Monday, 22 October 2018

Land Value Capture > "measures which could radically increase housebuilding"

The idea of 'capturing' rises in land value is gaining ground considerably:
Futures Forum: A solution to our housing problems: share the increases in the value of land with local communities
Futures Forum: Land value tax > A growing number of thinktanks and politicians support imposing a tax that would take a slice of rising land values.
Futures Forum: A solution to our housing problems: tax land values and give councils powers to benefit from planning approval windfalls
Futures Forum: A solution to our housing problems: land value capture
Futures Forum: Council tax should be replaced by a land value tax
Futures Forum: Land Value Uplift Tax >>> "Public investment on or near a piece of land significantly increases its value wherever you are."

Over the weekend, the Telegraph highlighted goings on at the Treasury:
Landowners to be forced to sacrifice profits for more affordable houses, under plans expected to be unveiled in budget - Telegraph

It might happen:
Land Value Capture - parliament.uk
Letwin review 'to recommend land value capture measures' | Planning Resource

Or not:

Final Letwin Review to Recommend Increased Land Value Capture – But May Resists


So why have MHCLG [Ministry of Housing, Communities and Local Govt] officials been playing this down (i.e. reform of the Land Compensation Act 1961 to extend the no scheme world principle to all development land?) as the article says Downing Street and Treasury ‘locked in the discussion’ the pull back can't be Gavin Barwell – who put LVC  in Manifesto – it must be the Prime Minister as ever [be] putting the brake on measures which could radically increase housebuilding.


Landowners to be forced to sacrifice profits for more affordable houses, under plans expected to be unveiled in budget

Councils would be able to strip landowners of large portions of profits from the sale of their land, under proposals expected to be unveiled in the Budget, The Sunday Telegraph can disclose.

An official review commissioned by Philip Hammond, the Chancellor, is to endorse controversial calls for the state to “capture” more of the increase in value of sites when they are granted planning permission.

Sir Oliver Letwin, the former minister carrying out the review, is expected to recommend that local authorities should be able to seize greater amounts of landowners’ profits in order to fund the construction of local infrastructure such as roads and affordable homes.

Downing Street and the Treasury are now believed to be locked in discussions over how radical an approach the government could endorse. Sir Oliver’s final report could go as far as recommending the compulsory purchase of land at discounted prices that exclude the “uplift” in value from planning permission.
But some are pushing for less radical measures, amid fears the use of compulsory purchase laws would be toxic among many traditional Conservative supporters.

Mr Hammond is planning to set out Sir Oliver’s proposals in the Budget on October 29, although the Chancellor is likely to fall short of formally adopting any ideas until they have been further scrutinised by the government.

Separately, sixty councils across England have pledged to build council homes on a scale not seen since the 1970s, in an open letter following Theresa May’s decision to lift a borrowing cap currently imposed on local authorities.

Sir Oliver’s report comes amid growing calls from MPs, charities and think tanks, for the state to claw back more of the increase in value that landowners gain from planning permission granted by local authorities, including with a radical overhaul of compulsory purchase laws.

Developers warn the campaign advocates a “wholesale erosion of private property rights” and insist that existing mechanisms already allow councils to extract money for local infrastructure.

Sir Oliver’s focus on further capture of land value came in the final months of his review of the “gap” between the number of planning permissions granted to developers and the number of homes actually being built.
“In carrying out the review he has alighted in the fact land owners are making more money than they should,” said a source familiar with Sir Oliver’s discussions.

Addressing current slow “build out” rates of homes due to be constructed, Sir Oliver is expected to set out recommendations designed to ensure a greater mix of homes on large sites, including by handing over portions of the biggest sites to smaller developers in order to help increase the rate of construction.

He told The Sunday Telegraph in March that the main reason for the slow rates of construction was that homes on the largest sites were too alike, both in terms of the buildings themselves and their surroundings, and the “tenure” of the properties – whether, for example, they were ultimately aimed at private purchasers or renters, or those who would be renting through local authorities or housing associations.

Final Letwin Review to Recommend Increased Land Value Capture – But May Resists | Decisions, Decisions, Decisions 

See also:
Futures Forum: Transition Exeter >>> Thursday 18th January >>> Monetary reform and land reform - comfortable bedfellows?

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