John McLellan: Raising the roof tax

A buyer scans the properties on display at the ESPC. Picture: Ian Georgeson
A buyer scans the properties on display at the ESPC. Picture: Ian Georgeson
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Here’s a question to stop any pub banter in its tracks: “Never mind the football, what about the Community Infrastructure Levy?”

Never heard of it? Not surprising really, seeing as it doesn’t exist, not in Scotland anyway.

But if you’re one of the thousands of people trying to get on, or move up, the housing ladder in Edinburgh and the Lothians, its absence could be the reason you could be stuck for a few years to come.

So what is the Community Infrastructure Levy? Since 2010 it is the means by which developers – apart from one-off self-builders – in England and Wales automatically stump up cash to pay for local improvements new buildings will demand. Call it the Roof Tax.

Applying to both commercial and residential developments, it means developers in any given area pay a flat fee to cover the cost of things such as road improvements or school extensions, even if a particular scheme does not make a significant impact in the immediate area.

So a housebuilder putting up half-a-dozen cottages along a country lane still has to pay the Roof Tax, even if no road improvements are needed and the local school has plenty of capacity.

It’s a way to spread the load to meet the cost of development where it might be needed most; affordable housing, for example, is exempt but resulting service improvements still need to be funded.

So in London it funds Crossrail, even though the majority of new London houses will not be near a new Crossrail station. It would have been a way for all developers to help fund the Edinburgh tram line, not just those building along the route.

But as the system doesn’t exist in Scotland, it is up to councils to ­negotiate a deal with developers on a case-by-case basis, under what are known as Section 75 agreements laid out in the 1997 Town and Country Planning Act.

In the case of the Caltongate development, or New Waverley as it is now known, the developer, Artisan, agreed to fund new affordable business space to compensate for the loss of the Canongate Venture, as part of a £1.6 million Section 75 deal.

No major plan can go ahead without an agreement to pay for the impact or compensate for loss, but now the process has ground to a halt because of a problem in what is becoming the political quagmire of West Edinburgh.

Taylor Wimpey has hoped to build 250 new houses, 60 of them affordable, in West Craigs just behind the Maybury Casino on a site earmarked for housing on the local development plan proposed in 2013. The plan included an agreement to widen the road and create a new woodland area.

Now, because the exact amount Taylor Wimpey would contribute for improvements has not been agreed and the new infrastructure is not in place, the plan has been kicked out. So 250 badly needed houses will not be built because of a row which simply wouldn’t exist in England and Wales because the builder would already know how much it would owe; the Roof Tax would have been predetermined and the cost taken into account.

Next up was expected to be a plan for 60 houses at Gilmerton Dykes, but this scheme, which should have been approved by the council last year, now faces an even longer delay and perhaps rejection by the planning committee on similar grounds to the Taylor Wimpey proposals.

And this, I understand, is despite Miller Homes being prepared to cough up a substantial, six-figure sum to pay for long-overdue improvements to the Gilmerton crossroads.

So housebuilders are having to rethink their plans for the whole of the region, and at a time when new houses are badly needed to keep prices in check. What little supply there is could be about to dry up.

Evidence of demand for reasonably priced family homes in Edinburgh is everywhere; in areas such as Greenbank, two or three-bedroom bungalows around the £300,000 mark, hardly cheap compared to elsewhere, are being snapped up within a week.

Queues are once again becoming a feature of Sunday open viewing and although it’s not quite the Hunger Games chase students are experiencing, fixed prices in more popular areas are disappearing.

Negotiations between planning officers and developers about ­Section 75 contributions can take many months before councillors get sight of any details and as with the West Craigs plan, there is no guarantee the politicians will accept the deal on offer.

If a Roof Tax system was introduced, the total cost of extra investment across the whole city could be estimated and divided up between developers and avoid being lumped on to general taxation.

But councils cannot decide to introduce such a scheme unilaterally and it would need Scottish Government approval, if not new legislation.

Some firms might not be happy, but at least they would all know what they were working with and would price accordingly.

And, crucially, they could get on with the job much quicker.

ARGYLE SWEATER

An update to last week’s item on the much-loathed Argyle House. I’ve been asked to point out there are no current moves to have the building listed, although there is well-documented appreciation for its charms from Euan Leitch, formerly of the Cockburn Association and now of the Built Environment Forum Scotland.