Use Land Value Increases To Deliver New Housing - Report

A new report has highlighted effective methods of using publicly created increases in land value to help deliver new housing and development in Scotland.

The study, written for the Scottish Land Commission by a team from Heriot-Watt University, states past attempts at introducing land value capture have failed largely due to the absence of political consensus.

In addition, the report says schemes need to be well resourced and seen to be fair, to command public consent.

The report states; "Past attempts at land value capture have failed largely due to the absence of political consensus to support them. The lesson is that political consensus, based on an understanding of the principles underpinning land value capture, should be established before any major initiative is taken. Connected to this, schemes should be seen to be fair in order to command public consent.

"Under-resourced schemes have failed or have failed to be as effective as they might have been. It is important for there to be adequate numbers of staff with the right skills to make any system of land value capture to work. This might imply national level support for planning authorities or service sharing, particularly between smaller authorities."


In addition, the value of land capture "varies greatly between different areas, according to land values".

"This risks leaving authorities with low value land less able to meet infrastructure needs," the report states.

"There is therefore a case for benefits to be distributed between authorities, perhaps through the adjustment of central government grant."

Overall, the value of land is heavily dependent on the use to which it can be put and the amenities and infrastructure in the surrounding area. Well-connected land with planning permission and located close to public amenities is typically valued much higher than land without such advantages and typically arises because of the public sector granting planning permission or investing in infrastructure.

Speaking about the report, Land Commission Chief Executive Hamish Trench said ever since development rights were nationalised in 1947, a debate about how to capture for public benefit, the uplift in land value associated with planning permission and public investment in infrastructure has 'waxed and waned'.

"The shortage of affordable housing currently afflicting many parts of the UK means that this debate is well and truly back in the ascendant – but in looking for solutions, it is important that we learn from the past," he said.

"Our purpose in looking at land value capture is to help deliver well-planned sustainable communities in places people want to live and at prices they can afford to pay – something everyone can get behind. Really this is about reinvesting some of the land value in unlocking development."

Continuing, Mr Trench said one solution could be in changes to the rules of compulsory purchase and compensation, yet work so far "suggests that effective solutions will need to look beyond this".

"Changes will need to be designed to support the delivery of wider place-making objectives and be combined with a more proactive role for public authorities," he said.

The Commission's next steps will be to work with partners in the sector to explore different models of using publicly created uplifts in land value to finance investment in enabling infrastructure and to investigate further the questions of market and existing use value.

To view the report, visit here.

(LM/MH)