This post was the contents of RenewalCities.org
Renewal Cities are developments that use the wealth they create to sponsor grand and worthwhile projects.
Our first scheme – a city in North Kent.
The Hoo Peninsular Renewal City will be a modern carbon negative city where people from varying walks of life will want to live. Its predicted population is 250,000. This is much larger than any of the proposed ecotowns. As well developing carbon negative lifestyles, some of the wealth created by this development will finance carbon capture and storage at the neighbouring Kingsnorth power station. The city will be funded using the value inherent in planning permission.
The value of planning permission
Development creates value. In Britain, a large proportion of this value can be recognised as the value of planning permission. The values of land is greatly increased when planning permission changes agricultural land into building land. The difference is the value of the planning permission. A typical figure for the planning permission value of a house is £100,000.
3 million new homes – £300 billion to spend
The UK government is planning 3 million new homes. A reasonable estimate of the planning permission value of these homes is £300 billion. With the correct mechanisms in place this can be captured for good causes. One advantage of using planning permission value is that the source of the value is opaque – it needs a good understanding of the economics to see how the value is created.
One method that RenewalCities.Org advocate is the use of development trusts, bodies who use the wealth that development creates for beneficial purposes. Such mechanisms are already used. The Olympics Delivery Authority is using £1.8 billion of planning permission value for the 2012 Olympics. Universities and colleges often find funding in this way. This is discussed in more detail in our proposal for the Hoo Peninsular Renewal City.
Another aspect of Renewal Cities is that there will be working examples of how we might live happy lives without causing environmental degradation. They have a more ambitious targets than the current proposals to develop ecotowns in Britain. Ecotowns are not geared to promote radical changes of lifestyles.
OUR FIRST SCHEME …
A RENEWAL CITY ON THE HOO PENINSULA
A Renewal City is an urban development that from the time of its foundation, and throughout its life, creates wealth to sponsor projects that are beneficial to life on Earth.
This proposal is for a renewal city on the Hoo Peninsular. The city will be designed to create and respond to the lifestyle choices of a populace that will predominantly consist of people who are profoundly concerned about the implications of climate change. Its specific project will be to sponsor carbon capture at the proposed Kingsnorth power station.
The UK should lead efforts to combat climate change
When the UK was a major manufacturing nation it emitted a large proportion of the world’s total greenhouse gases. As its industrial role has diminished the proportion has reduced to the point where now we are responsible for merely a few percentage points of the total. Therefore a reduction in the UK’s emissions would not represent a significant diminution in the scale of the overall problem. However, by virtue of our place in the history of world industrialization and of our reputation, still largely intact, for innovative and adventurous technical thinking it is not unreasonable to expect this country to lead the way in persuading the world to reduce its emissions and to provide guideline solutions to that end. We envisage the UK as leading the next industrial revolution; a revolution that will deliver sustainable and comfortable lifestyles without the concomitant destruction of the human habitat that is now evident all around us.
This proposal is for a major carbon-negative settlement. It will incorporate the latest thinking in eco-sensitive urban design and will provide a platform for continuing research and development. Funding for the development will be generated by a finance-stream which is currently untapped, that is the realisation of the resource value inherent in the grant of planning permission.
The finance raised in this way together with ongoing revenues from the city’s income streams will be used to fund environmentally positive developments elsewhere. In the case of this project the major beneficiary will be a carbon capture scheme at Kingsnorth power station. Other beneficiaries will be the technologies that will help create a carbon-negative lifestyle in the city.
Using the value of planning permission to finance projects to combat climate change
The grant of planning permission is the key factor in adding value to land. This enhancement can multiply its value by a factor of hundreds. If “land” and “planning permission” were seen as separate components of “building land”, we would find that planning permission has a much greater value than the land itself.
For quite ordinary housing schemes, the value of planning permission is now typically between two and five hundred million pounds per square kilometre (i.e. two and five million pounds per hectare). Recently, these values may have diminished slightly following downward pressure in the financial markets. However, the long-term values of property (and thus planning permission) are unlikely to fall substantially. In this regard it is notable that current climate models indicate that the UK will not suffer the effects of climate change as badly as southern Europe. The EC as a whole is likely to see a northward migration of human populations. This is likely to enhance the value of property in the UK, which, in turn, will maintain the value of planning permission.
A key source of revenue for renewal cities is making better use of “planning permission value”. There are several related possibilities but they all have the common theme that is, that the initial governing authority of the renewal city has the right to grant planning permission. It should also have the power to commission the design and construction of the city to achieve its founding objectives. This power to grant planning permission and to direct the design of the city will enable the authority to create several streams of wealth. One stream will come from the physical assets such as buildings, infrastructure and land. These may be sold freehold or leasehold or rented. Covenants and contractual terms will be placed on the properties in order to ensure compliance with the objectives of the city. The authority will also have the power to levy other charges such as congestion charges or derive income from the grant of operating licences for public transport.
There are precedents for the powers of such a governing authority. The power to grant planning permission for developments has been given to Development Corporations- usually on area of land identified at the time that they are set up. Urban regeneration has often been a goal of development corporations but other objectives are possible. For example the Olympic Delivery Authority (ODA) was set up to manage public sector involvement in the 2012 Olympic Games to be held in London. It is to provide the venues and infrastructure. In conjunction with the London Development Agency (LDA), the ODA has powers of land acquisition, including compulsory purchase. The authority will also have the power to levy other charges such as congestion charges or derive income from the grant of operating licences for public transport.
The income from the sale of some assets such as the Olympic village and development land is part of the Olympic budget: land sales have been estimated as having a value of £1.8 billion.
In more ordinary cases, planning permission is used to finance “worthy” projects such as new college buildings. The York Colleges’ main buildings have recently been rebuilt, in part using the money raised from the sale of its former site for domestic housing. The added value here is, of course, the grant of planning permission that has enhanced the value of the land. The University of York is funding building of its new campus by using the value generated from the business parks that it constructs.
In cases such as these, the value of planning permission is tied to a worthy cause (regeneration, the Olympics, education & etc.). These situations are proxies for hypothecated taxes. ‘Hypothecated taxes’ is the usual term for earmarked taxes. A development levy that must be spent on education, for example, is clearly a hypothecated tax. The grant of planning permission for an educational purpose has the same net effect so should be regarded as hypothecation.
Historically, hypothecation is not well regarded in certain government departments. But hypothecation of the value created in granting planning permission does have the advantage of being opaque. It is hard to justify saying, “York Colleges have been awarded an extra £30 million of public funds”, still harder to say, “York University has been awarded £100 million”. If such numbers appear on balance sheets, they are not easily identified as public expenditure. This is one advantage of using planning permission as one method to finance renewal cities.
The geographical proximity of supported causes to a particular development contributes to opaqueness because the development may increase the value of planning permission. For example, the value of a business park at the University of York will be increased because it is located in an extension to the University campus.
A renewal city will have a “community brand” that will increase its value. It will attract inhabitants who are enthusiastic about the moral purpose of the city. In general, people are prepared to pay more to live in an attractive environment. In the case of a renewal city, the attractiveness of the environment will be measured not only in terms of its physical attributes of location, layout and architecture but in the ambience that is created by its sense of community guided moral purpose.
Local democracy and the objectives of renewal cities
Development corporations and agencies are usually place-specific but do not start with a local democratic structure. Instead, they are founded as bodies appointed by national government. However, after the initial development phase, it is usual that control is passed over to local democracy.
In general, the governance of renewal cities should follow this route. The UK government, if it has parliamentary support, can change local democratic structures. But in allowing a transition from a development status to one governed by local democracy, the goals of any particular renewal city should be recognised.
In the case of the Hoo Peninsula Renewal City, it would be recognised that the government has allocated valuable resources, particularly the wealth generated through planning permission in exchange for commitments made for the benefit of the common good. It would be a case of moral hazard if local democratic processes were allowed to subvert these commitments for their own gain.
Carbon Capture and Storage
The proposal for a large coal fired power station at Kingsnorth on the Medway Estuary in Kent has engendered much criticism. In production, this power station could provide 3.6% of the UK’s electricity. However, it will also generate more carbon dioxide than that produced by Ghana, a country of 22 million people.
There are many commentators within the green community who deplore the use of coal as a form of fuel and see the building of new power stations as a retrograde step. However justified their fears are, the problem must be addressed from a realistic viewpoint. Vast reserves of coal lie untapped under the surface of the ground. As the supply of oil and gas become scarcer, more expensive and more politically problematic, countries in Europe and beyond will turn to coal as an alternative. The effect of releasing carbon dioxide from the power stations of these countries will be disastrous. There is therefore an urgent reason to promote technical means by which this might be prevented from happening. Carbon capture and storage (CCS) is the most important candidate technology.
At its most basic, carbon capture technology removes carbon dioxide from flue gasses and pumps it to underground reservoirs for storage. If done correctly it should store carbon dioxide for at least a few hundred years. Geological structures exist that would extend this time scale to many thousands of years.
Kingsnorth should be a working example of this technology.
The Hoo Peninsula Renewal City
The Hoo Peninsula, which contains Kingsnorth is approximately 120 square kilometres, with a population of 25,000. This proposal is to use 50 square kilometres of this area to build a renewal city. It would have a population in excess of 250,000 people. The value of the associated planning permission will be in the order of £10 billion – planning permission for 100,000 dwellings at £100,000 per dwelling.
This proposal is that a significant proportion of the wealth generated by Hoo Renewal City should be set aside to fund full carbon capture at Kingsnorth. This would be a very large operation and the carbon capture technology is as yet in its infancy.
The remainder of the wealth generated by the city should be used to promote lifestyles for the citizens that can realistically begin to reverse the upward trend of greenhouse gases.
This is not the place to be too prescriptive. However the planning authorities might consider carbon negative building techniques, restricting the use of cars and subsidising public transport.
Moreover Hoo Peninsula Renewal City is rural enough to aim for a high degree of local self-sufficiency. In particular, basic food production should, as far as possible be local.
Town Planning Precedents
There are examples of cities built to address the issue of climate change. The UK is planning a series of eco-towns with special conditions for planning permission. The buildings must be “zero energy” or “carbon neutral”. These terms have similar effect in practice. A zero energy building a general term applied to a building with a net energy consumption of zero over a typical year. Wikipedia reports this criticism:
“Most ZEB definitions do not include the emissions generated in the construction of the building and the embodied energy of the structure which would usually invalidate claims of reducing carbon emissions.”
An example of such a development is the Beddinton Zero Energy Development (BedZED). The Peabody Trust Website describes BedZED as follows:
“The BedZED design concept was driven by the desire to create a net ‘zero fossil energy development’, one that will produce at least as much energy from renewable sources as it consumes. Only energy from renewable sources is used to meet the energy needs of the development. BedZED is therefore a carbon neutral development – resulting in no net addition of carbon dioxide to the atmosphere.”
A report by Bioregional on the embodied carbon dioxide in the BedZED gives a figure of 675 kilograms of carbon dioxide for every square metre of floor space. The embodied carbon dioxide of a three bedroomed flat is given as 67.5 tonnes.
Estimates of the carbon footprints of the residents of BedZED are also disappointing. While they have footprints lower than other people of similar lifestyles, the reduction is slight compared to government targets.
Similar criticisms have been made of other developments such as Dongtan in China. Wikipedia reports:
“However, the planned ecological footprint for each citizen in Dongtan is currently 2.2 hectares , higher than the 1.9 hectares that the World Wildlife Fund claims is theoretically sustainable on a global scale.”
The Hoo Peninsular Renewal City will develop lifestyles which are truly carbon-negative.
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