Methods for capturing development gain "inadequate", says RTPI

The methods used to capture development gain for local communities are inadequate, the Royal Town Planning Institute (RTPI) has said.

It has commissioned research to see how the section106 and community infrastructure levy (CIL) regimes compare to alternatives used abroad to capture the uplift in land value resulting from planning permission or public investment on or near a piece of land.

CIL was found ineffective by a working group that reported to ministers in February.

The RTPI’s project will compare the current mechanisms with a simple tariff mechanism and two variants of the impact fee approach used in North America.

Each approach’s ability to raise money, and its attractiveness and ease of implementation will be tested via interviews with planners, planning consultants, lawyers, valuers and developers.

RTPI president Stephen Wilkinson said: “Infrastructure is critical to housing delivery and economic growth. At a time when public finance is squeezed we have to look at new funding models to ensure infrastructure can be built at the speed and scale we need. 

“We are missing a trick by not accessing the vast potential of rising land values which currently go directly to landowners. Rising land values are a reasonable place to look for infrastructure funding and international evidence suggests there are fairer, more effective ways of sharing this gain.”

He said the present methods successfully clawed back some uplift but did not allow “local authorities to be proactive by using rising land values to fund land assembly and deliver housing”.

Mark Smulian