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Land Value and the Undersupply of Affordable Housing Duncan Bowie, University of Westminster Housing Studies Association York 1 5-17 April 2014. Components of presentation. Historical overview – theories of land Land and planning in 1909 and since - a century of reform

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  1. Land Value and the Undersupply of Affordable HousingDuncan Bowie, University of WestminsterHousing Studies AssociationYork 15-17 April 2014

  2. 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

  3. 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)

  4. 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

  5. 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

  6. 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arising from town planning • 1910 Budget (Lloyd George) 20% tax on capital gains on disposal of land • 1920 Land taxes repealed.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.

  7. 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

  8. Post WW2 • 1944 Uthwatt report on betterment • 1947 Town and Country Planning ActNationalisation of development rights. • 100% development charge on development land payable to Central Land BoardCompensation payable to landlords who were refused right to develop land • 1952 Repealed by Conservative government

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 • 1970 Repealed by Conservative Government

  10. 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

  11. 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 tax2011 Localism Act. Power for Local Planning Authorities and Mayor of London to introduce Community Infrastructure Levy – a tax on new development

  12. Land and housing costs

  13. Land costs per hectare- 1983-2010 England (excluding London)

  14. Land costs per hectare 1983-2010 London

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

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

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

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

  19. 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% ?)

  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

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