Over two weeks I spent a lot of time at two conferences at the Conference Centre in Birmingham. The first conference was the Nat Fed Conference and one of the key issues that I discussed with David Orr was the whole question of land ownership and how it distorts affordable housing objectives. This segues me neatly into the second conference – the Lib Dem jamboree. The link is ‘The Land’. Most people know that the Tories conclude their conference with a rendition of Jerusalem whilst new Labour ends with a mumble of the Red Flag. We Lib Dems also have an anthem. Admittedly we sing it at a ‘glee club’ the night before the close and are quite heavily fueled by beer but we sing our anthem with gusto:
“The Land, the Land,
God gave us all the Land.
The Land, the Land,
The ground on which we stand.
Why should we be beggars with the ballot in our hand?
God gave the land to the people”
Well he might have given it to the people but they didn’t keep it for long. Much of our land is controlled by private interests some of whom have held it since Saxon times. But the aristocracy are not the only ones.
Organisations like Tesco and private builders land bank. But we know that eventually that land will be used. Far worse are land speculators who realise that land is a scarce commodity and seek to make massive gains from changes in land values caused by planning permission granted or denied.
It is those land values that make the major difference to house prices. Yes of course there are differences in the cost of building a two bed house in a city, a suburb or in the middle of nowhere. But those differences are minor compared to the cost of land which can vary from a negative value in places where massive remediation is required to £squillions where developers and house buyers can fight for the meagre opportunities available.
What we need to do varies from place to place.
In Liverpool and other cities we own a lot of derelict land. We acquired it over the years for a variety of reasons such as clearance of derelict industrial sites and clearance of areas of unfit housing. That land may not have a market value until is remediated but then we can really think of imaginative ways forwards. From 1st April next year every council in England will have a power of ‘General Competence’. This will enable us to enter into commercial and other relationships in ways that we have never been able to do before. What could we do if we put the housing land into a JV either for nothing or in such a way that would take out a land value when the development was complete or 10 years later or never if it was to be our way of helloing affordable housing? What if the council the put in as capital its 6 years New Home bonuses and moved some of its mainstream programmes around to look at issues like site access. This moves homes fro m unaffordable to affordable for both sale and rent.
At the other extreme we have councils where land ownership is minimal; where there is little or no land needing remediation. So what can we do about that circumstance? Take unreasonable profits out of land values by giving local councils greater control of land use and enhanced compulsory powers which would enable them to but land at a pre planning permission price instead of an inflated post planning permission price. This would of course be done in the spirit of localism by doing is as a result of a neighbourhood planning activity which will be available in another part of the Localism Bill. The council wouldn’t need to sell the land but take the entire land value out and hold the land in a land trust. By taking the land value out the initial price is reduced but by holding the land in a trust that trust can continually ensure that the land value is kept out of the resale of the property allowing new home owner after new home owner to benefit from a subsidy which is currently only achieved by the first owner.
Some will think that this is a somewhat Stalinist suggestion. In fact Lib Dems proposed these types of initiative in our housing policy which we adopted in 2005. I chaired the Commission that produced it. The idea certainly will not appeal to those who are blue in beak and claw! But there is really no alternative. Having a home is not a lifestyle choice but a basic right. We regulate the price of other basics for life like power and water so why not do the same for land if it affects our ability to deliver those homes.
The principles are the same in both cases:
- The council needs to have strategies based on their knowledge of the needs and opportunities of their area.
- The council needs to be imaginative about the new powers it is about to be given particularly the opportunity to involve
- The council needs to control land by using its powers to the full.
All agreed? Excellent! So get a pint in your hand and off we go:
“The land, the land ……………….”