Infrastructure and land value

 Infrastructure and land value: Transportation and housing, Workshop 4 blog 

This was a particularly timely event given various announcements on infrastructure, most recently the Budget announcement on Crossrail 2. The potential of transportation to help deliver new housing should not be minimized. According to TfL, 85% of housing delivered since 2010 is within 1km of a rail station. From this perspective, increasing transportation provision seems fundamental to delivering more housing. There are several ways, transport can be improved: increasing the frequencies of the trains, creating new stations along the already existing lines or increasing connectivity.

In developing a number of transport schemes, TfL has looked at the potential for investment in transport infrastructure to unlock development potential across London. Whilst both the NPPF and the London Plan strongly protect the Greenbelt from development it is an option that the LSE HEIF project believes is worth considering in order to meet the long term development needs of London. The Outer London Commission’s current review of growth options for London also raises the question of Green Belt reviews, both inside and outside London.

One option would be to keep doing what we currently do: encroach slowly but surely on the Green Belt with sporadic Green Belt reviews. If this is unpopular yet politically acceptable, it is not efficient and does not appear to serve the interests of the Green Belt landscapes. Another way would be to take a more strategic approach and, here, new transport infrastructure could be a useful way to focus the attention of different interested parties.

Were we to develop Green Belt land, a key question is to how any benefit could be maximised? This is a particular issue of interest in relation to transport corridors where one important aspect could be to capture the land value uplift created by new transport connections. There is a long history of seeking to capture uplift and is a subject the Outer London Commission returns to, again, as part of its recent consideration of growth options for London. The Metropolitan Green Belt (MGB) has particular characteristics, because with restrictions on its development use, the current value should be low and so there should be opportunities for significant uplift to be captured longer term. However, it is known that developers hold a number of options on sites in the MGB that speculate on the land’s future value. Therefore, to maximise returns, new mechanisms or powers would be required which would allow for a greater gain share between the public and private sector in both the acquisition and development of such sites. This could include a system that calculates the proportion of land value uplift that can be attributed to infrastructure investment and the re-designation of land this allows.  

Another consideration was density, how much land could/should we seek to deliver near to transport hubs. Higher densities could help make most efficient use of the sensitive and finite release of Green Belt land as well as support a complete range of facilities and reduce the need for non-commuting journeys. But we would need to ensure that the potential benefits of higher density are not offset by poor living spaces including limited internal space standards. We discussed whether new homes in or near Green Belt would increase dramatically journeys made by car. Building new housing near to public transport may help discourage car use for home to work commutes. But transportation patterns are much more complicated than just the “home-job” commute (only 25% of the trips). And at the household level this is even more complicated - where a household comprises more than one person. Multi-person households may have very different individual patterns of travel to work and even where one person’s journey is serviced by public transport another’s might be best served by car.

Crossrail 1 has sometimes been criticised for adding to stations in the Green Belt where housing cannot be developed easily in response to better transport connections. We asked if Crossrail 2 might be used as a negotiating tool to demand greater housing delivery (in or out of Green Belt) and there is a strong indication from the National Infrastructure Commission that this is the case. We were reminded that infrastructure investment was also driven by capacity requirements in the existing network.