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Pooling resources for urban land development: A major Commonwealth initiative

Geoffrey Payne

Although urbanisation is common throughout the Commonwealth, it’s not every day that town planners or architects have the opportunity to plan a new city from scratch. However, the decision by the government of India in 2014 to split one of the larger states into two has done just that. The new southern state of Telangana inherited the historic capital city of Hyderabad, leaving Andhra Pradesh in need of a new capital and Chandrababu Naidu, the Chief Minister who had done so much to make a social and economic success of Hyderabad, naturally wanted to realise the opportunity to create an equally impressive capital for the future.

The master plan and capital complex for the new city represent a major collaboration between Commonwealth planners and architects. Planners from the government of Singapore were commissioned to prepare the master plan and following an international competition the British architect, Norman Foster was selected to prepare designs for the capital complex. The master plan includes ambitious plans for a green and smart city as one would expect from a Singapore proposal, though the area to be developed is arguably greater than needed for efficient public transport and a more compact plan would encourage greater social interaction. The plan also had to be substantially revised to incorporate the Indian cultural concept of Vaashtu which, like the Chinese concept of Feng Shui, provides a foundation for planning and building layouts. This merger of hi-tech and tradition forms the basis for a polycentric urban structure with nine sub-centres which diversify economic activity and help to integrate existing villages into the new city.

The choice of Norman Foster was controversial as an international competition for the capital complex had been won by the Japanese architect Fumihiko Maki. However, the new design will no doubt be of the high standard expected of the British architect, though having had British designers responsible for New Delhi and the Swiss-French architect Le Corbusier designing Chandigarh, maybe it is time that India had the confidence to select one its own talented designers. Although the great Charles Correa, the planner of Navi Mumbai, has sadly passed on, he demonstrated that India has a wealth of talent, such as his son-in-law Rahul Mehrotra, on which to draw and who would not need the cultural advice of local film makers who are advising the Foster team.

India can claim a major innovation however that makes Amaravati internationally impressive. The new city required the accumulation of 35,000 acres (1,465 hectares) of fertile agricultural land on the banks of the Krishna River adjacent to the provincial city of Vijayawada. Obtaining this through conventional land acquisition methods would have proved prohibitive. The Capital Region Development Authority (CRDA) therefore decided to launch what is probably the largest ever example of land pooling, an innovative self-financing approach to urban development. This involves landowners pooling their individual land parcels so that the CRDA can develop the area as a coherent urban centre, selling some plots to recover development costs and provide essential infrastructure and public open space and then returning the remaining land to the original landowners in proportion to their contribution, to sell or develop within the framework of the master plan as they wish.

The key to success is, of course, to convince landowners that the value of the reduced area of land will be significantly greater than before. To date, all but 2,000 acres (809 hectares) of the total area has been achieved, though some farmers have objected and refused to contribute, claiming that the compensation is not enough. Of course, until the new city is completed, it can never be confirmed what the outcome will be, though all the evidence to date, both internationally and locally, suggests they will do very well. The most vulnerable group is, as so often in such developments, the poor, particularly the landless agricultural labourers who have lost their incomes. State compensation is not sufficient to offset the loss, though the CRDA is proposing alternative employment schemes to provide more financially attractive and suitable employment options for un- and semi-skilled labourers in building the new city. If these are confirmed and implemented effectively, and enough land is designated for public rental or community ownership for the poor in the future, it will enable the landless, as well as the landowners, to benefit from the project to which they are contributing.

Providing central government support is forthcoming, Amaravati could provide Commonwealth countries with an exemplar of how to plan cities that are smart, inclusive, sustainable and even self-financing. With Commonwealth Heads of Government meeting in London, there could be no better time to consider such examples.

(April, 2018)

Amaravati: Innovation in city-making in the Commonwealth

Geoffrey Payne

The Commonwealth Summit in London last week provided just the right moment to celebrate what could well be a success in master planning. Geoffrey Payne looks at joint Commonwealth efforts in the making of Amaravati, a new city in South East India.

Although urbanisation is common throughout the Commonwealth, it’s not every day that town planners or architects have the opportunity to plan a new city from scratch. However, the decision by the government of India in 2014 to split one of the larger states into two has done just that.

The new southern state of Telangana inherited the historic capital city of Hyderabad, leaving Andhra Pradesh in need of a new capital. Chandrababu Naidu, the Chief Minister who had done so much to make a social and economic success of Hyderabad, naturally wanted to realise the opportunity to create an equally impressive capital for the future.

The master plan and capital complex for the new city of Amaravati represent a major collaboration between Commonwealth planners and architects. Planners from the government of Singapore were commissioned to prepare the master plan and, following an international competition, the British architect Norman Foster was selected to prepare designs for the capital complex.

The master plan includes ambitious plans for a green and smart city as one would expect from a Singapore proposal, though the area to be developed is arguably greater than needed for efficient public transport and a more compact plan would encourage greater social interaction.

The plan also had to be substantially revised to incorporate the Indian cultural concept of Vaashtu which, like the Chinese concept of Feng Shui, provides a foundation for planning and building layouts. This merger of hi-tech and tradition forms the basis for a polycentric urban structure with nine sub-centres which diversify economic activity help to integrate existing villages into the new city.

The choice of Norman Foster was controversial as the international competition for the capital complex had been won by the Japanese architect Fumihiko Maki. However, the new design will no doubt be of the high standard expected of the British architect, though having had British designers responsible for New Delhi and the Swiss-French architect Le Corbusier designing Chandigarh, maybe it is time that India had the confidence to select one its own talented designers.

Although the great Charles Correa, the planner of Navi Mumbai, has sadly passed on, he demonstrated that India has a wealth of talent, such as his son-in-law Rahul Mehrotra, on which to draw and who would not need the cultural advice of local film makers who are advising the Foster team.

India can claim a major innovation however that makes Amaravati internationally impressive. The new city required the accumulation of 35,000 acres (1,465 hectares) of fertile agricultural land on the banks of the Krishna River adjacent to the provincial city of Vijayawada. Obtaining this through conventional land acquisition methods would have proved prohibitive. The Capital Region Development Authority (CRDA) therefore decided to launch what is probably the largest ever example of land pooling, an innovative self-financing approach to urban development.

This involves landowners pooling their individual land parcels so that the CRDA can develop the area as a coherent urban centre. It sells some plots to recover development costs and provide essential infrastructure and public open space while returning the remaining land to the original landowners in proportion to their contribution, to sell or develop within the framework of the master plan as they wish.

The key to success is, of course, to convince landowners that the value of the reduced area of land will be significantly greater than before. To date, all but 2,000 acres (809 hectares) of the total area has been achieved, though some farmers have objected and refused to contribute, claiming that the compensation is not enough.

Of course, until the new city is completed, it can never be confirmed what the outcome will be, though all the evidence to date, both internationally and locally, suggests they will do very well. The most vulnerable group is, as so often in such developments, the poor, particularly the landless agricultural labourers who have lost their incomes. State compensation is not sufficient to offset the loss, though the CRDA is proposing alternative employment schemes to provide more financially attractive and suitable employment options for un- and semi-skilled labourers in building the new city. If these are confirmed and implemented effectively, and enough land is designated for public rental or community ownership for the poor in the future, it will enable the landless, as well as the landowners, to benefit from the project to which they are contributing.

Providing central government support is forthcoming, Amaravati could provide Commonwealth countries with an exemplar of how to plan cities that are smart, inclusive, sustainable and even self-financing.

(April 2018)

Sharing the spoils of land development

Geofrey Payne

As the controversy over the application of the Community Infrastructure Levy (CIL) in the London borough of Tower Hamlets demonstrates, efforts to generate a public benefit from state action can prove difficult.

At the heart of this issue is the increasing value of land in urban and peri-urban areas due to ever-increasing demand for a finite resource. With the UK fully committed to a market economy, and much of the world pursuing a similar path, the issue of how to share the increment in land values resulting directly or indirectly from state action is central to the need to reduce inequality and ensure that adequate housing is available to all in need.

The issue is hardly new. John Stuart Mill argued in 1871 that “the incomes of landowners are rising while they are sleeping, through the general prosperity produced by the labour and outlay of other people”[1]. The issue was picked up later by Henry George who argued that “the great cause of inequality in the distribution of wealth is inequality in the ownership of land”[2] and by Churchill who argued that ““It is quite true that land monopoly is not the only monopoly which exists, but it is by far the greatest of monopolies – it is a perpetual monopoly, and it is the mother of all other forms of monopoly”[3]. Land ownership and management is therefore central to addressing social inequality and improving access to affordable housing.

Fortunately, a wide range of policy instruments to ensure that the benefits of development are equitably shared are already in the public domain and have been applied in a wide range of social, economic and political contexts. Some of these exist already in the UK, of which the CIL is one. Not only can these instruments avoid any burden on scarce resources, they can actually result in developments that are both self-financing and able to meet a broad range of needs. They include fee-based, development-based and tax-based instruments, though the former two are most effective in improving the provision of affordable housing[4].

Fee-based instruments include betterment levies or charges and the sale of development rights. They were initially applied in England by King Henry VI in 1497 to capture increases in private land values arising from flood defence works and have been successfully applied recently in the USA and Colombia.  Development rights refer to the maximum amount of floor area or type of the built area that can be constructed on a land parcel. These rights can be sold or transferred to other locations and have been widely applied in parts of India.

Development-based policy instruments include 1) developer charges and impact fees, (in cash, land or in-kind forms) in return for the right to build; 2) land sales or leases, in which payments are made in exchange for land or its development rights; 3) Land pooling or readjustment, in which landowners pool their land and after subdivision and servicing, some plots are sold to recover costs, others may be allocated for housing or other public benefits and the remaining plots are returned to contributing landowners at a higher value than before the project was undertaken; 4) Transfer Development Rights, a zoning technique to protect land with conservation value or to increase the density of development at another designated location; 5) Mandated allocations of affordable housing in commercial developments; 6) Requests for Proposals, in which suitably qualified developers are invited to submit proposals for a specific site that meet mandatory requirements and; 7) rural land acquisition at existing use value by state-based development corporations for urban development.

Of these, the last has been widely applied in the UK to finance and plan new towns such as Milton Keynes and would be perfectly applicable for funding the proposed Oxford-Cambridge Arc development from the increment in land values. With both universities owning large stretches of land in the affected area, this would be a good opportunity for them to show their commitment to social progress by agreeing to this approach. Equally, mandated allocations have been very effectively applied by the GLA in the past and yielded a 50 percent allocation of genuinely affordable housing in a privately developed project on the north bank of the River Thames. When other developers protested that such allocations threatened the viability of their projects, many agreed to an independent confidential review of their business plans to establish the viable level of affordable housing. Since then, developers have been able to apply hope value and Financial Viability Assessments to local authorities weakened by a decade of austerity to avoid their public responsibilities. 

It is now time to apply some of these policy instruments to the development of new projects and ensure that the spoils of development are equally shared. This will require the re-establishment of adequately resourced and democratically accountable local planning authorities and is not a threat to the efficiency of markets, but a means of making them more socially responsive and sustainable.


[1] Land Tenure Reform Association, Report of the Inaugural Public Meeting … (1871): 9-10, as cited in Avner, Offer, Prosperity and Politics, 1870-1914 (Cambridge: Cambridge University Press, 1981), 183 and Lindert, P.H. (1987) op.cit. page 27.

[2] George, H. (1881) ‘Progress and Poverty: An inquiry into the cause of industrial depression and of increase of want with increase of wealth – The remedy’ New York: D. Appleton and Company, cited in Lindert, op.cit., page 29.

[3] Available at: https://www.cooperative-individualism.org/churchill-winston_mother-of-all-monopolies-1909.htm (Accessed 23February 2020).

[4]  A review of land-based finance instruments for improving affordable housing has been prepared for UN-Habitat by the author and Daniela Muňoz-Levy and is currently being peer reviewed.

Are the government’s climate crisis proposals just a lot of hot air?

Of all the statistics that bring the climate crisis into frightening focus, the one that sticks in the mind was given by David Wallace-Ellis in launching his book, the Uninhabitable Earth. He claims that since the Inter-Governmental Committee on Climate Change was established in 1992, humanity has emitted more pollution than in all the millennia before. In other words, even since we knew it was a problem, the situation has become worse.

A combination of publications, movements like the Extinction Rebellion, actions by young people such as Greta Thunberg, have triggered a media blitz to the point that there is a danger it will all pass by like a tsunami, allowing us to feel that individual action is irrelevant when other countries, multinational corporations and the affluent elite show little sign of changing.

So what actions are being proposed in the UK and what is the role of the professions? According to the joint TCPA/RTPI report ‘Planning for Climate Change A Guide for Local Authorities’ the government has committed to: reduce emissions by at least 80% of 1990 levels by 2050; and contribute to global emissions reductions, to limit global temperature rise to as little as possible above 2°C.[1] To meet future carbon budgets, the 80% target reduction by 2050 was officially revised to 100% from 1990 emission levels.[2]

According to Carbon Brief, UK CO2 emissions were around 600m tonnes in 1990 and 38-44% lower than this 2017, largely due to the switch from coal to gas and renewables[3]. Currently, residential and business uses each account for 18% of all carbon emissions and transport for 33%[4]. Yet, the government’s Productivity Plan subsequently announced that: ‘The government does not intend to proceed with the zero carbon Allowable Solutions carbon offsetting scheme, or the proposed 2016 increase in on-site energy efficiency standards, but will keep energy efficiency standards under review, recognising that existing measures to increase energy efficiency of new buildings should be allowed time to become established.’

While the 2017 Neighbourhood Planning Act strengthens the powers of neighbourhood plans, it also creates a new legal duty on local planning authorities to set out their strategic priorities. The government has now indicated that these priorities should be expressed in a strategic plan. This plan is focused on high-level strategic issues set out in the NPPF, and these include action on climate change”. So, national government has set an ambitious goal. However, as so often, responsibility for scoring the goal has been deftly passed to local authorities that have been subject to massive cuts during the last decade and are in no position to move, let alone score goals.

While the London plan states that major residential developments from 2016 should be net zero-carbon, no definition of a major development is provided, so developers will easily be able to claim that projects are exempt. To what extent will local authorities be able to require that the 500 tall buildings planned for London will all be carbon neutral? To say that “Local planning authorities should engage constructively with developers to deliver well-designed sustainable buildings and high-quality local environments suitable for low-carbon living” sounds reassuring. However, given the efficiency with which developers routinely exploit Financial Viability Assessments to avoid including a reasonable proportion of genuinely affordable housing in new developments, prospects do not look good.

While the government claims to be a world leader on addressing climate change, the Committee on Climate Change reports that ”UK action to curb greenhouse gas emissions is lagging far behind what is needed, even to meet previous, less stringent, emissions targets. Over the past year, the Government has delivered just 1 of 25 critical policies needed to get emissions reductions back on track”.[5]

Of course, statistics can be manipulated until they confess to anything, but for the TCPA/RTPI report to state that local planning authorities “are encouraged to support innovation which secures well-designed sustainable developments” suggests more hot air rather than strong government.

Geoffrey Payne

www.gpa.org.uk

(14 October 2019)


[1] The second commitment to reducing global emissions was not in the 2008 Act, but is included in the Department for Environment, Food and Rural Affairs 2018 National Adaptation Programme.

[2] The Climate Change Act 2008 (2050 Target Amendment) Order 2019. See: https://www.legislation.gov.uk/ukdsi/2019/9780111187654

[3] https://www.carbonbrief.org/analysis-why-the-uks-co2-emissions-have-fallen-38-since-1990. The Committee on Climate Change figure is 44%: https://www.theccc.org.uk/tackling-climate-change/reducing-carbon-emissions/how-the-uk-is-progressing/

[4] See: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/790626/2018-provisional-emissions-statistics-report.pdf

[5] https://www.theccc.org.uk/2019/07/10/uk-credibility-on-climate-change-rests-on-government-action-over-next-18-months/