Why the Budget is Only Half Land Value Capture

Only the land value capture from new infrastructure – not the value created by the community from existing infrastructure and the act of zoning.

That i’m sure is to come – New Town Development Corporations have little point without it.

Red Book

Land value uplift – In this year’s Housing White Paper, the government committed
to respond to the CIL Review. DCLG will launch a consultation with detailed proposals on the
following measures:
• removing restriction of Section 106 pooling towards a single piece of infrastructure
where the local authority has adopted CIL, in certain circumstances such as where the
authority is in a low viability area or where signifcant development is planned on several
large strategic sites.8
This will avoid the unnecessary complexity that pooling restrictions
can generate
• speeding up the process of setting and revising CIL to make it easier to respond to
changes to the market. This will include allowing a more proportionate approach than the
requirement for two stages of consultation and providing greater clarity on the appropriate
evidence base. This will enable areas to implement a CIL more quickly, making it easier to
set a higher ‘zonal CIL’ in areas of high land value uplift, for example around stations
• allowing authorities to set rates which better refect the uplift in land values
between a proposed and existing use. Rather than setting a fat rate for all
development of the same type (residential, commercial, etc.), local authorities will have
the option of a different rate for different changes in land use (agricultural to residential,
commercial to residential, industrial to residential). All the protections for viability from CIL,
such as the Examination in Public, will be retained
• changing indexation of CIL rates to house price infation, rather than build costs.
This will reduce the need for authorities to revise charging schedules. This will ensure
CIL rates keep up with general housing price infation and if prices fall, rates will fall too,
avoiding viability issues
Section 106 agreements are legal agreements between local authorities and developers. They are a mechanism which makes a development proposal
acceptable in planning terms, which would not otherwise be acceptable. Section 106 agreements provide site specific mitigations.
• giving Combined Authorities and planning joint committees with statutory
plan-making functions the option to levy a Strategic Infrastructure Tariff
(SIT) in future, in the same way that the London Mayoral CIL is providing funding
towards Crossrail. The SIT would be additional to CIL and viability would be examined in
public. DCLG will consult on whether it should be used to fund both strategic and local


One thought on “Why the Budget is Only Half Land Value Capture

  1. Pingback: A Housing Budget: the good, the bad, the interesting | Shelter blog

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