Saturday, September 10, 2011

New Planning Policy: Make everyone a developer

Planning policy battles are being fought in the UK as the Coalition government tries to make  'localism' work. Local people are to be the prime deciders on what is build around them and not powerful landowners through development companies.

Let's get back to first principles. Take a standard developer case such as a landed family going back hundreds of years. They have a few thousand/hundred acres, maybe a small town at one end of the estate, and several villages dotted around.  Some village homes will have been sold off over the years to raise cash for the family, as the accumulated wealth of the decades  is picked off to pay for a grand wedding reception, to buy a house in another area for a family member, or even to supplement income for a trust fund.

Over the decades the wealth is turned into money perhaps from the development of a few houses built in a large back garden;  or from a little estate of densely packed homes tacked on the edge of a village.  Value accumulates on land - which it does over any 15/20 year period or so - just the sort of timescale a landowing family can wait for. No rush. Just wait as the economy of the country picks up, people start again to have the money to put down a deposit, banks get more confident and lend, a town bypass is built (to make land jump an extra 10% in value in a very few years ), a school improves and familes want that catchment (another few %), property prices rise.  

So the landowner who has land more than enough for his or her own living space is silly not to wait until prices rise. They benefit from the taxation money of road building, from the taxation money that went into the schooling system, from the efforts and hard work of everyone who held down a job and drove the economy forward. Ordinary people's work and taxes directly drive up land prices, for the benefit of all who own land and especially those who have spare land beyond their own home needs.

To solve the Coalition government's planning problem of The People vs The Developers is simple. Very simple. Make everyone, every citizen, a gainer from development. Annually take the wealth that is attracted to land solely from citizen effort, and pay a Citizen's Royalty to everyone, regularly. Everyone made the wealth, so let it flow back to everyone. Don't take a proportion of value that arises because someone worked hard and built a valuable home extension, that is their own property. Don't touch it. But do repay the effort of us all in working together to make a successful economy, that raised the land price whether the extension was built or not.

That will bring a solution to planning dilemmas. If the Citizen's Royalty had a local dimension a referendum point could be put: These proposed developments in your neighbourhood  will bring  another 5% lift to the regular £1000 a year payment for every member of the family. Do you want the payment or do you want the green fields left? 

Read The Free Lunch - Fairness with Freedom to see how this idea could work practically and financially and take the battles out of planning decisions. Localism must have the tools to make it work. Give everyone the chance to stand where a developer stands. 
Posted by Charles Bazlinton.

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