How Unloved Buildings Can Be Used to ‘Change the World’ and Drive Local Prosperity: Lessons from London

Over the last decade Shoreditch has experienced hyper-gentrification. Knight Frank has declared it the most expensive tech district in the world. Rental prices have doubled and are higher than other tech districts across the world, including San Francisco Mid-Market, Dublin Docklands and Bangkok CBD.

Before its transformation, the area had been associated with deprivation and crime. It declined during the post-war period, with most of its theatres and music venues demolished in the early part of the century. It began to pick up in the 1990s and became synonymous with art, culture and fashion. This helped it become a ‘trendy’ place which attracted creative and innovative businesses looking for affordable rents in a central location. This evolution has continued over the last decade and the area has been redefined as the home for tech giants such as Google, Facebook, Amazon, Intel and HP and other high-growth tech-focused enterprises. 

While this is an extreme example, cities across the world are experiencing similar challenges as growing populations and wealth pushes up residential and commercial property prices. This process often squeezes out interesting people, businesses, community organisations, charities and innovators which make up the fabric of cities. This can lead to the loss of identity, vibrancy and diversity – or, in other words, a decline in what makes cities great places to live, work and visit. Economic pressures, such as those currently being caused by COVID-19, also tend to place the greatest strain on these small and local groups.

The influx of outside and multi-national firms can also reduce the amount of wealth remaining in an area or community. Much investment and expenditure flows out of local neighbourhoods to other parts of the world. This, among other factors, has led to a backlash in some cities against the introduction of new businesses and large scale inward investment (see Amazon in New York and Google in Berlin). This is despite the significant employment benefits that new businesses can bring to an area.

But what can be done?

While there are a wide range of policy and practical interventions that can be implemented, from Affordable Workspace Policies (see Islington’s Affordable Workspace Policy) to land trusts (see London’s Creative Land Trust), some pioneers are using unloved buildings to deliver workspace and community space that deliver strong social, economic and community returns.

London’s Disrupters 

One organisation who at the forefront of this is 3Space, a London-based not-for-profit workspace provider who specialise in transforming vacant, underutilised or surplus commercial properties for new affordable temporary uses. The rationale for their organisation is clear:

 “Commercial space in cities is becoming increasingly unaffordable and is being used inefficiently, limiting the potential for experimentation, innovation and local initiatives”.

Their most recent project is 3Space @ International House, which was recently highly commended by the Fast Company as a World Changing Idea alongside Harvard University and IBM in the Space, Place and Cities Category.

 3Space @ International house is a 12-storey, 70,000 sq ft, ex-local authority office building in Brixton that was re-opened in October 2018 as London’s largest affordable workspace. The building is owned by the London Borough of Lambeth (LBL) who no longer needed the space but wanted to use it to deliver: (a) community value and, (b) economic growth through a temporary (or ‘meanwhile’) workspace project before it is eventually re-developed as part wider regeneration plans for the area.

3Space @ International House

The model used by 3Space at International House, which attracted the adulation of the Fast Company, is the unique concept of “Buy Give Work”. The concept is simple - for every desk or space bought by a business, another desk is given away free of charge to a community organisation, charity or experimental/innovative enterprise. This not only enables people and organisations to remain in the area, but also aims to deliver an interesting and unique tenant mix and business community. It also helps to maximise community wealth and minimise leakage from the area.

International House has five ‘Give’ floors for a range of interesting and valuable organisations. These are subsidised by commercial tenants on the remaining six ‘Buy’ floors. Paying tenants are also expected to put aside time and resources to support organisations benefitting from ‘Give’ space, particularly through mentoring, work experience and volunteering. Tenants also have to commit to paying their staff the London Living Wage to take space in the building.

The test bed for this model has been 3Space’s Keeton’s and Collett workspace project in Bermondsey. This is a repurposed and previously unloved former college on the Biscuit Factory Regeneration site in Southwark, vacated as part of a planned large-scale regeneration of the area led by Grosvenor.

With an eye on future placemaking, Grosvenor were keen to activate the space in the interim and bring a range of interesting people and businesses to the area. Grosvenor gave the college to 3Space free of charge for a six-month period in 2016 and this was then extended for an additional two years. 3Space invested capital for furnishing, fit out and other utilities, and with the help of local carpenters, plumbers, electricians and in-house design and knowledge, transformed the building intro a thriving enterprise space.

The project delivers a wide range of positive benefits to Bermondsey and South London. 3Space has successfully re-activated the space which supports over 40 diverse tenants to prosper (including businesses, charities, social enterprises and experimenters). Our recent evaluation shows that 130 direct jobs were attributed to the site at the end of 2018, delivering around ￡8m to the London economy each year. Beyond this, the “Buy Give Work” model has also enabled charities, social enterprises and experimental organisations to thrive. Over 18 charities have benefited from free space, delivering significant social and community value. Examples range from RefuAid, an organisation focused on helping refugees to lead independent lives, to The Restart Project, a social enterprise and charity dedicated to community waste prevention.

Greenlab – One of tenants at 3Space @ Keeton’s and Collett

London’s Enablers 

There are a range of similar organisations and examples across London (see Makeshift’s Pop Brixton; Meanwhile Space’s Central Parade; Second Floor Studios’ Wembley Park Studios). All of these go beyond other typical placemaking initiatives by delivering significant social and community value alongside helping to create lively, interesting and productive places. The are similar examples in other cities around the world.

But what enables these projects to flourish?

The key is for landowners to think differently about their assets and land. Where a building or space is earmarked for future redevelopment, deemed surplus to requirements or difficult to let, landowners can and should reconsider the balance between financial and social returns. Beyond the direct benefits of letting to organisations like 3Space and Meanwhile Space, a long-term and patient approach to investment can deliver greater longer-term financial benefits.

The public sector is perhaps the most important stakeholder if projects like these are to be replicated and scaled. Most towns and cities across the world have a wide range of anchor institutions (e.g. councils, universities, colleges, hospitals, police forces etc) that have assets that can be used differently to support growth and prosperity. Most projects discussed here have relied on innovative London Boroughs who recognise the value of balancing the social and financial returns from their property portfolio – even at a time of significant public sector cuts in the UK.

This is perhaps even more pertinent at this time. It is expected that COVID-19 will cause fundamental shifts to economies and people over medium and long-term timescales. The public sector can use their assets to quickly support and underpin economic recovery in their areas and use this as an opportunity to build more locally-based, inclusive and sustainable economies. A combined approach of business support (which many local authorities have quickly turned their attention to) alongside highly affordable space for enterprises would have a significant positive impact for enterprise.

Estimates suggest that in the UK around 4,000 public buildings are sold off every year and that another 7,000 are at risk. If only 5% of this building stock were used differently, the scale of economic, social and community benefits could be huge. The successful delivery of exemplar projects by the public sector is demonstrating the benefits and viability of such projects to the private sector. If this is scaled up to more cities and countries around the world, the impact could be even greater. Perhaps even ‘world changing’?

About the Authors

Patrick Ransom is a Senior Consultant in Hatch’s Urban Solutions team. He specialises in developing strategies and action plans to support cities grow, develop and prosper. He is currently writing economic strategies for parts of London, Oxford and Johannesburg. Patrick also has a deep understanding of the workspace market, having helped the London Borough of Lambeth deliver International House and has supported several public clients develop policies and strategies to catalyse affordable workspace.

Alex Quattrone is a Consultant in Hatch’s Urban Solutions team. He is an expert in collating, analysing and interpreting complex datasets to help clients solve urban challenges and issues. He has worked on several workspace focused commissions over the last few years, particularly in London and the East of England.