Capacity for 20,000 homes on Leeds brownfield sites, but prospects for building them gloomy

Hunslet Mills – “not considered viable in current market”

There are over 130 privately-owned brownfield sites lying undeveloped in Leeds – with a capacity for nearly 20,000 new homes, according to data released by the local council.

But a Leeds City Council report accompanying the figures paints a gloomy picture of the prospects for significant development work getting under way on the majority of such sites.

The list of 133 sites (with scope for an estimated 19,486 homes) includes a large number where planning permission has expired, others where schemes have fallen through or developers have stopped communicating with the council, and others where the status is described as “not likely to progress in current climate”.

The report – prepared for a meeting next week of the council’s housing and regeneration scrutiny committee – gives a number of reasons for the dramatic fall-off in brownfield site house-building since pre-credit-crunch 2006, when 97% of all homes completed in the city were built on brownfield sites:

In the city centre, developers have found themselves unable to make their expected financial return on building flats on land bought at pre-crunch prices – and some of them have gone bust.

House-builders’ interest has moved away from non-central locations towards what the report describes as “edge-of-city opportunities” – a situation exacerbated by the council’s release last year of greenfield sites for housing developments following a series of costly defeats at planning tribunals.

And developers with planning permission for mixed use developments in the city centre are now looking at concentrating on the retail and commercial side rather than the residential.

“Financial viability” holding back development

Garnetts paper mill, Otley – “discussions about viability ongoing”

In some cases landowners may be just waiting for the market to improve before offering a site up for  development. But, the report notes, “financial viability is cited as the most common reason from developers for holding back development of brownfield sites”.

The council and government agencies are offering what help they can to stimulate house-building on brownfield sites in the city, the report says: the Homes and Communities Agency has funds, but they’re limited; the council has temporarily cut the requirement for affordable housing in most areas and has started to talk to developers about reduced S106 contributions; and it can occasionally give financial backing to key projects where there are “significant benefits to the city” such as the loan agreed in principle this month to kick start the Kirkstall Forge development…

And the report does raise the prospect, albeit vague, of linking greenfield and brownfield development:

“… consideration may need to be given to an approach that pragmatically connects greenfield development proposals to the development of brownfield sites in a way that enables developers to meet demand in outer areas whilst contributing to the development of previously used land and helping meet housing needs in inner areas,” it says, without going into any specifics.

But meanwhile …

“… the large scale of many viability issues for stalled sites cannot be overcome through these means alone and unless there is either a significant market uplift or a change in value expectations for developers seeking to recover the costs of land purchases made at the height of the market, there will be a continuing lack of an economic basis on which brownfield sites can be built out,” the report says.

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9 Responses to Capacity for 20,000 homes on Leeds brownfield sites, but prospects for building them gloomy

  1. Peace says:

    The problem is there are far too many landowners who cannot afford to develop their land because they bought it at the height of the market. This is what is clogging the system. Councils and local government should be coming down harder on them. There should be rules that if you do not develop land in a given time period then you are forced to auction off your land. This would ensure land is always at a market price and house building is continuous and not stunted.

  2. freedomnow66 says:

    Pretty draconian don’t u think peace?? A think if that rule was in place it would frighten off potential buyers of land, unless the price was so ridiculous low, then that would depress land value!! A think the answer could lie with linking green sites with old as it states in the article!! Unfortunately it doesn’t say how!! If u remember LC I suggested this a while back when commenting on a previous article..

  3. freedomnow66 says:

    Please substitute brown for old in previous comment although I guess either works!!!

  4. Peace says:

    Hi freedomnow66. My point is about keeping land value at a market price. At this time it would mean some landowners would have to take a Greek haircut. We are heading towards a potential housing crisis because the supply side isn’t working. We have brownfield land available and planning permissions in place. What we also have is landowners who are land banking because they bought land at the incorrect price and/or cannot secure finance because they have too little capital. These groups need weeding out of the system.

  5. freedomnow66 says:

    OK peace, if I have this Right, u would advocate a retroactively applied rule on a private sale of land/property . I understand the need to do something, but the owners of these properties etc aren’t sitting on them for laughs and giggles !!! I’m not a property developer but am sure that the general plan is as soon as money is invested in said property then the plan is to move as fast as possible to get the original money back out. A think a way of overcoming the problems via tax incentives perhaps etc would be more appropriate than wielding an ax to developers who have cash flow problems and maybe just hanging on!! Just saying!!

  6. Peace says:

    Yes. It’s been done before too. CPO’s were brought in to deal with substandard private lettings. [opens can of worms]

    Some developers do buy land to build in the short term. However, some buy it as a speculative asset to sell it on at a higher price. There are also occasions where some groups have owned land for over 20 years and done nothing with it. The land can effectively sit on a balance sheet as an asset. And this is the problem. Land should not be treated as an asset/ commodity. It is a completely different element of the capitalist system.

    I agree on the use of tax incentives but not for residential development. On the commercial side: yes, because there is demand side issue. Developers should be encouraged to speculatively build. However, this can only be done if local agencies have a strategy to help support business start-ups or attract business to the area.

    On the residential side it is a completely different matter. There is enough brownfield land available. There is enough demand. However, we have land owners not doing anything because they don’t have the funds or the capital to get finance.

    If we are to avert a housing crisis then yes Government needs to wield an axe.

  7. Phil says:

    I would have thought Developing brownfield sites would run counter to LCC’s urban sprawl socio-economic strategy. Building further out encourages more driving and car dependency which is good for the economy. (But bad for everything else)

    • Le Corbusier says:

      Not necessarily, if the transport (not just roads, but public transport, ped and cycle links), technology (broadband) and employment infrastructure is planned in/around as part of the development.

  8. Paul Thomas says:

    There are a number of problems with brownfield developments (some of which I’ve mentioned before on LC comment, and which are confirmed by this article): they can be awkward to prepare for redevelopment – demanding bespoke development to fit largely predetermined conditions with attendant problems of servicing and access; and land values are higher in city centre than at it’s edges and in the countryside.

    It may sound radical to lay the blame for the lack of building in brownfield at the doors of ‘land owners’, but the problem has been one of government policy over the last two-decades, underpinned by an environmental agenda that would rather see more and more people crow-barred into ever smaller plots of previously used land than build on an ever expanding green-belt.

    As James Heartfield has argued in his book ‘Let’s Build! Why we need 10 million new homes in the next 10 years’ (2005): “Policies that are designed to restrict development lead – unnecessarily – to people being crammed into areas that are too small to house them. Post-war policies of easing overcrowding have been reversed to make higher population densities a goal of public policy.”

    Rather than Councils forcing land-owners to develop, or relinquish their land (as some comments suggest), Government and councils need to win the political argument for a new round of mass house building in this country. That means taking on the ‘sustainababble’ agenda and championing the interest of people first.

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