The Communities and Local Government Committee is to examine the effectiveness of current land value capture methods and the need for new ways of capturing any uplift in the value of land.
This is yet another inquiry or review into land value capture, a perennial planning issue. Should uplifts in the value of land be captured for infrastructure and housing? The vast majority of developers would agree that some uplift should be captured for these purposes. The development industry's concerns relate primarily to:
- a development gain tax, the proceeds of which are not then used for infrastructure, school or housing or it is delivered much later;
- Community Infrastructure Levy (CIL) being collected and again infrastructure not being delivered or delivered elsewhere in the borough;
- CIL being collected and s106 contributions sought as well; and
- the thorny issue that is viability.
Professor Crook of University of Sheffield has shown that s106 has been shown to be the most effective method of capturing land value and delivering infrastructure that is necessary for the development within agreed periods, as opposed to nationally imposed taxes.
S106 agreements do take time to negotiate but they are effective and should be retained. A possible and partial solution would be a requirement to submit a draft s106 when the application is submitted to expedite the negotiation.
The deadline for submissions is Friday 2 March 2018. You can find the terms of reference here.
The Committee is inviting written submissions on the following points: Are current methods, such as the Community Infrastructure Levy, planning obligations, land assembly and compulsory purchase adequate to capture increases in the value of land? What new methods may be employed to achieve land value capture and what examples exist of effective practice in this area, including internationally? What are the possible advantages and disadvantages in adopting alternative and more comprehensive systems of land value capture? What lessons may be learned from past attempts to capture the uplift in value?