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I recently submitted feedback to a National Consultation on Planning Policy. My general theme was about changing the rules around the buying and selling of land (in cities at least), as normal economics just doesn’t work. This is drawing on 2017 research from University College London and 18th and 19th Century Economics before the subject was hijacked by those with vested interests.
Firstly the principles. I told the Government the following: The value of land is nearly always due to the “public” infrastructure around it: services, transport connections, schools, shops etc. For example, if I owned a strip of land in a city over say 50 years the price would increase enormously even though I had done nothing. Some of that price increase needs to be captured by the public purse, who, after all, have paid for all that infrastructure that has increased the land price. All mechanisms to extract part of that increase in land value should be tried. This in some ways pays back in the cost of the infrastructure and its maintenance.
Wasteland becomes very valuable in a city and you don’t even have to do anything!And my views on affordable housing levels: I told them: You have set 10% affordable housing as a minimum, with some exemptions too. In Bristol we have assessed our city’s need as over 50% affordable. That is because of decades of allowing building to be a profit maximisation exercise. You need to recognise that % figures can’t be set nationally as local needs are often quite different. (The fundamental issue is the price of land when it is limited in supply due to green belt). To reduce the land price, the Council needs to be able to put in a high % (say 60%) affordable planning requirement. But I would imagine this would never get past consultation nor the inspector. Consequently we continue to fiddle while Rome burns and we shall see more and more homeless people...
And developers have to submit a viability assessment to show why they can’t afford to build affordable housing. My experience as a councillor is we get to see viability assessments and I would guess that about 25% of them have errors in them. They don’t start with errors in, I think it is because each one is updated following negotiations between officers and developers; it is these updates that have the errors in. Here’s a recent example; the viability statement still had the original amount of community space calculated for, in negotiations this was reduced but the value of the extra flats hadn’t been added into the viability assessment. From spotting these errors we squeeze out a little more affordable housing, even during the Planning meetings! Strangely these errors always seem to benefit the developer (I love spotting them). It is essential that all viability assessments are seen as early as possible to ensure that the developer pays his/her fair share of obligations. In a city, land is so scarce and each land site is effectively a monopoly. Open book pricing would be the optimum way of ensuring best value. (It would often be done like that in a business if it had monopoly suppliers). Viability assessments are the nearest we have to that.
The Government thinks simply bringing in more competition is the answer and they want to encourage new entrants by reserving smaller plots of land for them. I told them: Developing smaller sites will be expensive as there are not the economies of scale using current building methods. Therefore you should encourage novel building technologies that are suited to smaller sites e.g. prefabrication, wood perhaps, etc. Once the market is established for such technologies then the suppliers and developers with the expertise can eventually compete for the larger sites. Adopting the new technologies route would mean your percentage targets should refer to adoption of non-standard technologies on those pockets of land. This is similar to the “industrial strategy” approach that government finally seems to have bought into.
On Green Belts: These are a double edged sword. From the point of view of city dweller it constrains development, increases land prices (limits the supply of land) and ensures that rents and property prices increase. But it does stop urban sprawl and helps cities build to a high density and become more sustainable places. It is also important for nature. In Bristol, because of these effects, we are having to build some of our affordable housing provision, over 10,000, outside the Green Belt as it’s is not possible with current national planning and economic policies to build enough inside. This will meet our planning numbers but I worry whether the homes will actually work. Once people move in, I question whether the homes will actually be affordable, because to get to jobs there is a lot of travel required and that is expensive. I fear it will create out of town ghettos with many stuck on benefits. The answer is not to relax the Green Belt but to either change transport policy so these people get cheaper transport or to ensure higher levels of affordable housing are built inside the Green Belt. Affordable housing that works is key to reducing the homelessness crisis and I don’t think Government really know how to resolve the crisis which is caused by you not facing up to and solving these big problems.
Bristol's growth is strangled by the Green Belt. But on balance its possibly for the best?
Sage and Onion May 14th 2018 - Part of a submission to HM Government suggesting improvements to the Planning Process.
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