Land value capture is a hot topic at the moment with politicians and policy makers increasingly looking to alternative mechanisms of land value capture as a solution to the shortage of affordable housing and the difficulty in funding infrastructure for new developments.

Whilst much of the debate has been south of the border, the views are increasingly gaining support in Scotland. The Scottish Land Commission report published last week on historic attempts to capture land value uplift in the UK points the way to using publically created land value increases to deliver new housing and development.

At present in Scotland, planning obligations including s.75 contributions and affordable housing provision are the main mechanism for securing the uplift in the value of land arising from planning permission. The effectiveness of planning obligations as a land value capture mechanism will potentially be increased as a result of provision for a new infrastructure levy for identified infrastructure projects in the Planning (Scotland) Bill.

It is in this context that proposals have emerged to promote compulsory purchase orders (CPOs) against developers and land promoters to acquire land where planning consent has been granted but not used, generally referred to as a 'use it or lose it' threat.

Elsewhere, proposals include the acquisition of land at existing use value, ignoring hope value and potentially even ignoring the value attributable to any existing planning consents.

Whilst such proposals may appeal to politicians, interest and lobby groups:

  • Does this represent sound planning policy?
  • Does it fit within, or undermine, the current CPO code?
  • Will the proposals really capture land value?
  • Will such policies expedite housing delivery?
  • Where do such proposals fit in the context of Article 1 of Protocol 1 of the European Convention on Human Rights?

The Compulsory Purchase Association of Scotland is hosting a law reform debate in Edinburgh on 11 June which will focus on emerging land value capture schemes using compulsory purchase at restricted value.

UPDATE: Click here to read about the outcome of the debate.