London’s industrial land: cause for concern?

Dr Jessica Ferm and Edward Jones

Bartlett School of Planning, UCL

LSE London seminar, 2 March 2015

“Industrial areas in London are not well-understood. Most people have no idea what is made and assembled in their borough, because industrial areas are unwelcoming and do not have a public face”

(Gort Scott, 2013)

Abbey Industrial Estate, Wembley (© Jessica Ferm)

THE CHALLENGE FOR LONDON

CENTRAL PROJECTION: 3.5m (37%) growth (2011-2050)

Source: GLA Intelligence (2013) Population and employment projections to support the London Infrastructure Plan 2050.

http://data.london.gov.uk/dataset/gla-employment-projections (adapted by Jenny Jones, Feb 2015)

Challenge for the Mayor

Accommodate “growth within the capital’s boundaries and without intruding strategically on its protected green and open spaces”

(Draft Further Alterations to the London Plan, Jan 2014)

‘Managed release’ of industrial land (London Plan, 2011)

Classifications of industrial land

• Strategic Industrial Locations – loss only permitted if part of a coordinated process of consolidation e.g. Opportunity areas

• Locally Significant Industrial Sites – regular reviews of supply and demand to justify continued protection

• Other Industrial Sites – not protected, to be carefully managed by boroughs, together with LSIS make up 50% London’s industrial capacity

Loss of industrial land since 2001 APPROX TWICE GLA benchmark for ‘managed release’

Research questions

• Is deindustrialisation driving the loss of industrial land?

• Who occupies space on London’s industrial land?• How important are these businesses for London? • Can we protect these businesses AND promote

mixed use redevelopment on our industrial land?

The study: Pulls together and reframes existing research and information

INDUSTRY IN LONDON AND THE ROLE OF PLANNING

Industry in London – historical context

• London’s industry – diverse not specialist• End of the production chain• Proximity to large and wealthy market – access to

national and international• Both specialist and cheap labour• Diversification and expansion beyond inner belt

“the capital was clearly the most important single seat of manufacturing industry in the country, accounting for between one and six and one in seven of all manufacturing workers in 1861, over one in six in 1921, and over one in five in 1951. Manufacturing occupied nearly one in three of all workers in London in 1861 and one in three in 1951” (The Industries of London, Peter Hall, 1961: 23)

• Barlow Commission (1940)

• Greater London Plan (1944)

• Distribution of Industry Act (1945)

• Industrial Development Certificates (IDCs)

• Policy for the Inner Cities

• Inner Urban Areas Act (1978)

• Industrial Improvement Areas

• GLC: London Industrial Strategy (1984)

• Richard Rogers “Cities for a Small Planet” (1997)

• Urban Task Force “Towards an Urban Renaissance” (1999)

• Compact City philosophy

• ‘Employment land reviews guidance note’ (ODPM, 2004)

• PPS4 ‘Planning for Sustainable Growth’ (2008)

• National Planning Policy Framework (2012)

Urban renaissance

Housing is one of the keys to consolidating the neighbourhoods of our city. The way to meet the huge demand and to strengthen our existing communities is to redevelop derelict and brown land to produce dense, compact and mixed developments.

(Rogers and Gumuchdjian, 1997: 118)

For and against industrial ‘zoning’

• Market allocates scarce resources most efficiently

• Zoning is outdated, does not support compact, mixed-use cities, is unsustainable

• Planning can correct market failures

• Prevents land value inflation, supports agglomeration of low-value small firms

• More efficient, less costly allocation of infrastructure

• Provides flexibility • Promotes social equity

AGAINST FOR

REAL ESTATE SPECULATION NOT DEINDUSTRIALISATION

What might be driving the loss?

• Loss of industrial land above GLA benchmarks suggests something else is going on over and above deindustrialisation

• Impact of real estate speculation and planning policy NOT taken into account

• Evidence from Brooklyn, NY of displacement of industry due to real estate speculation for loft conversions reinforced by city planners (Curran 2004, 2007)

Evidence from London

• Speculative office development in 1980s commercial boom displaced small manufacturers in Shoreditch, facilitated by changes to Use Classes Order 1987

• Camden and Islington employment land reviews (2008, 2011) – planned reductions in supply and predictions of continuing loss despite high demand and low vacancy rates

There has been pressure to redevelop the borough’s stock of land used for employment purposes, particularly manufacturing and industry, for higher value uses, principally housing. Once employment land in the borough has been developed for an alternative use it is very unlikely it will ever be returned to industrial use. There has been virtually no new provision of such premises in the borough for many years

Camden Core Strategy (2010)

Evidence from London’s industrial estates

• Rumours and speculation of threat create uncertainty, unwillingness to invest and commit

• In anticipation of redevelopment, landlords are offering increasingly short and insecure leases

• Leads to vacancies, high turnover, strengthening the case for redevelopment

MANUFACTURING IS CHANGING BUT IT’S NOT DEAD

• Larger companies are being replaced by smaller firms

• Diversity and complexity

Images from Gort Scott (2013)

• Growth of niches such as artisanal manufacturing, production of luxury goods, smaller food and drink manufacturers

• In London, productivity is strong, high GVA

INDUSTRIAL LAND ACCOMMODATES A RANGE OF DIVERSE BUSINESSES AND ACTIVITIES, VITAL TO LONDON

• Manufacturing is changing• But manufacturing is not

the dominant activity

Image from Ramidus (2013) Image from GLA (2014)

Servicing the city

London’s Strategic Infrastructure

Image from Closed Loop

Image from GLA

•Cultural and creative industries•Other diverse, small occupiers

Image from Hugo Glendinning

BUSINESSES ON INDUSTRIAL LAND ARE PART OF A DELICATE LOCAL ECOLOGY

Interdependencies in London’s economy

• Can firms simply move ‘elsewhere’?• Place-specific supporting infrastructure

“If you look at our employees where they live, it’s like a circle around this place. So to move out from the middle of the circle, we’d cause problems for ourselves. It’s like a craftsmanship job that we do here, and it’s good to have those skilled people to do it. It’s not so easy. Certain types of industry, you get rid of these people, and you get other people. And you start someplace else. It’s like nothing. Our business is different than that.”

Clothing manufacturer in Williamsburg, from Curran (2010)

“As businesses started to move, I started to lose customers because all of the businesses round here are linked.”

Image from ninebelow via flickr

“At the moment, 80 per cent of our business customers are within a 2-mile radius. A lot are moving or have already moved. Two of our main customers used to live next door—now we’ve lost them.”From Raco and Tunney (2010)

“Premises suitable for industrial, manufacturing and warehousing businesses provide jobs for people who would otherwise be at high risk of being unemployed or workless. The Camden employment land review 2008, using data from the National Employer Survey 2003 and the Annual Business Inquiry 2006, found that the skills required for these sectors are fundamentally different from other sectors with similar qualification level requirements, such as retail, leisure and hospitality. Therefore, it is unlikely that the retail or hospitality sectors will provide straightforward alternative job opportunities for people losing industrial/warehousing jobs in the borough.”

LB Camden Core Strategy, 8.12

Images from LSE Cities and Hall (2013) Images from Gort Scott

A RETURN TO THE 19TH CENTURY INDUSTRIOUS CITY?

Celebrating manufacturing

“There is an opportunity to move away from the rooted practice to design these sectors out of our towns and cities. Let’s make them visible again and stop housing them in anonymous sheds. Let’s re-appropriate industrial estates and districts through raising the quality of their design and maintenance. As a result, local communities could have a better understanding of how their local economy is formed and develop a sense of ownership. Let’s celebrate manufacturing industry again.”

Urban Design Group, 2014: 2

Category 1 sites

Category 2 sites

Category 3 sites

Typology from Roger Tym and Partners (2011) ‘Business premises study’

• Articulated HGV access• 24 hour operation• Single storey premises, 5-6m

min floor to ceiling heights

• Access for large commercial vehicles

• 24 hour operation • Multi storey premises with goods

lift

• Poor access• Incompatible neighbouring

residential uses• Restricted operational hours

A cautious approach to mixed use

• In London, strength of the residential property market and the imbalance of land values

• New housing in industrial areas undermines the important function of industrial land being to protect lower-value commercial uses from competition from higher land values,

• Raises expectations that further redevelopment can take place – ‘hope values’.

Conclusions: drivers of loss

• Loss of industrial land due to real estate speculation, fuelled by planning policy

• Predictions of future employment in manufacturing and industry do not take into account the role that development pressure and planning policy have played in past loss

Conclusions: nature and importance of industrial land

• London’s industrial areas are vibrant and diverse• Manufacturing is not dead• Flexibility and affordability of premises attracts a

range of other activities• Delicate ecology, much is hidden• Relocation is difficult• Vital for London and Londoners

Conclusions: Implications for policy

• No effective mechanisms within the UK legislative and planning system to manipulate land values within mixed-use context.

• Extension of permitted development rights – imminent threat

• A positive approach is required, acknowledging importance of industrial land as a vital component of a compact, smart city, not a barrier.

Further reading:

• Ferm, J. and Jones, E. (2015) London's Industrial Land: Cause for Concern? UCL (University College London): London, UK. Available at: https://justspacelondon.files.wordpress.com/2015/02/ferm-jones-londons-industrial-land-working-paper-final1.pdf

• Just space Economy and Planning response to consultation on the Further Alterations to the London Plan: https://justspacelondon.files.wordpress.com/2014/04/falp-jsep-response.pdf

Jenny Jones’ (Green Party London Assembly member) campaign:

• “The End of Industry in London?” report (Feb 2015): https://www.london.gov.uk/media/assembly-member-press-releases/green-party/2015/02/mayor-plans-for-london-manufacturing-to-disappear-within-fifty

• Blog: http://www.citymetric.com/business/london-doesnt-only-need-houses-we-should-protect-its-industrial-land-too-783

• Article: http://leftfootforward.org/2015/02/londons-industry-is-being-cleared-for-a-luxury-flat-monoculture/

• BBC London coverage: https://www.youtube.com/watch?v=UaMYGZXojdY• Jenny Jones questions Deputy Mayor for Planning, Sir Edward Lister:

https://www.youtube.com/watch?v=o10bOvYBkcM