Monday, March 28, 2011

Genuine localism in planning and housing

The mystery deepens over the meaning of 'Localism' a term coined by the UK's Coalition government. So far in planning terms it means that top-down housing targets from Whitehall have been abandoned in favour of local decisions as to where homes are to be built. So the new homes that are estimated to be needed annually, especially in the south-east of England, are not being built. Local opposition to large scale housing developments on green fields is powerful. Local authority councillors who decide these things will not approve unpopular schemes for fear of being thrown out of office. But how can communities grow in a way acceptable to those communuities? 

In The Free Lunch- Fairness with Freedom (p85) the case is made for the needed housing to be spread around more, so that all communites would grow a little. The increase per annum needed, using 2002 figures, was deeemd to be 1% growth in housing stock.  For a small town of 3000 people this would mean about 10 new houses/flats each year. Such small scale development, maybe even on green field sites at the edges of towns and villages, would probably be more acceptable than suddenly throwing up a 300 homes over 2/3 years. 

The Financial Times today  Property levies to fund top rate cut and also the leader Planning to grow has two Coalition ideas.  1. A council tax /stamp duty claw-back on the value of £2m plus homes and 2. Land auctions of planning permission. First: To merely rely on stamp duty inhibits property sales and there are reports of avoidance schemes. The council tax option is by far the most effective way to capture for the public purse the publicly-generated value of land from existing publicly-granted planning permissions. It would be regular, will not distort market supply and hopefully is less avoidable. Second: Land auctions would capture the large one off gain generated from new planning permissions.  

Suggestions from The Free Lunch thinking: 
1. Set a growth factor. Consult the residents of each city, town & village for an acceptable housing growth factor. Starting with 1% as a minimum growth in new homes per year, would a higher figure be acceptable? 1.2%? 1.7%? 2%? This figure to be cumulative, or not, by their choice.
2. Value your new planning permission. All landowners for planning applications involving new dwellings would be asked what price thay would be prepared to bid for the grant of permission. This would be an extension of the current levy already charged (Section 106 agreements) for development. An annual sale might be held to compare values. 
3. Gain in local authority's funds.  New revenue would be achieved as owners valued their gain. Part of what currently is taken by private landowners from a public grant of permission, would be fairly given to the public purse. Public grant = public benefit.  Quid pro quo.  
4. Planning - where would these homes be built? Take as a starting point the current tightly drawn town and village settlement boundaries. The local authority would receive all bids at their auction and be able to choose between offers, taking into account not only price offered, but conformity to existing planning policy. The option to build beyond the existing boundary could be considered and might be subject to lower density building perhaps, or other restrictions. 
5. Council tax adjustments  
The idea of a levy only on £2m + value properties each year on their existing value should be extended to all properties. This would need to be matched with a reduction in income tax, et al. 

6. Summary.
a) Public gain for publicly granted privilege. At the point of development and annually.
b) Improved ability to meet market needs generally. Also, in particular: with perhaps some low-density family-appropriate homes beyond settlement edges.
c) The provision of more new housing.  
d) Volume house builders would need to adjust their business model to the new small development scenario.
e) A new presumption of appropriate development, responsive to market needs and local feelings would be the guide. Housebuilding would be encouraged and bring more land on the market, with land values moderating. Rather than value going into land prices, value would go into better built and better designed homes.

 Buy the book: The Free Lunch - Fairness with Freedom
 posted by Charles Bazlinton .


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