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Susan EmmettThe road to more housing
The government’s Transport Investment Strategy can bring forward new housing development but councils must think strategically to make the most of the opportunity, writes Susan Emmett
School is out, parliament is in recess and the great escape has begun.
Family cars are being piled high with kit necessary for summer survival, soon to join the thundering traffic crawling through small towns and stuck on congested A roads on the way to a scenic village, often too expensive for locals to afford.
Away from the confines of the office, the British holiday season provides the chance to do some fieldwork into the government’s recently announced Transport Investment Strategy and what it means for housing.
“Improving or creating new routes can open up new sites for viable housing developments.”
Central to the proposals is the creation of a new major network aimed at improving productivity and business links by tackling bottlenecks and traffic jams that make commuting to work or school a misery for road users.
Up to £1bn a year is expected to be ringfenced from the £5.8bn raised annually from vehicle excise duty.
Cash will be given to local authorities and targeted at projects that help rebalance the economy.
Increasing housing delivery is well up on the list of priorities.
Improving or creating new routes can connect communities to workplaces, deepening local labour markets and opening up new sites for viable housing developments.
One example is the new dual carriageway between the A5 and the M1 in Bedfordshire to help relieve congestion and improve connections between local villages. But there is more.
Part funded by developers and Central Bedfordshire Council, the new road provides access to the development area north of Houghton Regis and is expected to accommodate 7,000 houses.
Handing funds for road improvements directly to local authorities is expected to encourage more councils to follow this approach and deliver similar schemes. But why stop at municipal boundaries? Housing markets don’t.
The importance of transport infrastructure to unlock development is acknowledged in the Housing White Paper. So is the need for more effective cross-boundary planning.
Hidden in the White Paper’s annex are ideas to encourage more ambitious strategic policies, whether plans are produced by individual councils, a group of authorities, a combined authority or an elected mayor.
When it comes to aligning infrastructure and housing strategy, councils will achieve more if they collaborate with neighbours, build partnerships and consider land values before a single road improvement scheme is announced. There is nothing like rumours of a proposed transport upgrade to generate developer interest and push up the price of land.
This is especially the case when a change of use is on the cards. The value of agricultural land lies below that of industrial land and can be a fraction of residential land. As things stand, landowners and developers taking a punt on the change of use reap the benefits of that value uplift.
Yet high land values will do little for the end result.
The more developers spend on the land, the less there is left to spend on local amenities, public areas and affordable housing.
Quality suffers and communities lose out.
The money will go further if local authorities manage the escalation of land prices paid by house builders.
“The scope for councils to capture the uplift in the value of land conferred by their granting of permission is substantial.”
Many routes have been explored for capturing a greater proportion of land value uplift from planning permission – usually in the form of taxation and developer contributions. The Community Infrastructure Levy (CIL) is one example. Tax increment financing, as used in California, is another.
But what if the councils owned the land themselves? Or better still developed a partnership approach with a long-term vision?
The scope for councils to capture the uplift in the value of land conferred by their granting of permission is substantial. This uplift should be used to deliver new neighbourhoods that communities really want.
Great places need a mix of amenities, shops, schools, well designed public areas, green spaces and different housing types. That includes building homes across a mix of tenures from houses for sale and rent on the open market to a spectrum of subsidised affordable housing.
This might be an opportunity to think differently about development models such as joint ventures with landowners willing to draw land receipts later in the development process, rather than getting all the cash upfront.
“Councils will have more buying power clubbing together and pooling resources.”
Change requires bigger thinking with regards to long-term gain from the use of public land and council assets. It might involve a discrete shopping spree, targeting sites adjacent to those already in public hands and the possibility of a compulsory purchase order to complete the land assembly.
Councils will have more buying power clubbing together and pooling resources. There is a role here for landowners, public bodies, pension funds, equity investors, house builders, master developers and development corporations.
Combining housing delivery with transport strategy, which we saw in last year’s Autumn Statement with the announcement of the £2.3bn Housing Infrastructure Fund, the Housing White Paper and now in the infrastructure investment strategy, is essential.
Local authorities must follow it through with the detail at ground level, building partnerships and planning long-term if we are to make the most of this opportunity for more housing.
Susan Emmett, head of housing and urban regeneration, Policy Exchange
