Our current mainstream development model squeezes out design value to maximise returns for landowners. Must we rely on the charity of landowners to achieve good design, or should we look elsewhere for solutions?
Perception that quality places depend on altruistic landowners
I was recently at an RTPI regional event and as always heard some incredibly interesting perspectives from RTPI members. One thing in particular stuck with me: there was a consensus among public and private sector planners that high quality place-making was almost always only possible with an altruistic landowner.
This means a landowner who was prepared to give up some of the uplift in land value to pursue good design (and/or affordable housing or other public benefits).
The mechanism underlying this hypothesis is fairly simple - if the landowner wants to maximise their profit, they will sell to the buyer who offers the most money. In order to maximise their bid without cutting into their profits, the developer must drive down all other costs.
This means little is left over to invest in high quality design. Thus good design relies on an altruistic landowner - most commonly a public sector owner or large rural estates.
Is this defeatism or is it true?
RTPI award winners suggest this is probably overly-defeatist given that many of the incredible winners did operate on a market basis. We know good planning can help deliver good development even in a competitive market context.
However, notable exceptions aside - it is clearly a major and widespread issue. So what proportion of housing is built on land sold at less than highest market price?
At another recent event I asked a consultant working with a range of large estates how many of them he thought were prepared to sacrifice market value for quality and affordability.
He suggested that the vast majority of big estates would be prepared to sacrifice some uplift as they see themselves as stewards who think in the long-term. However the actual sacrifice in uplift would probably only be 10-20%. And this certainly doesn’t apply to all land sales.
Furthermore there are obvious problems with development guided by the paternalistic desires of individuals rather than the needs and demands of local people as represented by democratically elected representatives or community groups.
What can we do?
If the problem discussed here is even close to being true, this has major implications for delivering quality housing. Might this mean that the current market model is fundamentally unable to deliver high quality housing on a systematic basis?
There are certainly ways of encouraging more landowners to fund design. Appropriate Housing is one such model proposed by Philip Graham, a ‘land partnerships’ approach involving financial partnering of landowners and residents.
We can also use planning policy and design codes to improve design - the latter may get a steer from nearby residents on what design they want to see.
Getting land at the right prices is key
But we should also consider whether a new approach is needed if we want to deliver the numbers and quality of housing we need. Rather than relying on altruistic landowners we should look at how more land can be developed by the public sector and communities.
Our research on local authority housebuilding has found that local authorities are increasingly attempting to drive up design quality by getting directly involved in housebuilding themselves. Meanwhile community-led development, where communities truly participate in the design process, can have great outcomes, including for design.
There has already been some support for this, for example the removal of the Housing Revenue Account borrowing cap for local authorities, and the establishment of the Community Housing Fund.
However, to support a widespread shift in the housebuilding market we may need also land market reforms to get more land on the market at prices which leave space for high quality place making.
So the short answer is yes, we do have ways to deliver design value without depending on altruistic landowners, but they are achieved with great difficulty and arguably not on a widespread basis.
To change this we need increased support for public sector and community-led housing, and land partnerships.
This question is at the core of new research I’m involved in with the UK Collaborative Centre for Housing Evidence Centre (CaCHE). We are exploring how design is implemented at each stage in the development process – read more about the project here.
Blogs do not necessarily reflect the views of the RTPI.
Policy Officer, RTPI
Tom Kenny leads on housing affordability for the policy and research team at RTPI. You can find him on twitter @tomekenny.