Land Value and the Undersupply of Affordable Housing Duncan Bowie, University of Westminster Housing Studies Association York April 2014

Components of presentation –Historical overview – theories of land –Land and planning in 1909 and since - a century of reform –Land costs and affordable housing : London case study –Options for reform

Concepts of land –Natural rights theory: –Gerard Winstanley: Digger manifesto (1649) –Thomas Spence: Real Rights of Man (1775) –William Ogilvie: Essay on Property in Land (1782) –Thomas Paine: Agrarian Justice (1796) –Patrick Dove: Elements of Political Science (1850)

The Chartists and land –Feargus O’Connor : The Chartist Land Plan and peasant proprietorship –Bronterre O’Brien and land nationalisation –The Land and Labour League, the First International. Marx and Martin James Boon

Mid/late Victorian radicals and land –James Stuart Mill and the Land Tenure Reform Association –Abolishing primogeniture ; Limiting inheritance; Free transfer of land –Alfred Russell Wallace and the Land Nationalisation Society –Henry George and the Single Tax

Pre WW1 Legislation and land –1909 Housing and Planning Act. Tax on undeveloped land ; tax on development value – 50% on increase arising from town planning –1910 Budget (Lloyd George) 20% tax on capital gains on disposal of land –1920 Land taxes repealed. Repayment to landowners.

The collectivisation of land value –The radical attack on the ‘unearned increment’ –Royal Commission on Housing of the Working Classes (1885) supported taxation of development land –Betterment and civic enterprise –The role of the London County Council –The Association of Municipal Corporations –The National Housing Reform Council –The Workman’s National Housing Committee –Ebenezer Howard, the Garden City movement and the trustification of land value appreciation

Post WW2 –1944 Uthwatt report on betterment –1947 Town and Country Planning Act Nationalisation of development rights. –100% development charge on development land payable to Central Land Board Compensation payable to landlords who were refused right to develop land –1952 Repealed by Conservative government

The 1960’s –1967 Land Commission Act Establishment of land commission with power to acquire, manage and sell land – 40% levy on land disposals Betterment levy -40% on land sold, leased or realised by development. Collected by commission and paid to central government. –1970 Repealed by Conservative Government

The 1970’s –1975 Community Land Act. LA had power to acquire development land at current use value. –1976 Development Land Tax Act. 80% tax on development gains (66.6% tax on first £150,000). (50% to LA; 30% to central govt; 20% to LA pool) –1980 Repealed by Local Government, Planning and Land Act

1990 and Beyond –1990 Town and Country Planning Act s106 Provisions for Local Planning authorities to seek contributions to community benefit related to a planning consent – planning gain/planning obligations Not a tax 2011 Localism Act. Power for Local Planning Authorities and Mayor of London to introduce Community Infrastructure Levy – a tax on new development

Land and housing costs

Land costs per hectare England (excluding London)

Land costs per hectare London

London house prices since 1996 Mean Quarterly London House prices since 1996

Mean Quarterly Houseprices 1996 Q1 to 2013 Q3 – City of Westminster

Land costs before the recession £m per hectare in 2007/8 Land costs in London before the recession: £m per hectare in 2007/8

Land and Industrial Site Values: Outer London and South East (VOA Jan 2011)

Suppressing land costs –Getting public land into development programme at discounted value –LA power to CPO sites at existing use value (EUV)– unallocated sites –Limiting uplift in relation to EUV for consented sites ( maximum uplift of 20% ?)

Ensuring public share in development gains –The problem of s106, CIL and development viability –Joint ventures –Public sector equity stakes in development –Reactivating the Betterment principle – taxing value appreciation post consent