Compulsory Sale Orders: A Land Reform Proposal Professor David Adams Urban Studies, University of Glasgow Scottish Empty Homes Conference Glasgow 27 November 2014
What are the land challenges facing urban Scotland today? Extensive areas of vacant & derelict land blighting urban communities Land prices kept artificially high by valuation methods and lack of holding costs Some owners unduly obstructive of new projects Urban redevelopment projects can take a long time & often abandoned Age of austerity means no longer possible to look to governments for solutions
A typical view in Glasgow (and in many other places as well!)
Vacant and derelict land in Scotland 1996-2013 14000 12000 10000 Hectares 8000 6000 4000 2000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total vacant land Total derelict land
Scottish local authorities with most vacant & derelict land 2013
Percentage of population living within 500 metres of a derelict site by deprivation
Hardcore vacancy sites remain unaffected by development booms
Only 54% of 1995 survey sites fully developed by 2011 16 14 12 No of sites 10 8 6 4 2 0 Aberdeen Dundee Nottingham Stoke Fully Developed Partially Developed Undeveloped
Nottingham Eastside: 25 years of broken dreams 1990 proposal 2004 proposal 2011 proposal TODAY!!
What is 8.5 hectares of derelict land worth in Stoke-on-Trent? On market for 860,000 in 1997 Owner think OMV is 600,000 But would accept 500,000 But bank valuation only 260,000 To cover original 260,000 purchase Plus 60,000 other expenditure Plus 260,000 interest paid out Is it even worth 260,000?
A question of rights & responsibilities How long should an owner of land be allowed to hold out for the best price? Especially if someone else could put the land to beneficial use?
Valuation methods impede reuse of vacant & derelict land THE PROBLEM Comparable valuation depends on good evidence of past transactions Relatively few transactions take place in vacant & derelict land and it is often hard to generalise from these Reluctance to write-down perceived values from past, even in face of structural decline or cyclical downturn Compulsory purchase reflects & reinforces this cautious & conservative approach to valuation THE SOLUTION
Compulsory Sale Orders as proposed by the LRRG (2014) Keeping urban land and property vacant when someone else could put it to beneficial use impedes the chances of achieving sustainable and resilient settlements The Group considers that one new measure worthy of consideration is a Compulsory Sale Order (CSO) This would involve requiring land that has been vacant for some time to be sold by public auction
How might Compulsory Sale Orders work in practice? 1. Enhanced statutory register of vacant & derelict land, with clear definitions & rights of appeal for, and against, inclusion 2. Once land on register for longer than defined period (e.g. 3 yrs), local authority (& other public agencies or local communities?) could require sale by auction 3. Auction notice to be accompanied by planning statement clarifying what types of development would and would not be allowed 4. Conduct of auction & conditions of sale regulated to ensure due process & avoid speculative purchases 5. If land unsold, minimum period (e.g. 3 yrs) before another CSO could be served
But why not rely instead on compulsory purchase? Compulsory purchase is: Highly complex, both administratively & legally Financially uncertain & often very costly to the authority Regarded by most politicians as a last resort Dependent on professional valuation & so reinforces land price rigidity
The broader impact of CSOs CSOs would provide a marketsolution to urban land vacancy at relatively little cost to local authorities or other public agencies Even if used infrequently, CSOs would help markets work better on day-to-day basis by encouraging more rapid price adjustment in regeneration areas More realistic land pricing would help regeneration activity as a whole, whether undertaken by public, private or voluntary sectors
Is this proposal too radical, uncomfortable & unrealistic? On the one hand, possible Government reaction to CSOs might be On the other hand, how long can we put up with this lack of progress? 14000 This is not how we do things in Scotland (or the UK) Hectares 12000 10000 8000 6000 In other words, we re familiar & comfortable with the way it s always been done a kind of institutional inertia 4000 2000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total vacant land Total derelict land
Should CSO s apply to empty property as well as vacant land? Development proposal for 90 up-market apartments, Helensburgh, 2007
The site today: 40 vacant flats
Question for discussion The Scottish Empty Homes Partnership has proposed a new Housing Re-Use Power. This was supported in principle in the LRRG report. Would CSOs add anything to the HRP as far as empty property is concerned, or should they be confined only to land?