Why businesses have to come first in the City

Stuart Fraser
AT the end of the 19th Century, the Square Mile was home to some 75,000 people; by 1950, this number had decreased to less than 10,000 and has remained largely stable ever since.

These figures in themselves are not surprising; they reflect the inherent tensions that exist between businesses and residents in any modern area with a high concentration of office space.

The City of London Corporation goes to great lengths to provide a high quality living environment for its residents; a recent survey indicating that 95 per cent of residents are satisfied or very satisfied with life in the Square Mile suggests that these efforts are largely successful.

However, as the world’s pre-eminent financial centre, the City also has a responsibility to its other residents, the thousands of firms drawn from across the world.

To allow existing businesses to grow and new businesses to flourish, successful business districts require careful planning and almost constant commercial development.

That is why, last week, the City of London’s Planning Committee approved plans for two new office blocks on London Wall, despite opposition from some of our Barbican residents.

On this occasion – following a lengthy planning process and a series of major concessions from the developers – the Committee decided that the economic benefits such a development will provide outweighed the concerns of local residents.

Of course, the Barbican is a designated and carefully planned residential area, albeit in a business hub; the repercussions would be far more severe if residential properties were dotted randomly throughout the City.

This is exactly the situation business districts across the UK could be facing if government plans to make it easier for developers to convert office space to residential properties – the consultation for which ended last Thursday – proceed unrevised.

Whilst the City appreciates the need to deliver housing stock nationally and is not opposed to further development in the Square Mile, any such provision must be in an appropriate location that does not restrict the ability of business districts to fulfil their primary purposes.

Owners of residential properties are well protected by law but unfortunately many of these expectations of residential amenity are incompatible with commercial activity.

Converting offices to residential properties would not only limit the amount of immediately available office space but it would also reduce the supply of development sites.

Once a property has been converted it is unlikely to changed back, even if the developer so desires. This is because short leases are unsuitable for residential purposes and they are often tied up for 125 years.

Stuart Fraser is the Policy Chairman at the City of London Corporation