1. Introduction
1.01 I am a Chartered Planner with over 40 years experience of working in the public, private and voluntary sectors.
1.02 The basic principle must be that any new system of land value capture supersedes either the use of CIL or s106. Given that it has taken 6 attempts to get CIL to ‘work’ my strong preference is to abandon it and continue to rely on s.106.
2. Commentary
2.01 Great caution should be shown before reaching the belief that there are huge windfalls to be captured from the uplift in land values attributed to the grant of development permissions. This is a classic zero sum game where the inflated land values are simply a function of inflated house prices.
2.02 The Government should understand that it is largely responsible for house price inflation. If the demand side distortions 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. The Government should be severely embarrassed by the profits being declared by the major builders that are largely created by Government subsidies. Similarly unacceptable profits are being made my land owners and traders. 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.
2.03 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).
2.04 Permitted development rights to convert rural buildings and offices into dwellings without permissions of CIL/s.106 payments should be repealed.
3. Recommendations
3.01 Remove all government demand side stimuli which currently fuel house price inflation and go straight into the profits of developers and landowners.
3.02 Remove all the CIL regulations.
3.03 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.
3.04 Remove all permitted development rights which allow dwellings to be created without paying for necessary infrastructure.
3.05 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 (reflected in the land price.
4. Summary
4.01 The need is to reduce housing subsidies rather than introduce any more systems to capture increases in land value. In most if not all parts of the country house prices will be sufficient 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 will have to bear the electoral costs of any decreases in house prices ie increases in affordability.
January 2018