Cambridgeshire and Peterborough Land Value Capture
In their representations to the Inquiry, the Cambridgeshire and Peterborough Combined Authority have proposed, in simple terms, an ‘agricultural land value cap’ as a form of Land Value Capture (LVC).
Based around the designation of Zones around each proposed infrastructure project in the region, the proposed LVC mechanism is described as operating as follows:
- Zones will be in place for 40-50 years and projects within can be updated;
- Land within a Zone but outside the ‘planning envelope’ could not be sold for more than 10x the agricultural value (ignoring any uplift from infrastructure projects);
- On sale of land a debt per unit would be payable to the Combined Authority; and
- The debt would be paid through a statutory charge once houses are sold.
To view DHCLG's Inquiry please click here
To view Cambridgeshire and Peterborough's proposal please click here
The Authority’s proposal references the extension of the M11 to join up to the A47, the widening of the A10 and a Cambridge Autonomous Metro System as examples of the types of transformative projects that could be funded through such a LVC mechanism.
Mike Derbyshire, Partner, Head of Planning says
“It is encouraging to see that the Authority and the Mayor are looking at new ways to fund the infrastructure in the region needed to support the planned economic growth as well as the new homes required.
All parties accept this infrastructure is key to support sustainable growth. But experience from other major projects such as Crossrail 2 shows that a diverse range of measures are needed to properly fund major infrastructure projects, LVC is only one part.
The challenge is to ensure that the direct taxation of the supply of land doesn’t choke off the supply. That is particularly germane to the Cambridge market where a significant proportion of land is held by long-term land owners who are prepared to take inter- generational views on the release of this irreplaceable asset”