New financial tools needed to boost regeneration, claims report
The All Party Urban Development Group (APUDG)’s latest report, Regeneration and the recession:unlocking the money highlights the need for cities to have additional financial tools and revenue raising options.
An APUDG inquiry has taken stock of conditions in the regeneration industry, has assessed the viability of existing regeneration financing models and has examined the challenges involved in introducing alternative financing arrangements, such as Accelerated Development Zones (ADZs), which could be adapted from the US Tax Increment Financing (TIF) model.
The report argues that accelerated development zones (ADZs) – a UK variant on tax increment financing (TIF), which forward funds infrastructure taken from future increases in tax revenue caused by new development – should be introduced as a key step towards achieving this objective.
The APUDG report surfaced as the Campaign to Protect Rural England (CPRE) published a 'ground-breaking study', Brownfield Market Signals: Greenfield housing land supply and the viability of brownfield housing development', demonstrating that an excess of greenfield land with planning permission could render brownfield development unviable and demonstrating that an excess of greenfield land with planning permission could render brownfield development unviable and undermine urban regeneration.
Based on the oral and written evidence submitted to the group’s inquiry, the APUDG recommends that:
- In the next Pre-Budget Report, the government should pilot a significant yet manageable number of TIFs/ADZs
- The next should use these pilots to push through a fully national TIF/ADZ scheme so that cities can use accelerated development zones from 2011
- All cities need to adopt a more proactive approach to working with the private sector, and take on more risk
- The Homes and Communities Agency (HCA) should establish a specialist regeneration funding team to support local authorities with the practical challenges of implementing different funding models in the current climate
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