Monday, November 30, 2015

Capturing land value

This is very important.  I had despaired of the Government  doing anything as obvious and sensible as to introducing a formula under which land allocated or permitted for development would be transferred at a (say) 20% enhancement of existing use value.   It seemed to me that an alternative, that did not require any change to law or policy would be for planning authorities to make more realistic assessments of what new developments should pay to meet the costs of necessary infrastructure, including housing.  And then comes news of the letter from the Communities Secretary to Islington LBC.

The government's letter came after a recent planning appeal decision where the inspector had refused planning permission on amenity grounds, but accepted the developer's argument that only 14 per cent affordable housing was viable because of factors including the price paid for the land. The developer could not demonstrate it had taken Islington's affordable housing policies into account when bidding for the site, and so the council set out the first step towards a judicial review of the Inspector's decision, by issuing a "letter before claim" to the secretary of state.  Islington was then sent a response from the government legal department which confirmed it is the secretary of state's "unambiguous policy position" that "land or site value... should reflect policy requirements".  The letter set out no explicit defence of the Inspector's reasoning and stated that the inspector's decision was case-specific.  The government argued that it was not appropriate for the council to bring a judicial review claim in this case because the Inspector had decided that planning permission should be refused.  The government directed the council to the 'alternative remedy' of arguing its position in respect of viability in future applications.  Hopefully this official advice from the secretary of state will put an end to the exchange of land at prices which prevent adequate contributions to necessary infrastructure - including affordable housing.  But what also needs to be argued is that means 'genuinely affordable' relative to local wages (as per the 1992 court case where affordability was recognised as a material consideration).

Housing as been accepted as 'infrastructure in the Housing and Planning Bill and, interestingly, Lord Bob Kerslake (at the 2015 Nathaniel Litchfield Annual Lecture) has also used the same framing;
 “What is required is for housing to be seen as a vital part of the national infrastructure and planned accordingly.”  He should have added "local infrastructure" where the needs are experienced.

He added that housing needs to be planned long term and across the political and economic cycles.   Housing supply needs to be “doubled” and it needs to be held at that level for “some time". See more at:  

Having seen one argument accepted I am still waiting for a significant speech or statement that identifies the level of under-occupation in the owner-occupied sector as the most unsustainable aspect of our housing system, and  a description of the progress that would be made by building almost all two bedroomed (terraced) houses; cheaper for first-timers and last-timers, quicker to build with less materials and labour, less wasted space, more energy efficiency and  more friendly (or is that the problem?).

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