Tag: land value

Land value capture to have a proactive role in place making

Ways in which Scotland can successfully harness land value capture to create places where people want to live are being explored by the Scottish Land Commission.

Focus on how to capture the increase in the value of land due to publically created uplifts such as improved infrastructure, planning permission and wider societal changes has increased with the current policy debate in Scotland around the Planning Bill. 

There is a call to give planning authorities the ability to acquire development land at values closer to its existing use.  Planning authorities will then benefit from the uplift in land value generated when the sites receive planning permission to fund investment in the infrastructure required to support the development.

To inform this debate the Land Commission has published the sixth paper in its Land Lines discussion series.  The paper ‘Local authority land acquisition in Germany and the Netherlands: are there lessons for Scotland?’ looks at the experience of other countries, in particular the Netherlands and Germany, and suggests what lessons Scotland might learn from this experience.  The paper’s author, Professor Tony Crook, examines how local authorities could capture more of this “development value“, using it to facilitate improvement.

The report findings suggest that the key difference between practice on the continent and Scotland lies more in the overarching approach to planning and land assembly than the detail of the compensation arrangements used to support it. 

The Commission is looking at land value capture to help deliver well-planned sustainable communities in places people want to live and at prices they can afford to pay.  To work towards this they have identified five connected opportunities to explore how the uplift in land values can be shared to greater benefit:

  • More effective use of existing mechanisms to fund different types of infrastructure in different areas
  • Availability of highly skilled multidisciplinary teams in both the public and private sector
  • Greater use of planning policies to shape land values by clear and consistent application of planning policies to reduce the difference between existing use value and full market value
  • Investigate the potential of land pooling and the opportunity presented by the “masterplan consent areas” proposed in the current Planning Bill to deliver this
  • Investigate the use of local property taxation to capture more of the uplift in land values generated from wider societal change to help fund infrastructure and place-making.

Commenting on the report, Shona Glenn, Head of Policy at the Scottish Land Commission said that the debate about how to capture the uplift in land value associated with planning permission for public benefit is a long standing one and a debate that is now once again, very topical.

“It is important that we learn from what has worked elsewhere and adapt it to the local context, so that we can help to deliver well-planned, sustainable communities

“Effective solutions to capture the uplift in land value for the public benefit need to combine looking at compensation and compulsory purchase with wider changes designed to support place-making and a more proactive role for planning authorities.”

The Land Commission’s next steps are to review the most effective ways in which to capture the increase in land value and specifically the opportunities for land pooling and assembly as a means to help deliver it.

Report points way to using land value increases to deliver new housing and development

A report published today points the way towards effective approaches for Scotland to use publicly created increases in land value to help finance the infrastructure needed to deliver new housing and other development.

Written for the Scottish Land Commission by a team from Heriot-Watt University, the report reviewed the UK’s historic experience of land value capture and identifies what lessons current policy makers could take from this experience.

The report concludes that previous attempts at introducing land value capture have failed largely due to the absence of political consensus. Connected to this, schemes need to be well resourced and seen to be fair, to command public consent.

However, with politicians of all persuasions now talking about the issue, it may now be possible to shape an approach that works.

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.

The value of well-connected land, with planning permission, located close to public amenities is typically much higher than land without such advantages and typically arises because of the public sector granting planning permission or investing in infrastructure.

Talking about the report, Hamish Trench, Land Commission Chief Executive said that 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.

“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. A solution may well involve a range of approaches suited to the different market conditions and geographies across Scotland. In many parts of Scotland – and elsewhere in the UK – market demand for housing is relatively low so there is not a large value to capture.

The ability of public authorities to acquire land at or near existing use value has underpinned some of the more successful attempts at capturing land value both in the UK (New Towns) and elsewhere in Europe.

“Changes to the rules of compulsory purchase and compensation could be part of the answer to capturing publicly created uplifts in land value” explains Mr Trench “but our 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.”

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.

Today’s report is one in a series of pieces of research on land for housing and development, a priority area of work for the Scottish Land Commission.

Read the full report here.

Read the Commission’s briefing paper here

Land Commission to look at potential for land value taxes in Scotland

The Scottish Land Commission is asking for tenders to investigate international experience in land value taxes to identify policy options for Scotland.

The Land Commission has issued a notice on Public Contracts Scotland (PCS) asking for contractors to submit tenders to carry out research in to the range of ways land value taxes have been used. This will inform future consideration of land value taxation options for Scotland based on the experiences of other countries.

Land value taxation is a tool for raising public revenue through an annual charge based on the rental value of land and typically levied against the unimproved value of that land not taking into account any buildings, services or infrastructure.

Chair of the Land Commission, Andrew Thin, said:

“Land value taxation has been an important element of the land reform debate in Scotland for several years and the Scottish Government has asked the Commission to look at the potential for land value based taxes.

“This initial work looks at how land value taxes have been used to realise relevant policy objectives elsewhere and what practical issues would need to be addressed in considering their use in Scotland.

“The work will also assess the potential of land value taxation in contributing to a more productive, accountable and diverse pattern of land ownership and use in Scotland. The final report, which is due to be submitted to the Commission in June 2018, will identify a set of potential policy options for further consideration.

“We are keen to stimulate discussion on if and how land value based taxes could help make more of Scotland’s land with stakeholders and amongst the general public. This important piece of work is the first step on that journey.”

Completed quotes must be submitted via PCS by 12:00 noon on the 19 January 2018.