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Dale Thomson: How London’s Affordable Workspace Program Is Progressing.

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Hey folks! Another week, that means we are back with a new episode for you. This time we have Dale Thomson. He‚Äôs from Islington Council. And he‚Äôs leading a small team to implement Islington’s ground-breaking Affordable Workspace Programme using GLA Good Growth Funding and developer responsibilities from large developments as part of the Inclusive Economy service.

This episode, we are going to be talking all about How London’s affordable workspace program is progressing and what it is really all about. We are going to be delving on the specifics of the program and how is it going and how much has changed since they started this program. 

What is the Affordable workspace scheme?

So the affordable workspace programme Islington strategy was developed some years ago, basically, some clever planners had the idea of writing into the section 106 agreement with developers, which is all about developer obligations is a development tax of another sorts, rather than sort of asking for money. 

They said, well, you give us a percentage of the space in new commercial developments, that we can then go out, and we can let as affordable workspace and you’re going to give it to us at a peppercorn rent I zero and the lease terms that we’ve managed to negotiate with developers run firms for 10 to 20 years, we’ve actually got one that’s 199 years.¬†

But in general terms, what we do is we basically get the space from the developer once it’s nearly finished, it tends to be a nice shiny building because that’s where you get the sort of quantum uplift in terms of the floor space that you need in order for the policy to kick in.¬†

And we then go out to market we find an operator, and we sort of, we do an under lease with the operator for the same period. Instead of the rent, we pass on all of that rent saving to the operator. What Islington wants to see is social value. 

Now, of course, social values are quite an amorphous thing. But in recent years, what some clever economists have managed to do is to make sure that you can actually quantify social value in monetary terms. To be frank, it was one of the few ways that developers would actually understand what it is and how you measure it. 

So it kind of came from that world. But it’s been very, very useful for us in being able to set targets with, with our operators, in advance of them going into a space that actually equals two is equal to or greater than the amount of rent saving that they would have received.¬†

So we then work with the operators that we choose, and our operators go through a heck of a procurement process, we are very careful only to engage with operators who we believe have similar values to us, we believe have the capacity to deliver the kind of interventions with the community that we want to see in the kinds of interventions that actually really make a proper difference.

Links:

Dale on LinkedIn

Dale on Twitter

Investment Opportunity New Workspace Concept

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Bernie J Mitchel  0:31  

Hello ladies and gentlemen and welcome to this week’s episode of the Coworking Values Podcast, the sweetest smelling coworking podcast in the universe. Today in our luxury studio, I have Dale. Dale, what are you known for, and what would you like to be known for?

 

Dale  0:47  

I’m known for leading the affordable workspace program at Islington. I’m also a trustee of the Granville South Kilburn trust in South Kilburn. And a bit of a workspace entrepreneur myself and just looking at the moment, to sort of develop a workspace in North London. So, quite a few hats.

 

Bernie J Mitchel  1:17  

As we’ve gotten to know each other, probably over the last 12 months. You seem to have this good understanding of¬† that fine line between community and worth keeping open when it comes to workspaces. Can you explain the format of the Grandville, was that the first affordable workspace in London?

 

Dale  1:40  

No, certainly not. I mean the Granville is relatively new, it came from South Kilburn Studios, which about seven or eight years ago was being fairly heavily touted as being an  exemplar of how you set up community led and community focused workspace on residential estates over London. The idea was the 1718 businesses in there were subjected to a glorified Porter cabin to be quite frank, and the regeneration program was going to flatten that so, we had to find a new home for it. 

I was with Brent Council at the time, and we started looking around the area for a suitable building, and just happened to stumble upon the Granville which was a community center for many years. And then back in Victorian times it was a school and a marvelous, marvelous solid building so, I went into the Granville on the day it was due to be closed all the cancel services were being cut as the way at the moment in terms of canceled budgets and walked in there and thought, hold on a minute, this would make a fantastic workspace, that was just the immediate vibe I got and I managed to convince the Council of the case of doing that and the South Kilburn trust at the time and we managed to hold on to GLA money we had and we created the ground floor which is incredibly community focused.

¬†The building in which it’s housed was a community building for many years and¬† we had people come in and say my wedding reception was here. I think when you get a building that is that connected with the community from a regeneration point of view, actually not using it for community use going forward is a bit of an own goal¬† from that perspective. But we were lucky in that we did manage to¬† identify a relevant use for it and it’s still there today and it’s still serving the community, more so than ever I think in terms of what we try and do there to engage with local businesses.

 

Bernie J Mitchel  3:53  

Can you say a little bit about, for the people listening to this that don’t know what the Affordable Workplace scheme is and then we come down to that tricky word affordable, because that comes up a lot. What is it, and who’s it for?

 

Dale  4:17  

So, the Affordable Workspace Program Islington and¬† the strategy was developed some years ago. Basically, some clever planners had the idea of writing into the section 106 agreement with developers, which is all about developer obligations, it is a development tax of another sort. And rather than asking for money, they said well you give us a percentage of the space in new commercial developments that we can then go out and we can let as affordable workspace, and you’re going to give it to us at a peppercorn rent, i.e., zero under lease terms that we’ve managed to negotiate with developers who’ve run the firms for 10 to 20 years, we’ve actually got one that’s 999 years. But in general terms, what we do is we basically get the space from the developer once it’s nearly finished. It tends to be in nice shiny buildings, because that’s where you get the quantum uplift in terms of the floor space that you need in order for the policy to kick in.

¬†And we then go out to market, we find an operator and we do an under lease with the operator for the same period. Instead of the rent we pass on all of that rent saving to the operator. What Islington wants to see is social value. Now, of course social values, quite an amorphous thing but in recent years, what some clever economists have managed to do is to make sure that you can actually quantify social value in monetary terms. To be frank, it was one of the few ways that developers would actually understand what it is and how you measure it. So, it kind of came from that world but it’s been very useful for us in being able to set targets with our operators in advance of them going into a space that is equal to or greater than the amount of rent saving that they would have received. So, we then work with the operators that we choose, and our operators go through a heck of a procurement process. We are very careful only to engage with operators who we believe have similar values to us, who we believe have the capacity to deliver the kind of interventions of the community that we want to see, the kinds of interventions that actually really make a proper difference.

 

Bernie J Mitchel  6:44  

Something that comes up quite a lot, and you must have heard it yourself as people go, well, what is affordable. The first experience I’ve had of this was around Hackney when people were making affordable workspaces and it was affordable workspaces for artists and around 2012. My friend Ian was an artist in Hackney, and he lived and worked in a freezing warehouse. And he was out there and absolutely loved it and I’ve wondered how he survived. It was ridiculously cheap, my head even went like, wow I can move in here and bring my own fire and I’d have a TV show type studio. And then when affordable came along it was like, oh from as little as 100 pound a week, which is not a bad rate, but that is not affordable for a lot of people, and one of the first encounters with Urban MBA was a video of young people going around Hackney, saying I’m starting my business and 350 pound a month for a desk is not affordable. What is affordable?

 

Dale  8:05  

I think affordable is different things to different sectors, as you just mentioned the artists and makers, affordable to them is not affordable for, say a tech business. However, if you’re starting off affordable is as low as possible, please, isn’t it? That’s the answer, but however, in program terms we define that as 80% of market rent. However, we’re incredibly aware if that workspace happens to be in white collar factory on Old Street, 80% of market rent is still unaffordable to probably 90% of the entrepreneurs who want to work in that space. So, generally what we like to do is when we put out the tenders or when we accept to get the responses back, is to find an operator who has a¬† charging scale that has a range of costs.¬†

And the idea is at the bottom of that you’ve got really affordable, and those are the ones that you point to at your local community. And then it steps up to just under market rent, and those are the more financially able users. Those are the memberships they’re targeted at, if that makes sense so, you’re looking for one side of the business or the commercial plan to subsidize the other. I don’t think you can just have a workspace where you say all the workspace in here is 20% of market rent. Again, depending on where that is, it’s a different number, just wouldn’t be viable in commercial terms. So, we do get that what we want to drive, I’d love if workspaces could have 500 square ft, the whole lot. It just wouldn’t be commercially viable so, you have to recognize that there’s a cross subsidy model that there has to go on there, but there’s generally what we get presented with that actually says you’ve got people paying full whack at one end, who can afford to who are then essentially subsidizing those at the lower end, who are really on the affordable memberships or costs.¬†

 

Bernie J Mitchel  10:24  

I’ve been to so many workspaces that are in affordable or low budget in a place, a town and like people, people like us will know where to seek them out so we won’t go and try and hire and rent an office in Piccadilly Circus, we just know to go and find the dilapidated warehouse in Hackney this got that cool, edgy vibe, and enjoy. There are many places I’ve been in London where we enjoyed amazingly low rent in a very cool space, and it was before anyone found out about it, but in the early days I didn’t realize how many people in that neighborhood didn’t even know they were allowed, and that’s one of the one of the best examples is the Arc Club, which is, I’ll put a link to the work article about Freelancers Week, Arc club, and Urban MBA, but they made a point of reaching out to people in the local area with programs like proper programs not like kickboxing programs, they did around the Urban MBA program there, and they did a homework club, and they’re looking for ways to be part of the neighborhood rather than Google bus people in who can make the place look cool.

 

Dale  11:39  

Absolutely. And funny enough, we’ve just been working with Nick from Arc club recently on his on his latest venture in Finsbury Park. I think that you made a good point there though the bigger idea was why Wall Street and Tech City happened because not because it was a place that everyone thought will go there because it’s going to be a great place to collaborate, because it was cheap. No one else wanted to go there. And of course, it gets more successful, and it drives values up and it drives rents, up and of course, displacement effect keeps happening. Richard Florida talks about the foreground of gentrification, being your artists makers in innovative small innovative companies, and kind of blames them for it. It’s not their fault, they’re only responding to the market forces, and if they can find cheap places in Hackey.¬†

This ripple effect for me as I’ve seen it over. I mean you can throw in the 89, you were saying earlier. I was down here in 87 and I’ve seen it happen. It’s just this is sort of central gentrification and that has a wave, and it goes outwards, and you displace your innovative and socially focused businesses, as time goes on, so no one wins really. You just end up with a hot house market, an overheated market, with no socially focused really innovative young businesses there because you’re just forcing them further and further out. And I think for London the danger comes when they go so far, they go; actually, you know what, we’re just going to jump over the Greenbelt and we’re going to go up north and end up in these places who are crying out for just that sort of young innovative socially focused type of residents.

 

Bernie J Mitchel  13:42  

That’s what I really hope is happening.¬† I’ve been in coworking for like a decade now, there’s never been a coworking space and I’m sitting in the first coworking space in Ilford. There’s lots of like horrible offices that look like Arnold Schwarzenegger would tie someone to a chair and beat them up in a grim movie, but there are no coworking spaces. And now that’s happening, and as you’ve followed our London Coworking Assembly trail, never before have people like yourself and Claire, and Tom, and lots of other people have probably had such a deep understanding of work, or even asked what coworking is. There have been projects before like the Impact Hub and stuff like that, but it was happening in 2019 but COVID accelerated all of that. And I’m really hoping that people will stay in their local area, and¬† all the reasons it’s good to be in their local area.¬†

 

Dale  15:04  

I think this is this is, from an Islington point of view, they realized that some time ago and it’s about actually making sure you still have spaces that are affordable in perpetuity or certainly in the longer term. There’s only so many 999 year leases we can negotiate with developers, but it’s actually so important, culturally and socially to make sure that these places still exist in zones one, two, and three and we’re not just forced into high price very shiny spaces that a) you wouldn’t even be able to afford them, but b) are these the sort of places you’d really want to start an ethical business doing X, Y, Z? Anyway, they just don’t give you that environment. And the other thing I think is that what you get in central London is very much an office space type coworking offer. Although there are marvelous exceptions. Generally, it is quite bland, you get more diversity as you go further out, and affordability gives you diversity as well. And we’re using old industrial buildings and things like that that actually encourages the diversity within workspaces too, rather than just sort of putting them all on the shiny new buildings popping up around Wall Street roundabout.

 

Bernie J Mitchel  16:32  

I remember Wall Street roundabout way back in the early 90s, the only thing you could find around there was like a nightclub, it was a no man’s land. Why does that old industrial building encourage diversity?

 

Dale  16:54  

I mean, Jane Jacobs said a long time ago that new ideas need old buildings, and I think she was absolutely right. That’s where you get innovative businesses going. You certainly have the freedom to innovate and to try and to do different things. More of that freedom in an older cheaper building than you do in a very shiny expensive building where your landlords, is as soon as you put a bunsen burner on or the sprinklers come on and then you get chucked out. It’s just that flexibility I think is the simple answer.

 

Bernie J Mitchel  17:28  

Don’t get me started on Jane Jacobs’ quotes. Can you say a bit about Better Space because that is a very interesting move. Thanks for helping us sort out the Urban MBA event there which is our first in-person event for like 100 years. That’s a very interesting combination. It’s a stickler for being part of the neighborhood.

 

Dale  18:08  

It is and I think we’ve gone really well with City University of London during this project, because again, we choose partners who are coming from the same place as we are in terms of inclusive economy, inclusive work, community, wealth building etc. And they just had a need to start to bring their walls down a bit, then I think, funny enough was speaking at the launch, which was last Monday, with Professor Anthony Finkelstein who is the new president of the university, and in his opening speech he actually said that universities need to sort of bring those walls down and draw other people into their organization, into their estates if you like, which is normally has glass walls that most people in the community would never be able to walk through or into, even.

¬†And it’s the same for us, I think that’s what we really wanted to do as well. It’s to take the buildings that we’re getting this new space in because they do tend to be shiny glass buildings, and actually say how do we make those places accessible for the state that’s directly over the road that actually the people in there, the community living there has been looking at these glass towers for years and years and years, and it kind of defines the limit of the existence in many cases, and they actually sit there and go, well that’s the limit of my neighborhood, that’s the limit of my community. I can’t go there, it’s not for me. And I think the exciting thing about the collaboration with University of London is that we both agreed that that’s exactly what we need to do, is we need to find ways of connecting with the community and having a few pathways for them. From there to go actually you know what, I can go in there, I’ve got this business idea, and I can go in there and it’s a place for me that will nurture, help me grow my business and be successful.¬†

And that’s the trick and we’re right at the start of this because Better Space enrolled in the Islington building is our first section 106 space. We have other spaces that are funded in different ways as you mentioned that foundation fashion ends up in Finsbury Park, but this is the first one from developer obligations. And so, we’re kind of on a learning curve as well but I feel what we’ve done today made a really promising start on that work. And of course, going forward, the proof is going to be in the pudding, and we now have to work with city, who’s employed a really great scene in there with Simon and the other guys. And but also with the local economic officers, local economy officers, I should say in Islington.¬†

Islington is quite unique in that sense, it has a team of local economic economy officers around the borough, who are there to connect the community with all the other stakeholders and all the other things happening that will actually support them and hopefully give them better quality of life and better life chances. And so, that’s the collaboration we’re working on now, and it’s kind of watch this space and then we’ll come back in two years‚Äô time, and we’ll tell you if it’s successful or not in making those connections, because if we’re not making those connections and if we’re not actually bringing in a new audience that doesn’t have a beard, tattoos and a fixed wheel bike. Why are we doing it, what’s the rationale for intervention, from a local authority perspective, if the impact that we’re making is not for the actual people who wouldn’t normally walk through those doors?

 

Bernie J Mitchel  21:44  

Exactly. There was this really rooting for Simon and Sophie about a space there because that could definitely be so cool and one of the two last points before we go, ladies and gentlemen, is when our work hubs which is in Euston Street which is just by Euston station, no one from local neighborhood came to our area, and we  just found it really hard to reach people, and the closest we ever got to it, we were never sure what to put on a flyer and put through doors. When Joe Cox got assassinated, there was the great big get together, the GMB union, a base just around the back of us, and they organized a street party as part of that, and so many people came to that, and we got to connect with people. 

We actually had an art club in the streets, we had lots of people sit around a table coloring and painting in the festival, and we were trying to explain what we were, and we did a bad job of it, or people just didn’t understand that you could just not work from home, we could go and work downstairs in our workspace, and we felt like we missed the opportunity. It was just so hard. One of the places I’ve seen do it best, and consistently is Space Four. It was terrifying to interact with the local residents because they’re not people who sit with laptops and do stuff online, it’s not an easy thing to do.

 

Dale  23:43  

It’s not and it takes time. You have to build relationships and build confidence and establish a name for yourself in those communities and it’s also about understanding who the people in these communities are and understanding what the skills that they bring to the table are, what their experiences are, and what their aspirations are as well. I don’t think we do that very well and I’m not criticizing anyone, I think just across the industry where we are sort of trying to deliver community focused workspaces. I think we all need to try and understand and have tactics to actually getting further into the communities that we want to reach and that is, I hate that term hard to reach, but what some of the communities are really hard to reach and you have to be a bit more nuanced and a bit more intelligent about how you engage with them. You can’t just open your doors, it’s not feel the dreams and Kevin Costner as I’ve quoted previously, you know, build it and they will come, they bloody won’t. It’s hard work.¬†

 

Bernie J Mitchel  24:45  

I keep trying that tactic and it never works. 

 

Dale  24:48  

So, apparently that’s the problem.¬†

 

Bernie J Mitchel  24:51  

Also, it’s not my methods, it’s not my competency.¬†

 

Dale  24:56  

Very few people have seen Kevin Costner under the age of 55. 

 

Bernie J Mitchel  25:01  

So. the¬† last thing is, what do you think is going to happen to the middle of London? I was chatting with my mate from Innovation warehouse, and he said only 7000 people live in the city of London and there’s like 1000s of workspaces. Better Space, will it be people from the neighborhood, or will it be people like me going oh my god, I can go get a space there. How’s that kind of work and retail dynamic going play out?¬†

 

Dale  25:52  

I think it’s an interesting question. I think a lot of really good thinkers in terms of the future of London have seen this coming for years and years, in one way or another, maybe not quite so cataclysmically. But everyone has been talking about the more polycentric approach to London and indeed the Southeast, and how would you actually start to have these more local concentrations of business and commerce around the¬† more peripheral areas in London that are mutually self-supporting and allow central London to still keep operating and not just grind to suffering halt. It is really interesting, and also spread out further, you know, where do people commute in from, and what’s the potential for having larger concentrations of clusters or encouraging larger concentrations and clusters of commercial and economic uses around the periphery as well.¬†

I don’t think anyone’s answered it really well. But, you know, the point you make about 7000 or 10,000 residents in the city of London is the same in Westminster. It has more people but it’s still in terms of population density is really low, and all of these other places are where the concentrations of residential concentration densities are much, much higher. Put your workspaces there. It is common sense. I think it’s about the larger companies that employ a lot of these people actually coming on that journey too. They’re not regeneration people,¬† they’re not workspace providers. And I think once they come on that journey and understand that working practices and working patterns can and should change. I think things get a lot easier, which is why now I think is the opportune time to really start looking at zone five and six and say what is the potential to build really major workspaces that are great quality, that are affordable, and that connect with the community in these places. And I think the potential, from my point of view, I’m hoping that potential is quite significant.

 

Bernie J Mitchel  28:17  

I hope that too. In this building here Work Hive,¬† it’s three floors, it’s like 150 people work here. The office space has been at capacity for three years. That leads us seamlessly on to our next event in London with Town Square, and we’ll be revisiting their What if everyone could walk to work report which was published, I think it was last September, and which is basically around the 15 Minute City. A lot of stuff Dale and I discussed in this podcast is popping up in different parts of that manifesto, I would say.

And then we’re going to be talking with Nina Franco from Arc club in Hackney and Kofi from Urban MBA about how to really engage with your local community, which is something else we talked about here. And then the other craze we’ll go straight in again is Rural coworking which has been, since I first went to go work in European 2014, it’s been a real topic led a lot by the German Coworking Federation and Jose who leads the European Coworking Assembly’s Rural Coworking Project, and Joe from the Coworking Library are going to be digging a bit deeper into that in September, and we’ve also got a Google My Business for coworking so, that‚Äôs coming up. Dale, where’s the best place to find you online and follow your antics?

 

Dale  30:29  

We are on Twitter, Islington Council, and we’re on LinkedIn. Otherwise, just Google Affordable Workspace Islington and you’ll find our pages and all the details about the program and the strategy and how to get in touch with us.

 

Bernie J Mitchel  30:44  

Thanks very much for your time tonight. Be careful out there, it is a jungle.

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