Create big businesses to build British towns or risk failing on housing pledges - think tank

by Matthew Ponsford | @mjponsford | Thomson Reuters Foundation
Thursday, 2 February 2017 00:01 GMT

Semi-detached homes in the Willesden neighbourhood of northwest London are seen in this 2014 archive photo. REUTERS/Suzanne Plunkett

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Big scale planning projects would create jobs in low-employment rural and urban areas which currently fail to attract investment in housing

By Matthew Ponsford

LONDON, Feb 2 (Thomson Reuters Foundation) - Britain must embark upon a radical project of town building to avoid falling short of its targets to build one million new homes by 2020, a leading think tank said on Thursday.

The Centre for Policy Studies, a pro-market policy institute with historic links to the ruling Conservative Party, called on the government to create independent businesses tasked with constructing entire towns.

The report said the businesses, know as Special Purpose Vehicles (SPVs), would kickstart the building of communities on a scale comparable to Milton Keynes, a town of 200,000 built in the 1960s and 1970s to relieve housing shortages in London and southern England.

Daniel Greenberg, a lawyer and specialist on legislation law who co-authored the report, said the government would act as guarantor for the project to provide the certainty that private sector developers require to make large investments.

"Areas that at the moment nobody could justify investing heavily in building on will be turned into thriving new communities, with large amounts of housing where people want to live, can live, and enjoy living," Greenberg told the Thomson Reuters Foundation.

Successive British governments have promised to tackle a shortage that has seen house prices spiral in London and other major cities out of the reach of many buyers, while social housing is in short supply.

But developers have complained about a lack of available land and strict planning laws that outlaw development on "greenbelt" land around existing towns and give local councils the power to block construction.

PLANNING AT SCALE

In an SPV, the government could bundle its mission to build homes with a town's other assets - including infrastructure, transport, schools and workplaces, said Greenberg.

By planning at this scale, the projects would create jobs in low-employment rural and urban areas, which currently fail to attract investment in housing.

The report said the system would be based on the existing planning framework for national transport, electricity and water projects - which circumvent usual planning permission requirements - and be backed by compulsory purchase order powers to evict existing landowners.

Areas designated as protected "greenbelt" should be scaled back to encourage building, said the report.

Greenberg said local governments would be able to build specific requirements into the SPVs, including provision for green spaces and public buildings.

Greenberg declined to give examples of where in the world SPVs had been used successfully in city building, insisting the idea was not based on other projects.

However, they have gained prominence recently in cities across India as part of the country's controversial Smart Cities scheme.

They are used to accomplish Prime Minister Narendra Modi's pledge to create 100 Smart Cities by 2022 with living standards comparable to Europe and meet demand for housing amid the country's breakneck pace of urbanisation.

The plan has been criticised by activists and academics for creating expensive private cities for the rich while failing to preserve public space, or meet the needs of poor residents. .

(Reporting by Matthew Ponsford, Editing by Astrid Zweynert.; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit http://news.trust.org)

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