Inner city investment needs carrot and stick solution
Developers are to be given more financial reasons to invest in risky or unattractive urban areas – but will face tougher penalties for delaying development or building poor homes.
In response to the Callcutt review, commissioned last year, housing minister Yvette Cooper said the government would introduce new laws to prevent developers ‘merely digging a ditch’ to comply with planning regulations and then sitting on land while waiting for values to increase. She also announced fast-track contracts to speed up development on disused public sector land, potentially delivering an additional 200,000 homes by 2016. The minister also backed calls for a new delivery body to ensure all new homes are carbon neutral by 2016.
The review, by former English Partnerships’ chief executive John Callcutt, examined the barriers to delivering 240,000 sustainable, high quality homes a year by 2016. Current rewards for building quality homes were so low they ‘barely justified the effort’ and shareholders of private development companies had little reason to invest in blighted urban sites that delivered uncertain or slow returns. Councils and private developers needed to set aside a lifetime of suspicion and mistrust to develop ‘mature’ partnerships to meet the demand for good quality, sustainable homes – and to share the financial benefits of investment, it said.
It also recommended single contracts for multiple sites comprising desirable and difficult sites to give developers an incentive to take blighted sites forward.
Private developers would be encouraged to retain a financial interest in properties for shared ownership or market rental, giving them an incentive to capture returns that accrue over a longer period of time. The review argued they should be given guarantees their investment would be supported by public sector investment in infrastructure and safeguarded through long-term community management.
Poor design should be rooted out. The government is currently considering whether to use annual resident satisfaction surveys to determine which developers are selected as preferred partners and which are denied access to public funding and banned from bidding for public land. Ian Fletcher, director for residential policy at the British Property Foundation, said the review was right to emphasise public-private housing partnerships to deliver urban regeneration sites. Working together, he said, local authorities and the property industry could create the sustainable communities everyone wants to live in.
A full copy of the review is available at www.callcuttreview.co.uk.