The land of Scotland and the common good: report

Part Five Land Development and Housing

Introduction

1 The Scottish Government seeks to promote sustainable economic growth, in part through the regeneration of our towns and cities, greater community development and community empowerment. Achieving economic prosperity is likely to depend significantly on the extent to which land and buildings, including those left vacant by economic change, can be taken and transformed into sites of future opportunity. As such, any land reform measures should provide an effective means to successfully address the barriers which militate against the delivery of sustainable economic, social and environmental development in Scotland.

2 To a large extent, land reform has been popularly conceived as falling within the context of rural development. Yet the largest group of landowners in Scotland are those who own the 1.5 million owner-occupied houses (a figure which accounts for 60% of all Scottish houses). While less headline grabbing, in terms of land reform, this aspect of the pattern of land ownership has huge social and economic implications for society. Land reform has, arguably, even greater significance for those people who are unable to access appropriate housing, or are inadequately housed. International human rights legislation obliges all governments to " take steps to ensure and sustain the progressive realisation of the right to adequate housing, making use of the maximum of its available resources". ^[1] Land reform can therefore play a potentially crucial role in enabling the Scottish Government to meet its legal human rights obligations.

3 This part of the Report highlights areas which urgently need to be addressed within this context, but particularly the need to facilitate and support more and better urban renewal, and the need to provide sufficient housing to meet the needs of a changing Scottish population. Land - and more precisely the interaction between how land becomes available, the price of land and the planning process - is central to both of these issues, and urban renewal and delivering housing are, therefore, essential components of the current land reform agenda. At the heart of both these issues, lies the question of who captures the benefit from rising land values, and how this is used.

4 The first part of Part 5 considers the need for land reform within the context of urban renewal and regeneration. It recognises the importance of our towns and cities as a key driver of an economically prosperous Scotland. Land is an essential raw material for the urban development process, and one which is often in short supply or beyond the reach of many potential end users. Land reform measures should therefore encourage and enable the transfer of land (especially unused, underused and neglected land) to those who can best make use of it in the public interest, irrespective of whether they are in the public, private or community sectors.

5 The second part of Part 5 focusses on housing. The issue of housing is both complex and multi-faceted, but the land dimension is a crucial determinant in the number of new houses which can be built in Scotland over the coming years, the quality of the houses we build and the kind of places we develop. Further, land prices and house prices are very closely linked. As such, this report explores the land reform aspects of housing, both in terms of how Scotland meets its new-build housing targets and by exploring other relevant land reform issues around existing housing provision.

6 Central to both these issues is the way in which urban development processes and the new-build housing market have evolved throughout the post-war period. As the UK increasingly embraced the free market, the role of the state (in the form of planners and proactive development agencies and corporations) receded. This has resulted in a fundamental shift in power relations towards increasingly larger developers and land owners, and the development of business models which are increasingly reliant on the practices of land banking and land speculation.

7 In recent years we have also seen the housing market, to a large extent, becoming more closely entwined with the financial sector, to the extent that the fortunes of the wider economy are now inextricably linked to the fortunes of the housing market. Creating a better functioning land market will therefore deliver wider economic benefit. This part of the report explores whether current land development and new-build housing processes are likely to address Scotland's future urban renewal and housing needs, and how best to serve the public interest.