The Greybelt has “Golden Rules”, but where’s the gold?

Channel 4 's Helia Ebrahimi got straight to the point when interviewing me for her excellent piece for Channel 4 News…what is the #Greybelt? and will it work?

What is the Greybelt?

Policy will see Greybelt as distinct and separate from the definition of ‘previously developed land’ (aka brownfield land).? It has not defined it yet, but it seems likely it will pick up the exclusions within the definition of brownfield land.

These ‘exclusions’ include redundant agricultural buildings, quarries or areas of spoil, and where permanent structures or fixed surface structure have blended into the landscape.? Here we think of old hard-standing associated with car parks or the oft-cited redundant petrol station.? We should expect it might also include land that has been severed from the greenbelt by permanent infrastructure such as arterial roads.

One desired consequence of a definition that sits below brownfield land in a sequential test is that it will inevitably strengthen the definition of brownfield land. ?In this way, whilst Greybelt may be at risk of a woolly definition, it will allow the brownfield definition to be applied with certainty and objectivity.

It is also important to say that greenbelt release requires the pressure of mandatory housing tests.? The reintroduction of mandatory housing tests is seen as a top priority by housebuilders, as identified in Knight Frank 's Land Index by Anna Roxelana Ward .

Will it work?

It has huge potential – at Knight Frank we’ve been encouraging government to face up to the uncomfortable question of greenbelt release for some time.? We undertook a geospatial study to conclude the scale of the opportunity and identified 11,000 sites that might fit the definition.?

But (and I hate to say ‘but’) I fear that none of these 11,000 sites will be financially viable if Labour imposes its 'Golden Rules'.? The 50% minimum affordable housing threshold alone will ensure nothing will happen on any of these sites.? I know what many will say… “it’s OK, it will just come off the land value”…and that might be a convenient narrative for a politician or even a housebuilder thinking land will be cheaper, but that presupposes that the lower land value will even be positive, let alone viable.

Land development needs to be commercially viable.? It needs to offer promoter’s a return on their risk capital, whilst providing adequate security to raise finance for up-front infrastructure.

If the land is urban infill there will likely be alternative uses that have a higher value than residential development land (with 50% affordable housing).

If the land requires enabling infrastructure (as many Greybelt sites will) the associated costs will undermine viability.? This is where I see the real mismatch in expectations.

Expectations of a pot of gold have been informed by studies that ignore enabling infrastructure costs and have been taken at face value.? The VOA’s 'Land value estimates for policy appraisal' was used to inform the House of Commons debate on Land Value Capture.? On hearing that land granted planning permission for residential use, would, on average, increase in value by 93-fold, Councillor Tett from the Local Government Association said, “To find it is quite such a large uplift even surprised me, but that was a Government statistic, so it must be correct”.

But what everyone seems to have missed is that the VOA study assumed the residential land was fully serviced (ie. it assumed nil infrastructure costs), had nil affordable housing and nil Section 106 or CIL costs.? The costs of servicing land is not in my experience ￡3,700 per plot as assumed by the Centre for Progressive Policy in its Gathering the Windfall report, but in fact closer to ￡65,000 per plot on average.? This difference in opinion explains why the Government is expecting to find a pot of gold where there is none.