Land value capture may be illusury

Responses to the consultation on DHCLG Select Committee

"The effectiveness of current land value capture methods" must be sent to the select committee by 2 March 2018 at

http://www.parliament.uk/business/committees/committees-a-z/commons-select/communities-and-local-government-committee/inquiries/parliament-2017/land-value-capture-inquiry-17-19/commons-written-submission-form/

Not that I am in a position to tell anybody what to say,  but I think that the following points might be of relevance and helpful to the committee members.

As with any changes to the planning system it would be helpful to simplify matters. The basic principle should be that any introduction of capturing land value supersedes either the existing use of CIL or s106.  

Any belief that there are huge windfalls to be captured from the uplift in land values attributed to the grant of development permissions should be tempered by the fact that this is a classic zero sum game.  Inflated land values are simply a function of inflated house prices. Maintain the former and the latter will follow suit. Reduce house prices and there will be little land value left to be captured
 

The Government has been largely responsible for house price inflation. If the demand side stimuli of funding for landing, Help to Buy and intermediate housing  (allowing the purchase of only part of the equity) were removed the price of new houses prices would fall.  Government should be severely embarrassed by the profits being declared by the major builders that are largely created by Government subsidies (a Persimmon Director taking over £100m in share options). Similarly unacceptable profits are being made my land owners and traders. A number of Tories (including Nick Boles but not Lynn Truss) realise that very few votes would be lost were the value of development land to be decided by the DV (subject to appeal).  The beneficiaries would be all the purchasers of realistically priced homes.  S.106 should be used to secure the provision of necessary infrastructure.  This should be interpreted more loosely (Written Ministerial Statement required) to allow for new development to make a contribution towards existing infrastructure (ie wear and tear and a direct benefit to the developers new customers).  Permitted development rights to convert rural buildings and offices into dwellings without permissions of CIL/s.106 payments should be repealed.

Recommendations

Remove all government demand side stimuli which currently fuel house price inflation and go straight into the profits of developers and landowners. Remove all the CIL regulations.  Allow LPAs to secure the funding of all ‘necessary infrastructure’ by dismissing appeals where developers are seeking permissions to develop ‘on the cheap’ and placing the infrastructure burden on the new and existing residents and businesses.  Remove all permitted development rights which allow dwellings to be created without paying for necessary infrastructure.  Where land with permission is not being developed, CPO powers should be used to secure this for self-custom building, or social housing.  There should be reinstated requirements for self/custom builders and social housing providers to pay for necessary infrastructure (costs that would be reflected in the land price.

 Summary

The need is to reduce housing subsidies rather than introduce any more mechanisms  to capture increases in land value.  In most if not all parts of the country house prices will be high enough to create sufficient value to pay for necessary infrastructure.  It is unlikely that 300,000 would be built (and sold) at the proper values when demand side subsidies have been removed.  The Government should be prepared to bear the electoral costs of any decreases in house prices ie increases in affordability, that should arise from removing the subsidies.

Community Led Housing

A brief post in order to give a little more publicity to the report at

https://www.housinglin.org.uk/_assets/Resources/Housing/OtherOrganisation/Community_Led_housing_Report_2017.pdf

The report is too long and rich in examples to summarise here.  There is a clear message that CLH is popular with users, councils and housing providers but that the efforts being made to produce a few thousand units are disproportional to the gains.  The main stimuli seem to be financial assistance to enable CLH to be provided on difficult sites not attractive to the volume builders.  The potential seems to be greatest where the market cuts these innovative forms of housing some slack but there are some councils in high property price areas (notably Bristol and Brighton) which seem to be managing to promote CLH. Although CLH does come in a range of sorts and sizes it does not yet acknowledge the potential for custom splitting that would benefit from Local Development Orders in areas where the LPA feels subdivisions would help provide opportunities to downsize-in-place by encouraging new households to share in the splitting of existing properties.
However, the main message from the report is that Councils should make it easier for CLH to be realised. It seems perverse that the best forms of housing from economic and social points of view are the hardest to achieve and 150,000 houses of a more individualistic nature slip effortlessly (there are of course some flawed housing schemes that are rejected locally and on appeal) through the system.  A rational planning system would privilege CLH by ensuring all permissions reserve land for that purpose and can only be built out by conventional developers if there is no demand for CLH. 

Housing for the new farmers

When a permission is granted for an agricultural worker's dwelling in the countryside it can seem so simple https://www.theplanner.co.uk/decision/appeal-unpredictable-alpaca-breeding-justifies-rural-accommodation
The farmer can explain that a modest income (if local plan policies require this test) would be sufficient and that livestock do essentially need close attention.  It seems that this is not the first time that the birthing habits of alpacas have been relied on but I think that 10acres of well chosen land (ie not AONB or National Park) and signs of real dedication/investment, were more persuasive than the couple of alpacas.
If the Government and planning authorities want to rely on the test of essential need in the NPPF (the Framework) then more of these new dwellings are likely to be allowed.  However, in my humble opinion, it would be better to see new farms being established on the edge of towns and villages where farmers and their families can rely on the normal facilities while being housed on the holding. Local food systems can be regenerated. However,  this would require the planning system to recognise the food supply  as a legitimate concern, and become proactive in securing affordable land and affordable housing from most if not all new peripheral developments  through s106 planning obligations.  The planning system should be persuaded of the need for positive action and not having to learn from their failed attempts to prevent determined new farmers chancing upon sympathetic inspectors.  That is not an intelligent way to move systematically to an agroecological renaissance. 'Planning' by definition is to address issues in a proper way and, where there is a public interest (ie see the ORFC agenda), become main facilitators, not failed gatekeepers.

Planners should understand that 'real' farming is different

This is a short account of the 2018 Oxford Real Farming Conference.  My offer to run a session on how the land use planning system could help in providing access to land (and housing) and in the regeneration of local food systems was not accepted so I can only report on other impressions, not all apparently relevant to land use planners.

Firstly it is important to know that there were 800 delegates and 300 unable to be offered a place! If Donald Trump’s very first concern as POTUS45 was how many people were at the inauguration, fellow politician Michael Gove MP and Sec of State for Defra should have been impressed by the youthful crowd of well connected activists packed into the Town Hall, many of whom seemed to be similarly impressed by the minister’s intentions (or rhetoric?). He had lunch with representatives from the Landworkers’ Alliance who are arranging meetings at Whitehall that will hopefully take place whoever is SoS.  It was interesting to hear the man who disparaged the views of experts, with whom he happened to disagree in the lead up the EU referendum, now rely on experts when looking at pesticides etc.  It seems that he is taking the science on climate change seriously in looking towards a zero carbon economy by 2050 or even earlier.

There was a session on  ‘Why access to land is vital for sustainable, healthy and fair food systems’ the publication of which can be found through a Web search and includes a number of ideas that can be found in my food related posts.  This coincided with The People’s Food Policy (also on the Web) that does not.  However, in future, food related posts (some as responses to Government consultations) will be copied to them.

In response to my claim that land use planners were not engaged in agroecology, access to land, forest gardens etc I was pointed to the AESOP conference at Coventry Uni in Nov 2017 on sustainable food and planning.  Hopefully that event attracted members of the planning establishment who can put ideas into practice?  

Finally, it was interesting to learn about the readily available kit(s) that could measure the nutritional density of food products and the carbon content of soils.  Readers will know that this Blog concentrates on the planning law as is and expressing opinions on how policy can be influenced and applied.  However, a case has been made for addressing the question of whether different forms of agriculture have materially different impacts ‘in the public interest’.  Claims were made that there were no statutory controls over the production of food.  There are of course regulations applying to animal welfare and seeds but nothing, it was being claimed, to distinguish between industrial scale agriculture and agroecology and ‘organics’.  Land use planning is a creature of statute and there are controls (eg conditions under s.70 and obligations s106) that could ensure that developments are carried out in the public interest which could include securing access to affordable land and buildings.  However, the law does not allow for ‘good’ agricultural practices to be distinguished from unsustainable and damaging regimes.  The ability for these distinctions to be measured (including scales of biodiversity?) is a necessary precursor to arguing for a change in the law that would allow planners to privilege the good and disadvantage the bad.

The obsession with the car and road building

In the tradition of DanthePlan attention is being drawn to a Government consultation: Proposals for the Creation of a Major Road Network (MRN) Consultation;  Moving Britain Ahead

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/670527/major-road-network-consultation.pdf

to which replies should be submitted by 19 March 2018.

MRNconsultation@dft.gsi.gov.uk

Responses are requested on the online form of pre-set questions.  However, these do not deal with the assumptions behind the funding of major roads. 

The Consultation says that, “Road schemes can create new links between communities and workplaces to deepen local labour markets, connect housing developments to the network, provide new routes on city and commuter networks or contribute to creating places that promote wellbeing through the management of congestion or provision for public transport.”  However, the MRN proposals are clearly very partial, and alterations to the road system can only be properly assessed on a systems-wide basis, including all other modes.  While public transport competes for both funds and for passengers/users, funding for bus/coach services is ruled out by the eligibility criteria. The MRN proposals are also very uncertain in the context of imminent changes to the road transport system relating to electrification and automation.  Other than the fact that these technological changes are likely to be very disruptive there is no consensus as to what they will mean for the transport system as a whole. Part of this uncertainty is created by the Government not being pro-active in seeking to ensure that the changes to be implemented will be positive (in terms of accessibility, fairness, and carbon reduction/elimination) and, instead, is pursuing a private transport/road-building agenda which is likely to frustrate positive changes or reduce their effectiveness.

The MRN is all about road transport without any mention of carbon reduction targets where the transport sector is a laggard due mainly to car traffic (although road freight is also very significant). There is no analysis of how road building will help to make the transport system carbon neutral by 2040?   Given the close correlation between deadly levels of air quality and road traffic it is hard to support major road schemes which would exacerbate the medical, moral and legal issues being faced. Reducing congestion could reduce emissions until, as the NIC points out (see below), the extra traffic being encouraged by the road building recreates the same congestion but with more vehicles involved.

In ‘Congestion, capacity and carbon 2017’ the NIC stated, “It is possible, though expensive, to build more capacity on longer distance roads on the outskirts of cities, unlike in the city centre. But any such new capacity is still unlikely to solve the congestion challenge. Instead, it enables people to make different choices about where to live and work, and when and how to travel, which generate benefits for those individuals, but quickly fill up the new road space."  The MRN is being specifically promoted as building capacity in a way that the NIC has explained would be self-defeating.

A systemic approach is necessary to know whether any MRN scheme would meet the overriding objectives to, ‘reduce congestion, support economic growth and regional rebalancing, support housing delivery, support all road users, support the SRN’.  Increasing capacity on a major road will often increase traffic on the SRN that in many areas is also at capacity, and would actually increase congestion. Similarly a major road scheme could attract passengers away from public transport.

            Local authorities are experiencing real problems in maintaining their existing roads (a very significant issue for cyclists as road margins erode).  Most if not all subsidised bus services have been lost (leaving pensioners with freedom passes with no services).  But filling potholes and public transport enhancements are specifically excluded from this scheme.  In fact bus lanes and gates could be the only road ‘improvements’ that should be funded.

The technical as opposed to political response to congestion is a lower national speed limit. As the VIBAT study demonstrated this would be a necessary if not sufficient measure to reduce carbon emissions from transport. The reference to variable speed message signs shows an awareness that part of the carbon saving from lower speeds would be due to reduced congestion, but the modal and power shifts necessary to a low carbon transport system would not occur.

Clean Growth Strategy

Clean Growth Strategy (CGS): Published 12 October 2017

Comments to be sent to CleanGrowthStrategy@beis.gov.uk

All planners would know that the Foreword to the NPPF states that  ‘The purpose of planning is to help achieve sustainable development….Sustainable means ensuring that better lives for ourselves don’t mean worse lives for future generations’. Greg Clark who wrote that is now Business Secretary responsible for the Clean Growth Strategy.  Readers of this blog will also be familiar with  Planning to reduce carbon emissions 2 that suggests that planning  for the use of land and building could reduce emissions by 50%.  It is very disappointing that the CGS barely mentions land use planning.

By painting an overly positive picture (the successes amount to low hanging fruit - closing of coal burning power stations and exporting manufacturing emissions.), the CGS underestimates the scale of the challenges being faced, in particular the de-coupling of GDP and carbon emissions.

The  CGS is not pretending that emissions from aviation will reduce (ie no questioning of the building of more runways) but seeks to rely on ‘flexibilities’ which are actually carbon offsets which it  might be necessary to reserve for more essential services than aviation, which is largely a luxury.

Global temperatures are already 1degree above the agreed datum and the agreed target is now 1.5degree that is half the increase of 3 degrees which is predicted to result from the current budgets. Worse, the investments already made in energy infrastructure would use up the world carbon allowance by 2050. In order to meet the fourth and fifth carbon budgets (covering the periods 2023-2027 and  2028-2032) the CGS accepts that there will need to be a significant acceleration in the  pace of decarbonisation. The Committee on Climate Change gets a mention but the requirement for it to take cost effectiveness into account in making its recommendations is left out. This is a major constraint on its ‘objectivity’ and reliability in advising Government.

It can only be for ideological reasons that the CGS relies on market signals and subsidies (grants) as the main agents for change.  There are areas where regulations (eg  planning controls and lower speed limits) should be considered as more likely to trigger the systemic changes that are needed.

It is interesting to see agriculture (UNCTAD estimate responsibility for up to 50% of global emissions) occupying a prominent part in the CGS.  “To support greater productivity of agricultural land, …use precision farming technologies on smaller scale farms, … and investigate methods to improve soil health and carbon stocks...Emissions from land use and agriculture falling by 26 per cent on today’s levels. This could mean that woodland cover (over 11 million trees) increases by up to 16 per cent and the emissions intensity of agricultural outputs could improve by 27 per cent.” The Government should be looking to the land use planning system to deliver these reductions but in more holistic and socially beneficial ways; forest gardening would offer some of the answers.

For housing the proposals are very disappointing, relying on building regulations and not planning.  The report at http://www.rics.org/Global/Whole_life_carbon_assessment_for_the_BE_%20PG_guidance_2017.pdf deserves a blog to itself but shows how the RICS is ahead of the RTPI in addressing climate change in its area of influence.  The RICS is also doing further work on setting benchmarks for the carbon targets to be met by development through planning requirements.  BEIS may be regretting  the damage done by the last Government and the Housing Standards Review and might be working its (and DCLG’s ) way back into carbon saving mode.  This is where the RTPI and planning lobby (such that it is) should be helping.

Under-occupation is not recognized as a problem, ‘consequential improvements’ are specifically rejected and cusping has not appeared on the radar.   Reliance is being placed on innovative construction methods including factory production and off-site manufacturing. It is unclear whether the CGS is up to date on the promise of biogas and syngas  and replacing gas boilers would be unnecessary if only consuming ‘green gas’ (and not fracked and fossil gas).

On transport (seen to be responsible for 24% of emissions)  there is a wait for more efficient vehicles and driving behaviour without any recommendations as to the regulations that would help (ie lower national speed limits). As David MacKay said in ‘Sustainable energy without the hot air’, a reduced speed limit would reduce carbon emissions at the twiddle of a knob (ie it could be immediate, equitable,  and at no pubic expense).

These are just a of the few points that could picked up from the CGS by those interested in helping the Government  create a regulatory framework that would have a reasonable chance of reducing carbon emissions in line with domestic and internationally agreed targets. 

 

Putting faith in planning

I have just attended two conferences looking at the future.  The SE EcoConnect event was about retrofitting about 20million homes by 2050 without adding to this liability.  A number of speakers introduced ‘elephants’ to the room (skills shortages, the privately rented sector, the wealthy owner occupier, condensation/ventilation, the extreme urgency of reducing emissions), such that the land use planners in the room (ie just me) were seriously outnumbered by the gathering herd.  This was just one more example of a conversation where the planning system might be key to the transition to a low carbon and sustainable future  (see Planning to reduce carbon emissions 2) but are being (self) excluded from the conversation – others being local/regional food, the health of soils, flood alleviation, mental health, social care, low carbon transport. I introduced the concept of custom-splitting (see previous posts) as a way to improve the balance between the size of houses and the size of households so that we get to a place where we insulate and heat the spaces we actually occupy.  I can’t say that this was greeted by as much interest as skills shortages, the performance gap between specification and implementation etc.

The second conference was organized by the TCPA on the day after a Budget that included no measures designed to reduce carbon emissions.  In this event the planners significantly outnumbered the elephants (actually under-occupation in Harlow not so New Town threatened to fill the room for a few minutes) but came up with more questions (and frustrations) than answers.  My suggestion that custom-splitting  dropped into the pond with no ripples apart from a private conversation revealing that the occupiers of a garden suburb in Bristol is looking at a Local Development Order to make subdivisions permitted development (together with detached dwellings/annexes at the end of the generous gardens) subject to some detailed design guidance. 

The TCPA inspired Raynsford Review is looking at the whole planning system and finding that nobody seems to agree with anybody else about what is to be done.  My suggestion was that taking a transition to zero carbon Britain by 2050 as a ‘given’ and an organizing principle could enable the Review to concentrate on those changes consistent with this energy/emissions descent and reject those that would not be.  This might concentrate minds and expedite the process.

Finally, I should mention two other events.  Peter Head (formerly of ARUP) gave the Nathaniel Litchfield lecture to the RTPI describing a collaborative planning process within which us land use planners might play a minor role.  His optimism was based on the extent that faith leaders had bought into the environmental agenda www.arcworld.org/downloads/FAQ-ZUG-ARC-event.pdf.

This was followed by an Oxford Martin talk describing price signals that would direct multi national corporations along a low energy path.  For those of us not in the 80% who subscribe to a world religion, or believe that the capitalist system will necessarily save itself, and us with it, there is less cause for hope.

But we should not need ‘hope’ as a motivation for concerted action; ‘conviction’ should be sufficient.