The UK government should create a series of urban and regional land trusts to help solve the national housing crisis, according to a new report.
Published by City, University of London and Friends Provident Foundation, the report, Remodelling Capitalism, says the funds would manage all of the public land suitable for development with the specific goal of enabling the building of the next generation of social housing.
The trusts would be a powerful new instrument to help address the current housing crisis, according to the authors. They argue the policy would be a key way of increasing the supply of land at reasonable cost to enable public investment in social housing.
The land trusts would have five key objectives:
- Retain public land in social ownership
- Acquire additional land at existing use value
- Build social housing on public land
- Lease land to the private sector for residential and commercial development, with strict conditions on tenure, infrastructure and affordability
- Ensure that land with planning permission held by builders or investors is developed in a reasonable time frame.
The authors – Steve Schifferes, Stewart Lansley and Duncan McCann – say the land trust could be created at a minimal cost since the primary asset is already in public ownership, namely land.
The land trusts would be established by the state they would operate totally independently of it. An independent board, which would include local people, would manage the governance of the trust and ensure that it met its social goals.
The day-to-day management of the trust would be done by property management professionals.
Co-author Duncan McCann, a junior research fellow at City, said: “These are radical, but feasible proposals that would transform the way we own and manage national wealth.
“At the local level, they would ensure that land for development remained in public ownership while dramatically boosting the supply of new housing.”
The authors propose a radical expansion of the role of the state to ensure that future increase in housing supply, especially of social housing, which has been neglected for a generation.
They believe the state should be primarily responsible for ensuring there is enough land available for future housing development, building on the huge reservoir of land already owned by the public estate.
The trusts would also have the power to borrow in order to acquire land, secured against its existing land portfolio, and could be given powers to acquire land banks that are being held by private developers who are not currently building housing on these plots, and could use the proceeds from leasing to the private sector to provide infrastructure or community services.
Project leader, Professor Steve Schifferes, said: “Social wealth funds are powerful tools that can transform the economy by boosting public assets, strengthening the public finances and tackling inter-generational inequality.
“A regional fund would boost local democracy and give the community a stake in solving the housing crisis.”
The authors argue that the UK already has successfully implemented some elements of their approach which show how the land trusts could work in practice.
The Crown Estate successfully manages crown property on a commercial basis, while retaining leasehold ownership, with a high rate of return combined with social goals.
And the powers over land acquisition given to the New Towns in the 1950s and 1960s enabled them to achieve a high rate of housebuilding at a reasonable cost.