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The Northumberland Line

How land value capture is being used to help communities

When infrastructure such as a new rail line is built, the value of the land around it goes up: suddenly this land is desirable for housebuilding because people want to live near the new rail route. Landowners hit the jackpot. The problem is that such infrastructure projects are often tricky to get funding for in the first place. It ought to be possible to take some of that potential uplift in land value, and invest it in the good infrastructure to get projects such as new rail lines off the ground.

This idea is called Land Value Capture (LVC). LVC has the potential to solve one of the big issues we face – that it’s easier and cheaper to build roads for new housing rather than public transport. LVC helps solve this problem, and also gives landowners and developers incentives to build higher density developments with less space for cars.

Dr George HazelLVC is being put into practice by Dr George Hazel of E-Rail, who has written this guest blog for us.

“For the last ten years, E-Rail has been working on a way to plug the funding gap for new investment (primarily in rail) by developing a means of capitalising on the uplift in land value around infrastructure projects and using it as a funding source.

This is known as Land Value Capture (LVC) and it is a way for communities to recover and reinvest land value increases that result from public investment and government actions. The concept of LVC is not new. It was used for the Canadian Pacific Railway completed in 1881, providing 12,500 miles of new track, and the London Metropolitan Line, 41 miles of underground and 34 stations, which opened in 1863. More recently, the Ørestad metro, that opened in Denmark in 2002, was also funded using LVC.

The historical schemes were done in an age of different planning and procurement rules and regulations, and the Ørestad project used land wholly owned by the Danish State and the City of Copenhagen. It is not so easy to do it here and now, given the necessary constraints of independence and discretion required by current procurement and planning rules and regulations, especially when seeking to secure contributions from multiple private sector landowners and developers interested in maximising their return.

E-Rail spent many years researching and developing a method of capturing and sharing this uplift created by a new transport facility between the provider of the service and the landowners and developers who benefit. The process was not easy, but we have now developed, tested and delivered a method that is unique in the UK. We’ve been doing this as we care about improving our infrastructure and developing sustainable communities.

In the north east we have proved it can be done, working with Northumberland County Council (NCC) to secure between 25% and 30% of the capital funding required for a new passenger rail line from Land Value Capture (LVC). This project will have a massive benefit to communities, improving connectivity without increasing the number of cars on the road.

The line – which Beeching closed for passengers in the 1960s – was allocated £34m to commence early works by the Department for Transport (DfT) on 23 January 2021 and will see 18 miles of track upgraded and six new stations. This will be the first time our methodology has been used globally. [See a map of the Northumberland Line].

Our method can be applied to any fixed infrastructure transport scheme – heavy and light rail, metro, BRT, roads, bridges, ferries and potentially flood prevention schemes. It can apply to single stations or to large multi-station schemes where land value uplift will occur.

As we emerge from the COVID-19 pandemic, and the economy recovers, support from LVC could play an important role in funding future transport infrastructure.

We know that there are more opportunities for this to work elsewhere. In fact, there are a significant number of rail projects, both heavy and light, around the UK that local transport authorities want to deliver for social and economic reasons. Funding for many of these projects has historically been constrained, and this will be further exacerbated by the unplanned government spending on the COVID-19 pandemic. We have already seen a reduction in central government infrastructure funding for Network Rail and Transport for the North and the current economic outlook suggests that this is just the start. We believe LVC could be a critical building block to economic recovery.”

About George Hazel

Dr George Hazel is a Director of E-Rail, E-Rail International and the George Hazel Consultancy. E-Rail was set up in 2010 to help secure and deliver private sector money raised from land value capture to help contribute significant capital cost towards the building of new public transport infrastructure. The company has worked around the world introducing its methodology which is being explored throughout the UK, Sweden, Australia, New Zealand, and Canada.

Fawley Power Station site

Sustainability Through the Looking Glass

Richard TamplinGuest blog by Richard Tamplin

”When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.”

Of course, we all know what sustainability means – don’t we? It’s now almost 40 years since the United Nations, concerned by the rapidly deteriorating natural environment, established the World Commission on Environment and Development to devise a plan for achieving “sustainable development”. The Brundtland Report, named after its Chairman, defined the term as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

The United Kingdom signed up to the principles of the Brundtland Report by endorsing the Rio Declaration of 1993. And, when the National Planning Policy Framework (NPPF) was published in 2012, it announced, “The purpose of the planning system is to contribute to the achievement of sustainable development.” (para 6)

That being so, how it is possible to describe as sustainable development one of the latest proposed ‘garden villages’, to be built at the end of the A326 described locally as ‘the longest cul-de-sac in Europe’, over 18km from the closest train station and served by one bus per hour taking about an hour to reach any significant centre of employment? But that is how the two Local Plan Inspectors described the proposed allocation of land comprising the former Fawley Power Station for up to 1380 dwellings plus business uses when approving the New Forest District Local Plan in 2019.

Perhaps they were thinking of the proposed re-opening of the passenger service on the Fawley branch, which ceased in 1965; a good idea in principle. But today the line ends in the Exxon Refinery, an HSE Major Hazard, so on safety and security grounds impossible for a public passenger service. And if the line ends short at the former Hythe station, would occupiers of the “garden village” use the service? Fawley Waterside is to have a yacht basin and boat stack able to take up to 60m long superyachts, with neo-Georgian town houses or bijou cottages along green ‘droveways’ where ponies will wander freely, not to mention almost 4,000 parking spaces. (Artists’ images of the proposed development – complete with ponies – can be seen on the Fawley Waterside website.)

These occupiers will shop, dine and be entertained in the mega-centre of Southampton’s West Quay or in gastro pubs and restaurants in and around the New Forest. None of these is easy or convenient by public transport as users of Southampton station know. Worse, the existing but financially fragile Hythe to Southampton ferry is likely to close as Hampshire County Council would probably move its subsidy from the ferry to the branch passenger service. Already Hampshire have miraculously found money to ‘improve’ the A326, after denying for years there is any possibility of such funding.

Yet why do this when anyone familiar with this part of the New Forest knows that the everyday situation cries out for fewer cars, not more, when all roads are single carriageway, often single lane, and used, not only by walkers and cyclists, but also as of right by cattle, sheep, pigs and the well-known New Forest ponies, none of the latter having learned the Highway Code. Consequently, satnav predictions of 23-minute journeys between Fawley and Brockenhurst Station via Beaulieu are hopelessly over-optimistic, especially during summer holidays and in bad weather, when the journey may take an hour or more. On the A326 frequent road works and accidents cause similar long delays for commuter journeys to and from Southampton.

The answer to why this is now ‘sustainable development’ is to be found in the updated NPPF of April 2012 which introduced “The presumption in favour of sustainable development … which should be seen as a golden thread.” (para 14) On its face, this phrase appears to be a move closer to Brundtland and the Rio Declaration, but things are not how they appear in the looking glass world of Government. For plan-making this means that, “strategic policies should meet objectively assessed needs”, while for decision-taking it means, “approving development proposals that accord with the development plan without delay.”

This guidance was tightened in the NPPF 2018 to require “objectively assessed need” to be met as a minimum (my emphasis). Henceforward, sustainable development meant local plans must provide enough land for housing, irrespective of local circumstances. Yet the provision of land is a supply side issue, whereas need expresses the demand for homes and in a market economy must relate that demand to price. And to discover what “objectively assessed needs” means we must turn to Planning Practice Guidance, the on-line document of several hundred pages which can and does change frequently, with little or no notice, and without leaving a record of its earlier versions. This says the first step of the procedure for calculating the minimum local housing need is to identify the baseline using the household projection growth of 2014.

Why 2014? Because since then, despite biennial updates by the Office for National Statistics, the 2014 figures showed higher household growth than in any subsequent year, but Government has refused to recognise this changing situation. Therefore, projected housing needs for many local authorities to 2030 are now over-inflated by significant amounts and nowhere near that amount of housing land is required. This is particularly true in the South-East where ever-rising housing costs have choked off new household formation.

In the New Forest this absurd situation has led the District Council to seize any chance of land for housing, despite most of it in or adjoining the National Park, nature conservation sites of international importance, extensive safety protection zones or liable to serious flood risk due to climate change. The former Fawley Power Station site has all of these characteristics. However, as ‘brownfield’ land, it is a gift horse not to be turned away. But sustainable development it is not.

Guest blog by Richard Tamplin
Richard was inspired to go into planning when still at school after encountering Eric Lyons’ Span Developments in the early 1960s. Following a planning degree at Newcastle he worked for local authorities and for himself, taught planning, established an eco museum, and represented community groups. He became a Planning Inspector in 1986 and since retiring has sought to promote good planning as a public benefit.

Camilla Ween

Looking to the UN Sustainable Development Goals to guide good urban growth

Guest blog by Camilla Ween, RIBA, MCIHT, AoU, Harvard Loeb Fellow

The planet is in a climate crisis and the UK is in a housing crisis. We need a paradigm shift in the way we do things so that we can deliver about 250,000 new homes annually, that will not exacerbate our attempts to reach zero carbon and that will not destroy the planet.

The United Nations has outlined 17 Goals for sustainable development, the Sustainable Development Goals (SDGs), to help shape a future that delivers decent lives for people, while at the same time protecting our environment. The UK should look to these for guidance over all development that we embark upon, as the SDGs articulate most clearly what sustainable development looks like. UK local and national planning policies are inevitably UK focussed and do not encompass global issues. We should, therefore, use the SDGs to filter proposals and ensure that they fulfil the global aspirations for a decent future. Designs must push against local barriers if proposals fall short.

Transport is responsible for about 26% of greenhouse gas emissions, much arising from personal car journeys. Our society will not be able to achieve the UN goals if we do not change the way we travel; that means we need to create new communities that are NOT car dependent. That means careful consideration of where new development is located, as well as how we design new communities, for example, places that are well connected with high quality public realm and movement infrastructure that encourage people to want to move to a car-free lifestyle.

Development projects are often framed in very narrow and specific ways. However, if we keep an open mind and look broadly for opportunities, then by simply tweaking the design we can achieve so much more for little or no extra cost. Every design project offers the opportunity to include design features that help us achieve the SDGs’ aspirations.

The design process can and should seize opportunities to deliver sustainable solutions; good connectivity will encourage people to walk or cycle; careful design and layout can include biodiversity corridors and sustainable drainage solutions; pleasant public spaces, that feel welcoming, can help cement social cohesion.

By locating new development near public transport and designing communities that are well connected to the things we need to get to will mean that people are more likely to forgo car journeys. Rail travel has a very low carbon footprint, so developing along rail corridors is obvious and ensuring that the access to it is mainly by public transport, walking or cycling will mean that people will choose the low carbon travel option. That means no more ‘Park & Ride’ facilities.

Many transport projects I have worked on started with very narrow and specific briefs, but with a little discussion it was possible to broaden the remit and include other objectives. For example, a project for the city of Kano in Nigeria simply asked for five freight terminals and five bus interchanges; our design included permeability of the (very large) sites, biodiversity corridors, green infrastructure and walking and cycling networks that would integrate the sites into the city.

Kano, map of development

 

Kano, image of development

 

A project in Mexico City required interchange between two BRT routes and a commuter rail station. It was very clear that the solution could be very simple, but also that there existed multiple urban issues; the transport infrastructure separated an affluent community from an informal community and everyone from accessing a regional hospital by any other mode than a car and a local park was also inaccessible. We proposed a pedestrian and cycle bridge that would link both communities to each other, provide easy access to all the transport facilities, the hospital and the park and the bonus was a new public space at the heart of the community; the project went a long way to promote sustainable transport as well as social inclusion.

Mexico City project

Another project that I am involved with is Connected Cities. This is a methodology which proposes development (which encompasses many of the Garden City principles) along existing rail corridors and no more than 1km from a station. The principle is that compact settlements are created, with access to amenities or a rail station that are no more that 15 minutes away by walking or cycling. A cluster of settlements, each offering social, leisure, retail or education facilities would all be connected together via rail and form a Connected City. By being well connected, dependency on car travel is almost entirely overcome.

The United Nations has recently launched the Urban Economy Forum, which aims to help deliver the UN SDGs. This will be a repository of best practice and learning for future urban development that will create decent lives for people that do not harm the environment.

Camilla Ween is an architect and urbanist at Goldstein Ween Architects and a Harvard University Loeb Fellow. Her work focusses on sustainable urban design and the integration of transport, working in the UK and globally. She is a Steering Group member of the United Nations Urban Economy Forum, a Design Council Built Environment Expert and member of several other design review panels. She is a published author as well as a regular lecturer at international universities and conferences.