Issue 12

LAND REFORM IN URBAN SCOTLAND

By David Adams

A new Land Reform Bill is now before the Scottish Parliament, drawing on the earlier work on the Scottish Government’s Land Reform Review Group (LRRG). But unlike the LRRG report, which covered the whole of Scotland, the current Bill is focused very largely on rural areas.

Why have the important LRRG recommendations on housing and urban development not yet been taken forward by the Scottish Government, especially as most of the people of Scotland live in towns and cities not rural areas?

There’s a limited consultation currently underway on the LRRG’s urban recommendations, but so far no commitment to action. So it’s time to highlight some of what the LRRG proposed to speed up the development and redevelopment of urban land in Scotland and to ensure places are built to a much higher quality in future.

Public interest led development

The LRRG recommended that in future there should be much greater emphasis on public interest led development (PILD) in Scotland. This is where a local authority, government body or other public sector agency plays a leading role in driving forward major development to achieve specific public policy objectives, such as providing more housing, generating new employment or creating better quality places.

… Why have the important LRRG recommendations on housing and urban development not yet been taken forward

PILD was widely practised in the UK in the decades immediately after the Second World War, with the model used to build new towns and redevelop many obsolete or bomb-damaged town and city centres. Although less frequently used now, excellent case studies of PILD can still be found among some of the projects driven forward by urban regeneration companies in Scotland, and the Homes and Communities Agency south of the border. The redevelopment of Dundee Waterfront, led by Dundee City Council is one of the best examples in Scotland today.

PILD is widespread in continental Europe where most of the recent exemplars of new major urban development have been created using this approach. Three excellent European examples are Hammarby-Sjöstad in Sweden, IJburg in the Netherlands and Vauban in Germany, all reviewed in the Scottish Government’s research on Delivering Better Places in Scotland (2011). Other continental examples which indicate what could be achieved in Scotland by such a fresh approach are Hafen City in Hamburg and Malmö's Western Harbour.

Almost always, PILD involves some form of partnership between the public sector and private-sector landowners, developers and investors. However, by acting as the ‘prime mover’ within such partnerships, the public sector can makes development happen where it would otherwise not do so, or ensure higher quality development, where mediocre development might otherwise occur.

In most cases, PILD involves public-sector land acquisition and assembly, often followed by infrastructure provision, and where required, remediation treatment. Serviced land can then be split up into different parcels and sold on to private developers. As this suggest, PILD is primarily applicable to major development or regeneration areas, rather than small individual sites. Direct control of land ownership puts the public sector in a much stronger position to ensure well-integrated and properly co-ordinated development than where this is left simply to planning control.

Housing Land Corporation

For a long time neither Scotland, nor indeed the wider UK, have built enough houses to keep up with needs and demand. The result is apparent is rising house prices and worsening affordability. Younger generations now have much less chance of owning a home of their own than their parents. Without radical action, Scotland’s housing crisis is likely to deepen over the years to come.

To remedy this, the LRRG recommended that a new Housing Land Corporation (HLC) be set up as a Scotland-wide organisation, directly responsible to Scottish Ministers for making sure that enough building land is immediately available for new housing in both urban and rural areas. Although it would work closely with local authorities (and may even subcontract some of its functions to the larger local authorities), it would have a national remit and a national purpose which the LRRG defined as “achieving Scottish Government housebuilding targets, in a way which delivers quality placemaking and improved housing standards”.

The HLC would take land into public ownership at a low but fair price, investing in the necessary infrastructure, and then selling the land to housebuilders as serviced sites or plots. It would help medium-sized and smaller builders or self-build, who often have the greatest difficulty accessing land, and not simply the volume housebuilders. Crucially, however, it would become a monopoly land supplier, but will work alongside existing market processes to bolster the overall supply of land.

The HLC would be a more efficient way to capture value uplift and invest in public goods than reliance simply on planning agreements. As well as ensuring that better designed and more energy efficient homes are built more quickly and more cheaply, the HLC would also use its control of land ownership to ensure that places as a whole are designed and built to a much higher quality than often happens today.

Urban Partnership Zones

The LRRG recommended the Scottish Government to consider introducing urban partnership zones into Scotland based on the longstanding Continental model of land readjustment. UPZ would put local planning authorities firmly in the driving seat of important redevelopment projects and encourage much greater proactive planning in Scotland.

An urban partnership zone (UPZ) would be a new statutory mechanism intended to speed up the redevelopment of land in fragmented or multiple ownership through promoting co-operation between existing landowners, the local authority and prospective developer(s).

In practical terms, a UPZ would be an area specially designated for redevelopment by the local planning authority, who would then select a development partner through open competition. Suitable partners might include housing associations, community development trusts and, of course, private developers and investors. At that stage, neither the local authority nor its development partner(s) need own any land within the proposed UPZ. A joint-venture development company would be formed between them, in which the local authority would be entitled to at least a minimum share, irrespective of any land owned, in order both to reflect its own commitment and to ensure local democratic accountability.

Once a UPZ was declared, existing landowners would acquire the statutory right either to join the development partnership or to sell out to it. This would provide a welcome means by which those already owning land and property within the UPZ could benefit from the proposed redevelopment, either financially or by taking reserved space in the new scheme. Some may even be willing to contribute to development and infrastructure costs, as well as providing land, although this would not be a requirement.

Public Interest Led Development [PILD] is widespread in continental Europe where most of the recent exemplars of new major urban development have been created using this approach

The process of land assembly would be designed to promote co-operation not confrontation between the joint-venture development partnership and existing landowners. If owner participation proves popular, compulsory purchase would need to be taken only against a minority of owners who neither wish to sell their land, nor enter the partnership. This would make such action easier to accomplish, faster, and politically more acceptable. A UPZ would also mean that on confirmation of any compulsory purchase order, title would transfer directly to the joint-venture partnership, rather than to the local authority, and the partnership would become directly responsible for statutory compensation payments.

To provide vision, direction and planning certainty, UPZ declarations would be accompanied by an overall master plan or development brief to ensure quality design and development. This would also grant planning permission in principle for the uses specified, so creating early planning certainty, reducing development risk, and enabling valuation disputes to be resolved more quickly. To prevent any fragmentation of ownership within a declared UPZ, declarations would also be entered as land charges and would entitle the local planning authority to pre-emption rights to any land and property in the area.

The UPZ offers an innovative approach to land assembly by combining a statutory framework for owner participation with greater planning certainty and, possibly, with taxation and other financial benefits. Although some of its aspects draw on successful regeneration practices, others would be quite new in a UK context. Crucially, it would enable local authorities to drive forward redevelopment projects with minimum compulsory purchase, while sharing development risk with experienced developers. With proactive planning thus closely linked to making development happen, urban regeneration would be boosted, not least within, or adjacent to, town and city centres. UPZs could also be used to promote major urban extensions and speed up housing deliver

To find out more about proposals for urban land reform in Scotland, visit the Policy Scotland website and download briefing papers on each of the six main proposals.

By David Adams

Issue 12

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