Brownfield land that is considered suitable for housing development has the capacity to support at least one million new homes.
Putting brownfield first: overcoming barriers to redevelopment
Much of this land is located within our towns and cities, often in an excellent location to make the most of existing infrastructure. However, the question remains, if this land is available and is suitable for housing, why has it not been developed? Our new housing foresight report considers the obstacles that are preventing this development.
There is ample brownfield that lies undeveloped to its full potential in England. While it needs to be identified that not all brownfield land is suitable for development, approximately 35,0001 hectares of this land is considered suitable for housing. This land is often viewed as favourable for development by local communities and planners but still it remains undeveloped.
Understanding the construction sector
The reasons for this remaining lack of development are complex. A key point may be that the construction sector is overly reliant on profit driven, large-scale house builders looking to maximise value from each new home sold and to capitalize on cost efficiencies to boost profitability. The inevitable result is that the land which is the cheapest to purchase and the most efficient to develop will be targeted. This is often contentious green space at the edge of urban areas, the development of which is unpopular amongst local communities.
However, viability is another key obstacle that prevents brownfield development. To carry out construction, developers require profit levels of between 15-25% while they also need to factor into appraisals a realistic price that will incentivise landowners to part with land. Due to the high expense of the development process and landowners often unrealistic perceptions about how much a developer can pay to secure their land, brownfield sites are often perceived as unviable. Complex land ownership structures on brownfield sites also hinder development. It has been estimated that 20%2 of brownfield land is in unknown ownership and the lack of accurate land ownership information exacerbates this problem.
Physical issues increase development costs
Brownfield land often has significant physical issues that increase site preparation costs. While contamination is often cited as a key issue, developers can also face abnormal costs such as the removal of underground obstacles, the demolition of existing buildings and the irregular shape of many plots of land also hinders development. These abnormal costs can severely impact upon the viability of development schemes.
Problems with the approach to planning
The lack of a sequential approach that prioritises brownfield development in national planning policy is allowing the promotion of greenfield sites and out of date planning documents are also failing to identify strategic brownfield sites. Local planning policy is also not doing enough to promote allocate small scale brownfield sites for housing development.
Developers can be encouraged to build on brownfield
To increase the level of housing delivered on brownfield land, the Government has the opportunity to implement four measures: Firstly, developers must be encouraged to build out planning permissions that have already been secured on brownfield land. In London alone, there are 125,0003 residential units with planning permission that remain uncompleted. Taxing the completed value of these units, 24 months after planning permission has been granted can discourage speculation and provide much needed additional finance to local authorities.
Secondly, the relief structures offered to developers to aid site remediation (on contaminated sites) must be improved. Tax relief structures offered currently by Government are not fit for purpose and are burdening the developer with high remediation costs. Remediation should always be the responsibility of the polluter first and asking the community to pay for remediation through tax relief should be a last resort. However, to facilitate brownfield development where a polluter cannot pay for remediation, Government can incentivise increased development by offering improved taxation relief structures for remediation for proposals that meet certain housing criteria.
Planning policy and funding must be looked at
Thirdly, it is essential that national planning policy sets out a sequential approach to land allocation which prioritises brownfield land. Clarifying and structuring the use of both compulsory purchase orders and local development orders, with systems in place for community engagement, has the potential to overcome land ownership obstacles and deliver new housing.
Fourthly, Government should use tax increment financing as a way of funding the delivery of new housing on strategic brownfield sites. This recognises that the supply of new infrastructure or housing can lead to an increase in property values in an area and can therefore increase the potential level of taxation in that area. Government can trade this future projected tax income to help fund the delivery of new housing in an area at the present time, with the debt finance issued to pay for new housing returned over a set timescale into the future.
While we welcome the current government focus on brownfield development, current measures are not enough to increase brownfield development and protect sensitive green spaces from development in the long term. By considering implementing the mechanisms identified in our report, the Government can show that it is serious about wanting prioritise the delivery of new housing on brownfield land.
1 DCLG statistics, 2010
2 Homes and Communities Agency, 2009, Previously Developed Land that may be Available for Development
3 London Councils, 2013, The London Housing Challenge: A London Councils Discussion Paper, London Councils
Find out more
The objective of the Campaign to Protect Rural England’s Housing Foresight Series is to provide evidence-based research papers that support innovative policy solutions to critical housing issues.
The purpose of the series is not to set out the Campaign to Protect Rural England’s official policy position on the future delivery of housing. Rather, it will explore a number of ‘blue-sky’ policy solutions with the aim of inciting and provoking wide ranging discussion over the future shape of housing policy.
Download our report: Removing obstacles to brownfield development (3MB PDF)
Help us find out how much brownfield land is available by nominating brownfield sites in your area that could be suitable for housing development in the future.