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14/07/2014

The key to the garden?

Words:
Old key

Her Majesty is not someone you normally associate with garden cities, but The Queen’s Speech on 4 June was historic for being the first such speech to mention them. It’s a sign the establishment is prepared to talk about new settlements once more.

Miles GibsonIndeed, the speech comes in the wake of talk across the political spectrum about new settlements. The late 1970s taboo on discussion of large-scale development has been overturned.
 
Ebenezer Howard delivered two privately financed garden cities in the absence of either a mature planning system or a bureaucratic state. The post-war state, using the vast momentum created by the nationalisation of the British economy, funded new towns for a citizenry grateful to be relieved of bomb debris.
 
Now different circumstances prevail, and housing aspirations have risen again. The delivery vehicles for new garden cities look rather different – probably a hybrid of state regulatory support and private capital.
 
The planning system has a crucial role in deciding if this programme succeeds. Planning creates huge value by granting permission in some places and not others. That value is sufficient in principle to pay investors an attractive dividend, while funding infrastructure, services, and affordable housing – and compensating those who object. ‘Planning gain’ must be delivered into the right hands at the right time – to a landowner who is interested in the delivery and rewards of long-term quality.

"The late 1970s taboo on discussion of large-scale development has been overturned"

Sadly, the planning system and the house builder business model interact in a way that makes this difficult, and land agents aren’t incentivised to encourage their clients to accept a long-term return instead of a big short-term windfall. Unless the gain can be deployed in providing more benefits to doubtful local residents, politicians will find it hard to support individual proposals. Thus, commentators’ thoughts turn to compulsory purchase, planning obligations, CIL, or other mechanisms to force landowners to surrender planning gain to organisations prepared to spend it on local quality.
 
Finding a way through this interaction between the system that creates the value (planning) and the system that controls and distributes it (land ownership) is the key to unlocking garden cities. It may involve conversations about economics and money that planners feel uncomfortable or ill equipped to have. That’s why Simon Wolfson has offered £250,000 to the person who can provide an answer. Last month we unveiled the five finalists bidding for that prize. Follow the competition at www.wolfsonprize.org.uk.
 
Miles Gibson is a town planner and prize director for the Wolfson Economics Prize 2014.
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