimulate the growth of new places. This was the genesis of our modern planning system. Now, in the midst of one of the most significant social upsets in the lifetime of many in the UK, people are again tentatively looking forward. The ills of the past are similarly rooted in the over exploitation of resources, social inequalities, and a failure of our cities to deliver against the needs of their inhabitants. There are also a series of novel factors, such as the legacies of social distancing and the game changing impact of the internet and cloud computing. As whispers build about a new tomorrow, is now the time once more to reinvent our planning system? The Government thinks yes, and yesterday Boris Johnson announced the ‘most radical’ reforms in a lifetime, amidst an intention to ‘Build, Build, Build’. Change is coming.
Modern preoccupations – Where are we now and what has changed?
We entered this year with a series of unaddressed challenges in our big cities. Top of the list is that we have simply not delivered the volume of new homes needed to maintain a well-balanced economy – ‘a chronic failure’ say Boris. Similarly, we have not invested in the infrastructure (physical, social and community) needed to maintain the pre-existing quality of life. Ultimately, these have been political choices, informed in part by a desire to balance the books in the UK following the global financial crisis, and secondly, due to the increasing marginal cost of delivering amenity in already crowded environments. I have addressed these topics at some length in previous blogs and so won’t repeat here. However, in summary, it is becoming increasingly difficult to address the same urban challenges, and this is making our big global cities less competitive. An undercurrent building beneath this context has been the structural change to how people work and shop. In the sidecar to structural change sits obsolescence. You don’t have to look too hard around many of our regional cities to see its impacts. Particularly in poorer locations, urban decay and boarded up shops are on the rise. Even if the physical fabric remains, the economic purpose has shifted. Once vibrant high streets are now filled with charity shops, poor quality pop ups and discounters. Floors of office buildings remain unoccupied, and whole areas of some cities remain in limbo, pending a promised change. Adding to this unsatisfactory context is the emerging notion that people will now do things differently. It is easy in the heat of the battle against coronavirus to make predictions of change that might in reality fall flat. However, the lead indicators are out there to suggest that this won’t be the case. Enquiries at estate agents in the countryside are on the up. Meanwhile businesses are rewriting their occupational plans both for the short and long term. Supply chains are starting to reforge, and online grocery sales (one of the last stalwarts against the digital shift) have doubled. There is no going back from some of these changes.
What does this mean?
The logical interpretation of these changes is twofold. Firstly, the locus and nature of demand are shifting. The places that were important might no longer be, and the activity that happens in them will be different. Secondly, many of our assets will no longer be fit for purpose once the change flushes through. Many that were already precipitously close to obsolescence will be pushed over the edge. There is a danger that this economic and demand shift occurs, but that our policies and approach remain, creating a disconnect between that which is demanded and that which is supplied.
The Deserted Medieval Village of Wharram Percy.
I grew up not too far from the Deserted Medieval Village of Wharram Percy. The name conjures the imagination, but what does this add to this story? Founded by the Saxons, Wharram Percy is the largest of 3,000 deserted medieval villages in the UK. In the late middle ages, a consumer shift to woollen garments resulted in a steep rise in the price of wool. Consequently, many landowners, including the eponymous Percys shifted from arable farming to sheep farming. In short order the demand for farm labour fell, the village emptied, and the buildings became permanently obsolete. Back then there was no welfare state or government funding; the villagers moved to avoid starvation; a powerful incentive. The same compulsions these days are weakened, and this is where government has an important role to play in the management of change and the reallocation of resources. As a society we are generally unwilling to countenance managed decline; psychologically and politically the acceptance of decline is presented as a failure, rather than a necessary element of evolution. Hence, rather than encouraging people to move or adapt, we have been more willing to prop up failing propositions. This needs to change. The modern equivalent of the demand shift for wool, is the digitisation of working and shopping, which is being sharply accelerated by coronavirus, and which in turn casts light on the inadequacies of modern cities. We now need a planning system which envisages the change, satisfies new demand, and resolves what’s left behind. Importantly it needs to do this quickly.
So how does the planning system need to change?
Driving the shape of our early planning system was the need to respond to unchecked urbanism and industrialisation. The interaction of many with the planning system today comes in the form of development control; mainly telling developers what they may not do. However, let’s not forget that urban planning touches far more than this. The New Towns movement which arrived at a similar time to the Town and Country Planning Act envisaged the proactive facilitation of growth. More recently Enterprise Zones and compulsory purchase powers have been used to drive growth rather than react to it. However, the emphasis in this direction needs to be shifted up a gear.
Firstly, planning needs to be visionary. Too often planning is retrospective. The need for evidence in plan formation means that between the process of starting to plan and final adoption, the world often moves on. This will almost certainly be the case in the coming period. As a country we should be willing to balance evidence of the past with intuition about the future. We should be unafraid to set an inspiring vision of where we want to be in 10 years’ time and shoot for that.
Secondly, it needs to unlock new demand. If we think that existing cities are underperforming, then we should build new ones from scratch. The success of Milton Keynes in the ‘60s shows how starting again can more closely match modern needs and drive economic growth. It is disappointing that Sidewalk Labs recently pulled out of Toronto; this promised much. In the past decades, we have learned so much about what makes cities work and how modern technology can play a role. We need a new, smart, New Towns movement in the UK that takes these learnings and responds to a redistributed economy and new ways of working, shopping and living.
Thirdly, it needs to let go of the past. Newsflash – we don’t need as much retail space as we once did. Rather than pouring money into futile attempts to restore our high streets to their halcyon days, let’s kill them and start again on a new premise. It is only by pruning the stems that we will promote new shoots. For large assets facing obsolescence, local authorities need to be willing to step in and acquire them, preferably with the private sector in tow, but if necessary, using public money. Speedy site acquisitions using compulsory purchase need to become the norm; and in framing these, the balance of rights needs to sit more in favour of the acquiring authority for the good of all concerned.
Fourthly, we need to review our sacred cows. Planning must sensibly tread a line between preserving the best of what we have and opening a door to satisfying the needs of the future. In the situation where the future might look very different to the past, we need to start a conversation about what is most important. We should be willing to make the tough trade-offs, and certainly be willing to abandon entrenched ways of thinking that now feel outdated. The new proposals start to reframe this debate in favour of development.
Finally, the planning system needs to be responsive and predictable. The concerns over lack of coordination in the infancy of planning have now been replaced by criticism over over-prescription, bureaucracy and uncertainty. The flexibility of our present Plan based system should no longer be seen as a benefit. Alternatives, notably the American zoning model, offer a brutal certainty that is advantageous when trying to deliver change quickly. Certainty removes the need for engagement and puts less pressure on stretched resources. It also removes financial risk. However, our authorities also need to be tooled up to act more quickly.
Catalytic events call for catalytic policy responses. There is potentially an exciting new role for the property industry to play in shaping our collective futures; however, we need to be willing to pivot away from principles that no longer serve our interests, and to do so quickly before our cities suffer the same fate as Wharram Percy.
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