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Policy Exchange - Wave of new garden villages could create over one million homes

Report proposes reform of the New Towns Act to empower local authorities to design and build the homes they want, where they want.

Current planning system, fosters NIMBYism, land rationing, and land speculation, says think tank report.

Over one million new homes could be built over the next decade if each of the 353 councils in England built just one garden village of 3,000 new houses.
A new report by leading think tank Policy Exchange argues that a future government can overcome local opposition to development by devolving powers to set up new garden villages from Whitehall to councils. Under the proposal, locally led development corporations, set by councils, would be charged with master-planning, setting quality design standards for the construction, and allocating some of the plots to self builders and housing associations, for a new wave of garden villages.   As part of a quid-pro-quo, councils agreeing to build new garden villages sufficient to meet their housing need would be allowed to rule out having development around existing communities forced on them through appeal.
Authored by Lord Matthew Taylor, who advised the last Labour government and the Coalition on planning policy, the report highlights the problems with the current planning system. The paper explains how currently new development is based on building around existing communities, predominantly on the green spaces at the edge of a town most valued by local people. The resulting high land values can lead to developers building higher density and lower quality houses and, because  much of the land value uplift goes to the land owner, less money remains to pay for vital infrastructure and place-making amenities.
The system therefore triggers a “vicious cycle” where locals get the thing they fear most: poor quality, badly designed and dense housing estates right on their doorstep, with increased congestion on local roads, and so opposition to further development intensifies.
The report highlights how this has led to a situation where between 1997 and 2007 – ‘the boom years’ – we built on average just 148,000 new homes a year. The consequences of this can be seen in an inexorable  rise in house prices relative to wages, making homeownership ever more unaffordable for many people. There are now 3.3million 20-34 year olds living at home with mum and dad – up 700,000 since 1997 – and there are 1.7million households on local authority waiting lists.
The report calls for a radical new approach based on amending the New Towns Act to create financially viable new garden villages:

  1. Empower local authorities to use the New towns Act to designate sites for new small market towns and villages typically consisting of up to 5,000 homes as part of their Local Plans
  2. Allow local authorities to pay fair compensation to homeowners and landowners affected by the new development at a flat rate of 150% of market value at the existing use
  3. Ring-fence the subsequent land value uplift for the new community to provide for its infrastructure and amenities.
  4. Make plots available to a range of competing providers, including self-build and smaller builders, responding to market demand
  5. Rule out planning by appeal around existing towns and villages for local authorities making these allocations

Lord Matthew Taylor, author of the report said:
“Over the next 20 years we need to build around 300,000 new homes every year to keep up with demand and address the existing backlog of housing need. The current planning system – based on tacking on homes to existing towns and villages – ramps up local opposition to new development and makes it politically challenging for councils to meet local housing need.
“Our planning system also makes it predictable which land will eventually be released for development. The undersupply ratchets up the value of this land exponentially. As the land is acquired much of the financial gain are captured by the landowners and speculators, not the local community.
“It is therefore vital that we turn the system on its head. Empowering councils to create new garden villages to meet local housing demand and capture all the land value uplift is critical if we are to win over the support of existing residents and build the homes we so desperately need.”           
Chris Walker, Head of Housing and Planning at Policy Exchange said:
“It is little wonder that NIMBYism has thrived in this country, given housing development today steps so crushingly on the toes of existing community residents –. Building new homes through locally-created new garden villages moves us away from this failed model, which for a generation has failed to build enough homes.”
“Fuller land value capture also answers the question about how infrastructure and amenities are paid for, providing local people the assurances that existing infrastructure and services won’t become overburdened and so reducing their opposition.”
“Ultimately, delivering new homes through localism requires the support of local people – this paper proposes how to achieve that.”
For a copy of the full report contact Nick Faith on 07960 996 233

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