The government has announced that it will meet its manifesto commitment to build 1 million homes before the next election. The government’s long term housing plan focuses on increasing the density of inner-city areas, and incentivising the regeneration of brownfield sites.
Areas identified for regeneration, such as Cambridge, central London, central Leeds, and the creation of a “Docklands 2.0” along the Thames, are typically in fragmented landownerships. Whilst funding was outlined, as well as the deployment of a new “super-squad” team of leading planners in Cambridge and the Investment Zones, there was less detail on how land will be assembled for regeneration.
Compulsory acquisition is a useful tool to assemble land in multiple ownerships, although it is a complex process. Ashfords’ Planning Team advises acquiring authorities, developers backing schemes, and those with affected land interests on Compulsory Purchase Orders (CPOs), including various road schemes, and housing regeneration proposals. In our experience, it can take a substantial time from land referencing to the vesting of land, and then settling compensation claims.
The Levelling-Up and Regeneration Bill proposes amendments to the compulsory purchase to “help streamline and modernise the process” for CPOs including:
The government has also consulted on amendments to compensation and “hope value”. Hope value is the value attributed to an actual or prospective planning permission for an appropriate alternative development on the land that is being compulsorily purchased. As it currently stands, where existing planning permissions and legal assumptions are not sufficient to establish hope value for compensation purposes, the landowner may apply to the local planning authority for a Certificate of Appropriate Alternative Development (CAAD).
As part of the Levelling-Up and Regeneration Bill, the government is proposing there is a single route for determining hope value, and that a CAAD must be obtained at the landowner’s expense. A local planning authority will only need to consider the appropriate alternative development identified in a CAAD application. The proposed reforms would enable an acquiring authority to request a direction from the Secretary of State that hope value is capped at the existing land value, or at an amount above existing value where it is in the public interest. The requirement for a CAAD and capping of hope value may provide more certainty about the compensation payable, costs and viability, and encourage more local authorities to use CPOs. Local planning authorities, however, are already under resourced and the requirement for a CAAD could result in more appeals to the Upper Tribunal. Directions by the Secretary of State capping hope value may also be open to judicial review by landowners which could delay the CPO process.
The amendments proposed in the Levelling-Up and Regeneration Bill may provide more flexibility for acquiring authorities making and implementing CPOs, and more certainty in respect of compensation costs for hope value. The proposals, however, are not a wholesale reform of the compulsory purchase regime to make it an efficient and streamlined process for rapidly regenerating inner city areas to deliver new housing. That wholesale reform is arguably long overdue.
Any local authority considering using a CPO to regenerate brownfield sites, or any party affected by a CPO will require specialist legal advice from an early stage.
For more information on using CPOs for regeneration purposes, or assistance with any queries, please do get in touch with the Planning team.