Co-Living Gets A Bucket Of Cold Water From Manchester City Council

Developers who have been trying to persuade Manchester City Council to buy into the co-living concept have failed.

The setback, revealed in council paperwork, could be a blow to the growth of co-living outside London.

A report to the council’s ruling executive revealed that co-living will be capped at 5,000 units across the city, will only be allowed in some areas, will require long-term management contracts, and payment of council tax and financial contributions toward affordable housing — a long list of conditions developers hoped to avoid.

Five developers approached the council arguing that there should be no limit on development, that the council should be less cautious, tenancies should not be restricted in length and students should not automatically be excluded. The council listened, and did the exact opposite, the report revealed.

The council first indicated it would take a restrictive and sceptical approach in March this year.

The report concludes that co-living could be a flop in the wake of social distancing rules. 

For now, the report said: “Co-living should be restricted to a limited number of key areas of high employment growth within the city centre, where it can be demonstrated that a co-living development could provide added value to the wider commercial offer in the area.”

St Johns, First Street/Oxford Road Corridor and Piccadilly/Northern Quarter are suggested, because they appeal to the tech and media sectors, and the limit is 5,000 units in total for the city.

“The co-living market is new and untested in Manchester ... the market is ahead of policy and this presents challenges in appropriately appraising planning applications,” the report said.

“There is anecdotal evidence from some developers delivering schemes in Manchester targeted at digital and technology businesses, that there may be a link between co-living and growth,” but the report does not seem convinced, adding: “Given that the product is untested in Manchester, it is not considered appropriate to approve a significant level of co-living accommodation.”

The council said it will review the “performance and impact of co-living” to check if the policy is wrong.

The big winner from the document is Liverpool-based Downing whose proposals for a 45-storey, 2,224-bedroom co-living scheme at Manchester’s First Street now seem likely to be approved.

The downside for other developers is that Downing will have used half the allocation of co-living beds. However, demand might not have exceeded 5,000 units in any case.

The council will impose conditions that include complying with the usual space standards for apartments, and enforcing a single management and lettings entity with a long-term commitment run schemes.

"Developers should be required to legally commit to renting only to working households, or households actively seeking work, and precluding letting to students,” the report said, adding that developers will also have to pay council tax, and make payments to support affordable housing in the city.

It gets worse for developers, who will “need to demonstrate a clear rationale and need, based around their contribution to the local economy, responding to the specific needs of employers and supporting jobs; it would be essential to demonstrate that there was a clear link between the need to recruit and retain staff and the adjacency of the co-living product”.

If the council is persuaded to bend the rules for a special case, the quid pro quo will be higher amenity standards, the report said.