Global cities: different approaches

Capital gains

24 July 2018

How can cities improve the way land is used for housing? Nicholas Falk reports on research into the approaches taken by different cities around the world

A request from James Murray, Deputy Mayor for Housing and Residential Development at the Greater London Authority (GLA), has led to the research report Capital Gains: a better model for land assembly in London, from consultancy URBED. There are eight fresh international case studies, which drew on URBED’s contacts and study tours, looking at good practice in France, Germany, the Netherlands and the USA and Canada.

The report makes 10 proposals for improving land assembly, including compulsory purchase and compensation. A number of recommendations are based on London’s past experience in Croydon, Docklands and King’s Cross, as well as the team’s practical knowledge – which included legal advice from Dentons and property advice from Gerald Eve – and are already being implemented, such as strengthening the GLA’s housing team.

Recommendations for London are to:

  1. introduce a new planning designation of 'land assembly zone' (LAZ);
  2. require in-principle commitments to use compulsory acquisition powers;
  3. identify a lead body for land assembly;
  4. allow confirmation of compulsory purchase orders (CPOs) ahead of planning consent;
  5. allow mayoral confirmation of local authority’s CPOs;
  6. require developers to use compulsorily purchased land within a certain period of time or lose it;
  7. introduce statutory land pooling;
  8. freeze land values in LAZs;
  9. let district councils defer planning applications in LAZs for up to two years; and
  10. create a multidisciplinary team to assist in all aspects of land assembly with additional finance.

What kind of growth?

As cities compete internationally to attract investment, many are adopting smart-city concepts such as the Internet of Things in the hope that digital technologies will resolve problems such as congestion or service provision. University cities such as Cambridge and Freiburg in Germany as well as Asian cities such as Singapore are leading the way, as we found in research for a Chinese developer that builds more than 100,000 homes a year.

But if smarter urbanisation is to succeed, infrastructure and new development needs to be properly integrated. Far-sighted agreements are required to bind partners over the many years it takes to complete a major new settlement. These can be used to vet and advance major development proposals.

Smarter urbanisation

Strategic spatial strategies are advocated in the UK’s revised National Planning Policy Framework, which will require local authorities to fulfil an overriding set of objectives. In my view, these should be evaluated against not just housing numbers or viability but also the criteria that matter most. Three concerns trump the others:

  • tackling congestion and cutting the time to get to work;
  • providing good housing that is affordable to all; and
  • generating well-paid jobs that support local services.

Places that have applied these three principles are likely to outperform comparable locations. While there are limits to what can be achieved in areas that have suffered most from industrial decline, case studies suggest there is a large, untapped market for something different in areas of rapid growth that would appeal to those who currently make long commutes.

Suburban drawbacks

The conventional new British suburb favoured by many volume housebuilders performs poorly against all three tests. It is car-based, often in locations that cannot be served economically by public transport or cycling, and monofunctional. Housing tends to be largely for sale, requiring long-term commitments as well as substantial deposits.

Such housing does not suit the kinds of people employed in the knowledge economy and the lifestyles they adopt. At its best, in a new town such as Milton Keynes, the conditions for family life may be good, but neither the elderly nor the young professional are well catered for. Rental options are very limited compared with either the Netherlands or Germany.

The Chinese mega-city

Chinese mega-cities with more than 10m residents each are successfully housing a fast-growing urban population moving in from rural areas. But because housing can only be built on previously developed land, old villages have been replaced by 30–40-storey tower blocks linked by roads that are often congested. Residents have little opportunity to meet their neighbours and children have nowhere to play. Furthermore, the rental market is underdeveloped, and the choices for workers in the knowledge economy are limited.

Something different will be needed as places mature. Though current planning policies aim to cut travel times and also pollution, the urban form is hard to reshape. With the Chinese government wanting some 1,000 new towns, something less wasteful is needed in terms of land and energy.

Compact cities

The continental or compact city model in contrast has grown up over centuries, even though many centres such as Freiburg had to be completely rebuilt after the Second World War. At the heart of such cities is an excellent public transport system supporting dense streets, not tower blocks, and with car-free areas where ordinary people can cycle safely. Most housing is for rent, which makes it much easier to build new settlements fast.

In the new town of Ørestad, part of the Danish capital, land value uplift has largely funded the metro line from Copenhagen to the airport. Innovations such as building groups in Freiburg or custom housing enable people to commission their own homes rather than depend on what a handful of housebuilders offer. With more time on their hands, young people can start up enterprises and enjoy a fuller life in the bars and cafés that spring up in car-free centres. New housing is designed to save energy and cut costs. These are 21st-century garden cities.

Four-dimensional planning

We will have to think more carefully about the kinds of futures we want. Three-dimensional planning means thinking in terms of densities so activity supports integrated public transport, shops and services. Stations become hubs for intensification rather than just car parks. In turn, four-dimensional planning takes account of the time it takes to implement strategic plans.

As cities compete internationally to attract investment, many are adopting smart-city concepts such as the Internet of Things

Geographical information systems enable the main constraints to be mapped, such as areas of natural beauty that need to be preserved or those prone to flooding. Different overlays can reveal which are best suited for development or intensification or left alone. By focusing efforts on underused or poorly used land in transport corridors within 10km of towns that have populations of more than 100,000, sites can be selected with most potential for sustainable development. Development frameworks can set out acceptable floor-to-area ratios, as in Portland, Oregon, and in Hong Kong. The uplift in land values can then be shared to fund improvements to the transport system or social and green infrastructure such as country parks that benefit the wider community.

Long-term view

But development takes time, and values change as locations become established or lose their appeal – which the transformation of the areas around London’s King’s Cross or Docklands illustrates. In places that benefit from transport improvements, such as along Crossrail or the Cambridge–Milton Keynes–Oxford arc, it is vital to have a longer-term perspective – at least 20–30 years – than planning in the UK usually takes. Land is then best assembled by a body with access to patient capital.

The extraordinary quality of Paris’ Rive Gauche, the development over the railway lines into the Gare de l’Austerlitz or the apartment blocks in Porte Marianne in Montpellier, France’s fastest-growing city, are a result of providing developers with serviced plots and clear briefs.

Planning trellis

Whole areas can be turned around by investment in good-quality connections or public realm. The key is not a masterplan that tries to fix everything, but a framework like a trellis that supports and shapes growth. Strategic development is more like a game of dominoes than a jigsaw puzzle; it deserves to be called smarter because it is more intelligent and futureproofed, and the results generally look much better.

Interestingly, the test cases for the GLA research project that Gerald Eve assessed identified clear contrasts between two locations at similar distances from central London on an improved railway line. In the case of a former industrial area in west London the impact was on the station’s immediate surroundings, whereas the impact on a station by a shopping centre in east London was less and spread further out into the adjacent residential areas, with significantly different implications for land value capture.

Land assembly model

Our eight case studies from four countries involved local authorities there playing a more proactive role, usually working through subsidiary development companies and partnerships with private developers. This approach was similar to that used in the past in the UK capital, whether by the great estates that built much of central London, the comprehensive development area schemes used to rebuild bombed-out areas, the redevelopment of central Croydon as a major office centre, or more recently Docklands and the railway lands north of King’s Cross.

Cambridge lessons

The lessons may also apply to fast-growing towns and cities outside London such as Cambridge, which has grown much faster in population than other parts of the UK after the local authorities in the sub-region agreed 20 years ago to expand the city to achieve its economic potential.

A simple assessment of seven alternative scenarios against economic, environmental and social objectives by Cambridge Futures, a collaboration between the university and the local authorities, was supplemented by modelling to assess the impact of different scenarios; these ranged from new towns and strings of connected settlements to a virtual highway. The results informed a spatial planning exercise to choose the best locations for major growth, such as the southern fringe, which is almost complete, and the exemplary high-density mixed-use development by the University of Cambridge of land taken out of the green belt in the north west of the city.

At the heart of such compact cities is an excellent public transport system supporting dense streets, not tower blocks, and with car-free areas where ordinary people can cycle safely

Higher design standards have been secured through the Cambridgeshire Quality Charter for Growth under five main headings – connectivity, community, character, climate-proofing and the cross-cutting theme of collaboration – with nine principles and examples under each. The charter was based on the findings from study tours looking at exemplary schemes in the South East of England and also in the Netherlands and Germany.

Significantly, however, it has taken almost 20 years to get the first homes under way at the proposed new town or eco-town of Northstowe, while the relocation of Cambridge Airport never took place. So land assembly remains a key issue if knowledge-based cities such as Oxford, Cambridge or London are to keep ahead of their international rivals.

Conclusion

Plenty of the advantages we admire in continental cities could be achieved in England if local authorities were once again to play a more proactive and far-sighted role. English public authorities already have powers to promote development and recover most of the cost of new infrastructure where that is viable. But changes are needed to the compulsory purchase compensation process so that more of the uplift in land values can be ploughed back, rather than going to free riders, disagreements over value mitigated at an early stage in the process, and transport integrated with development.

Many of our recommendations can be implemented right away, and indeed the GLA is reinforcing its housing team to support boroughs that step up to the challenge. Others, such as freezing land values in areas identified as Land Assembly Zones, will need government support. But if the government means to fix our broken housing market, as the Prime Minister has proclaimed, then it will give local authorities the powers and resources to make things happen. The alternative is insane.

Dr Nicholas Falk is Executive Director of the URBED Trust

Further information

Download a complete “Global cities: different approaches” PDF