Market forces or institutional factors: what hinders housing development on brownfield land?

Abstract

Purpose – The purpose of this paper is to understand the barriers to housing development on brownfield land in the UK, making clear the distinction between market and institutional factors and identify appropriate public and private sector solutions to encourage more residential development. Design/methodology/approach – In this research, the city of Nottingham in the East Midlands of England was chosen as the case study city. The research was based on secondary literature review of relevant local authority reports, Internet searches, consultancy documents and policy literature. Detailed case studies were undertaken of 30 sites in Nottingham which included a questionnaire survey of developers. Officials from Nottingham City Council assisted with the gathering of planning histories of the sites. The investigation took place in 2014. Findings – Based on the evidence from Nottingham, the most frequently occurring significant constraint was poor market conditions. At the local level, it is clear that there are options that can be promoted to help reduce the level of friction in the market, to reduce delay and cost and, thus, to encourage developers to bring forward schemes when the market allows. Securing planning permission and agreeing the terms of a S106 agreement is recognised as a major development hurdle which requires time to achieve. Practical implications – Market forces were clearly the dominant factor in hindering development on brownfield sites in Nottingham. The local authority should be more circumspect in the use of S106 agreements in market conditions where brownfield development is highly marginal. Imposing additional taxation on specific developments in weak markets discourages development and is counterproductive. Originality/value – This detailed study of 30 development sites is significant in that it provides a better understanding of the barriers to residential development on brownfield land in the UK.