House of Lords puts weight behind brownfield first policy

February 25, 2016 in Blog, Contaminated land

In the first of two blogs, we summarise the recent House of Lords National Policy for the Built Environment Committee meeting. This blog will focus on the key points on the role of brownfield land to meet the housing need and the issues in achieving this.

It has been the policy of successive governments to promote development on brownfield sites as a priority over and above greenfield development. Though the NPPF does not contain such a policy it does encourage local authorities to consider a “locally appropriate target” for the reuse of brownfield land, and states that planning policies and decisions should encourage the effective use of land by re-using such sites. Overall, Local Authorities have a formidable target of 90% of brownfield land to have planning permission by 2020. There is less consensus, however, over specific policies to promote brownfield development.

Brownfield and greenfield needed to meet demand

The Committee reported that the Government has undertaken a range of initiatives to support brownfield development including introducing a £1 billion “brownfield fund” to help cover site remediation costs. The introduction of permission in principle and a brownfield register to identify sites which are suitable for new housing development, as proposed in the Housing and Planning Bill, is intended to expedite the granting of planning permission on brownfield sites.

It is apparent, however, that brownfield land alone will not resolve England’s housing shortage. Even the most optimistic assessments of brownfield land availability would still require some greenfield housing development to meet demand.

The Committee supported the maintenance of Green Belt policy as an effective brake on sprawl, but that finding the right sustainable greenfield sites will be key, but not so that they undermine the delivery of housing on brownfield land.

The Committee agreed that the Government should consider strengthening the priority given to brownfield development, including considering the reintroduction of a “brownfield first” policy at national level.

Incentivising to make viable

But how is this achieved? For developers it is all about viability and as they are not charities, they exist to make a profit. 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.

To carry out construction, developers require profit levels of typically 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.

In London alone, there are 125,000* residential units with planning permission that remain uncompleted.

One point of focus for the government could be the tax relief structures offered to developers to aid site remediation. These could be improved as they currently burden 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, the Government could incentivise increased development through improved tax relief structures for remediation for proposals that meet certain housing criteria.

The Lords’ recommendation will add further weight to the announcement last Autumn by George Osborne on freeing up brownfield incentives. Time will tell if these start to gain any traction.