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The Problems with Buildings…

February 13, 2012 by admin

Buildings are expensive things to run.  And these days fewer of us need them as places to go to work.  Or at least we don’t need to go to just one of them.  And we don’t need to pay rent.

Yet there is a vibrant industry driven by developers, politicians and consultants bringing semi derelict buildings, especially in poor communities where regeneration cash is easier to come by, back to life as managed workspaces, incubators and start-up hubs.

When money is being sought to kick these schemes off the business plans always look achievable.  This occupancy rate at these rates per square foot, taking a contribution from the community cafe, with fixed costs of x and variable costs of y, within z months we will be generating a profit and re-investing in the local community.  Money is raised work is done and with hard work and good luck the building is eventually opened.

Except it is rare that members sign up as expected, rents are hard to collect in an economy where most cities have millions of square feet of empty office space.  Fixed costs are usually higher than projected as budgets over-run and interest repayments are higher than anticipated. That break-even point always seems to be ‘just around the corner’ even as social objectives for the building get thrown out the window in pursuit of revenue.

So lots of money, usually intended to help people living in deprived communities, goes into the pockets of consultants and developers and into interest re-payments on loans and the community gets a building that continues to swallow up revenue as the various parties who supported its development and staked their reputation on its success do all that they can to keep it open.  Including setting rents that frequently act as  major barrier to access to local people.

Of course it doesn’t always work out like this.

Some communities can stand the overheads associated with such developments.  Typically they are vibrant, affluent and well-educated, with disposable income to invest in ‘community share issues’ with no real need to generate a financial return. Hardly the intended beneficiaries of regeneration cash.  But even in these communities, building based regeneration is an expensive, risky and demanding endeavour requiring a lot of know-how and goodwill to keep the show on the road.

If we are restoring a building for its own merit then that is fair enough.

But, there is a world of difference between a pretty building and a building that is doing a beautiful job.

 

Filed Under: Community, enterprise Tagged With: community, community development, community engagement, enterprise, entrepreneurship, policy, regeneration

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