Private developers wanting to build in special zones will be asked to fork out hundreds of thousands of pounds before even laying a brick in what is believed to be a first for a Scottish city.
The new scheme planned for Edinburgh would require companies to pay a flat charge of as much as £300,000 per hectare for the right to build in boom areas identified as ripe for housing.
It would replace the existing “planning gain” system where a developer would directly pay for a school, health centre or road as a trade-off for getting planning permission.
Some builders had viewed the old process as inconsistent and ad hoc, but critics today warned the alternative plans could be worse and end up stifling badly-needed housing growth.
Flat fees will be introduced by the city council for zones in both the city’s west and south-eastern suburbs.
The authority said charging those firms wanting to build close to planned school expansions and junction upgrades extra was a “fairer system” than demanding city-wide contributions.
But companies such as Murray Estates, which wants to construct a £1 billion Garden District residential centre in Edinburgh’s west, issued a blunt reminder that “excessive contributions” would only succeed in suppressing much-needed development.
The reminder comes with Edinburgh scrambling to find land for almost 8000 extra homes that must be built in the next ten years under strict Scottish Government targets.
Murray Estates managing director Jestyn Davies said of the council’s latest plans: “We have always made clear our willingness to pay reasonable developer contributions on any proposals we take forward. As council officers have accepted, ours are the only housing proposals that have any significant community benefit included, with a major new visitor attraction, enhanced public transport links, schools and sports facilities. Care must be taken to get the balance right, and excessive contributions will simply suppress development at a time when new family homes are needed most.”
Pressure is mounting on the Capital to deliver around 30,000 new properties by 2024.
City planning convener Councillor Ian Perry conceded last week it was likely that green-belt land would need to be carved up to achieve the shortfall in homes.
Under the latest council plans, Gilmerton, Liberton and Gracemount would form part of a new education zone in Edinburgh’s south-east where developers will face charges of £300,000 for every hectare they wish to build on.
A separate zone to the west of the city will cover areas including Corstorphine, South Gyle, Sighthill, Maybury and Cammo.
Companies within this zone wanting to build housing or commercial projects would be charged £205,544 for every hectare.
The council said it had reached the figures based on the maximum number of pupils expected to be added to each area as a result of the proposed housing developments.
Projects expected to get the go-ahead in the next decade include an extension to Forrester High School, that would increase its capacity from 900 to 1300 pupils, and adding new classrooms to Maybury, Gylemuir and Broomhills primary schools.
Liberton and Gracemount high schools would also need to expand to cater for an influx of students.
A total of almost £34 million is expected to be needed to pay for the expansion of schools.
Two transport zones where major infrastructure upgrades are needed have also been identified in west and south-east Edinburgh.
Developers would pay for improvements at the Maybury and Craigs Road intersections along with increasing the capacity at Barnton junction.
Burdiehouse junction and the Gilmerton crossroads would also be redesigned to ease traffic congestion. Between £444 and £1100 would have to be paid by the developer for each residential flat in these zones to help cover the cost of the upgrades.
The council has estimated it will take £3.5m to improve all five junctions.
The new process for developer contributions, which is more targeted than the previous ad hoc system, is expected to be approved at Thursday’s planning committee meeting.
The proposal will be subject to a eight-week consultation period starting from October 14. Cllr Perry said he expected developers would take the cost of contributions into account when bargaining to buy land. Land owners would bear the cost by having to discount the up-front cost of property.
“Developers are used to paying contributions,” Cllr Perry said. “This is about getting a fairer system in place.
“We would expect the contributions will come off the cost of the land. It’s the best way for us to make sure those who are building homes are helping pay for the nearby school and transport improvements that are required.”
City-wide rules have previously seen developers paying anywhere from £51 to £411 per flat in areas where the project required an extension to a primary or secondary school.
Contributions for any development that subsequently created the need for better transport in the form of bridges, roads, traffic signals or cycle lanes would be negotiated on a case-by-case basis.
The changes will potentially leave Edinburgh City Council at odds with Murray Estates.
The Scottish-based property investment group has drawn up a masterplan showing how green-belt land belonging to former Rangers owner Sir David Murray would be transformed into a £1bn hub that would include 3500 family homes, a university and business villages.
Persimmon Homes Scotland regional chairman John Cassie is also concerned.
He said: “While we accept that we have a social responsibility to fund infrastructure improvements in direct and proportionate relation to our developments, we are concerned that the proposed contributions by their cumulative value will have negative impact on the viability of future sites.
“The implementation of the policy, and the way that payments are levied has the potential to stifle the construction of new homes if payments are not spread properly throughout the lifetime of the development.
“This would further deepen the housing crisis that the city already faces.”
Key figures from six local authorities agreed at yesterday’s Strategic Planning Authority for Edinburgh and South East Scotland meeting on how they would divide the extra housing asked for by the government.
The city council has agreed to come up with almost a third of the 107,500 new-builds needed in the country’s south-east by 2024.
Up to 2000 of those homes would be built by reclassifying greenbelt land at Maybury and Cammo in the city’s west.
Edinburgh Western MSP Colin Keir, who opposes green-belt development, said the council had grossly underestimated how much it needs to spend on improving transport links near the airport.
He said: “They’re messing around with it – £2.5m to tinker around with junctions. That is not the answer. The answer is a proper strategic plan that must be brought forward before any of that housing goes ahead. I guarantee you the traffic movement will be horrendous in the west side of the city.”
South East Edinburgh Education Contribution Zone
Fifty hectares of developable land is available across areas including Broomhills, Burdiehouse, The Drum and Moredunvale at a cost of £300,000 per hectare.
West Edinburgh Education Contribution Zone
Development land at Maybury, Cammo, Edinburgh Park and the International Business Gateway comes to 92 hectares. Developers will be charged more than £205,000 per ha.
South East Strategic Transport Contribution Zone
Burdiehouse junction needs to be reconfigured and congestion eased at Gilmerton crossroads. A fee of £444 and £952 per flat or house will be levied against developers for the two locations respectively.
West Strategic Transport Contribution Zone
Improvements are needed at the Maybury and Craigs Road intersections. The capacity at Barnton junction also has to be increased for future growth. A contribution fee of £1100 per flat or house will be charged for development in this zone.
‘Think before it’s gridlock’
CRITICS believe Edinburgh City Council needs to get its priorities straight and sort out the city’s snarling gridlock problems – before crystallising its cash-grabbing planning gain scheme.
Edinburgh Pentlands MSP Gordon MacDonald said the 1824 homes proposed for green-belt land in Balerno, Currie and Juniper Green will leave arteries such as Lanark Road clogged with traffic. He said: “We’re really concerned about the whole of the west side of the city hitting gridlock. The four main arteries that we’ve got, there is no room for them to be expanded because they’re obviously in built-up areas themselves. It’s not like you can make a two-lane road suddenly into a four-lane road. The capacity issue has to be addressed before we allow further building to go ahead.”
Green Lothians MSP Alison Johnstone also questioned the timing of attaching price tags to developments on “precious” green-belt land. She said: “A land value tax would steer developments in the right way. We need to meet the demand for housing and we need to support the sort of communities where school, work and leisure are close at hand, rather than pinning hopes on developer contributions from urban sprawl.”
HAPPY TO PAY - IN PRINCIPLE
ONE of the Scottish building industry’s key leaders says he has no problem with the city’s new developer contribution system, so long as it does not become a permanent tax.
Blair Melville, director for planning strategy at Homes for Scotland, said: “The principle of developers paying to deal with the impacts their development causes is well established. It’s a principle of planning policy and practice. The issue is always to make sure that what’s being sought is absolutely necessary and in financial terms it’s reasonable and affordable.
“There are plenty of precedents for developers making contributions towards schools or roads or drainage, but there’s only so much money in everybody’s pockets. Development only produces so much in return to developers and, therefore, you have to be very careful about what you’re asking for.”
Mr Melville said school extensions and junction upgrades should always be funded through a partnership between developers, local authorities and the Scottish Government. He warned it was dangerous when a single figure was put on all contributions, regardless of the location.
“The danger of the council or anyone trying to put a single figure on everything is that just becomes a tax,” he said.
“Their plan is clearly intended to equalise costs across a zone or an area on the basis that there will be many individual developments that collectively create the need for a school or whatever it happens to be, and therefore the principle of fairness and equity is not unreasonable to try to equalise that across developments. In principle it’s fair enough.
“However, in reality I think it’s a bit more complicated than that because each individual development within that will have its own unique costs and attributes, which may affect its ability to pay that.
“Likewise, it’s not unreasonable to expect government to pick up some of its statutory responsibilities and contribute as well.”