Community land auctions
A fair share for communities
Land auctions are a radical way to change the community’s incentives toward accepting development. They have now been discussed for several years – it’s time to test their practical value
Britain’s housing shortage clearly needs some radical solutions. [These are] innovative and challenging proposals about how the problem could be solved.
Community land auctions should commence
Community land auctions will ensure that councils see the benefit of the value generated when allowing new housing, giving them a reason to say yes to new homes. They are a fairer way to help councils fight the housing crisis
[This] pathbreaking work shows how to remove the planning logjam without providing unearned windfall profits for existing landowners.
Community land auctions are an exciting policy idea that could help us build more housing whilst ensuring that local communities see the benefit of allowing development near them.
Currently, when land is given planning permission for new homes it can increase in value by over 80 times. Currently, the vast majority of this goes to the landowner and other players, with very little captured by the local authority. Community land auctions would give councils the tools to capture much more of the value uplift, which they can then spend on local priorities, like improved infrastructure and better public services.
Under a community land auction, a council invites landowners to submit sealed bids of land for development. Because they want the council to choose theirs, would-be sellers are incentivised to offer plots at competitive prices. The council then judges these offers, based both on the land’s suitability for development and the potential value uplift. Chosen sites are then auctioned to developers with permission for new homes. Because the land is much more valuable with planning consent, it will sell for a higher price. The difference is captured by the council to spend on local priorities. You can read more about CLAs in the original work on the subject.
Communities see the benefits of new housing
CLAs will enable communities, not landowners, to capture the value uplift generated when planning permission is granted.
More income for councils
CLAs will generate income for councils to spend on key local priorities like social housing, infrastructure and public services.
A reason to say ‘yes’
CLAs give communities a stake in saying “yes” to new housing, boosting housing supply.
Find out more about Community Land Auctions
Support for Community Land Auctions
The Secretary of State now has the power to pilot community land auctions after a broad coalition pushed for them to be included in primary legislation. They have been endorsed by leading experts as well as campaign groups:
Martin Wolf, Financial Times
‘Innovative and essential’
Deb Derbyshire, Chair HTA Design, Historic England Commissioner, President London Forum of Civic and Amenity Societies, Former President RIBA
For development to be popular and successful, a fair share of its benefits need to go to the wider local community, allowing investment in services, infrastructure and affordable housing. Land auctions could be a powerful way to achieve this, a powerful tool with which local authorities can ensure development works for the whole community.
Dame Kate Barker, Chair of the UK Government Barker Review of Housing Supply
‘Land auctions are a radical way to change the community’s incentives toward accepting development. They have now been discussed for several years – it’s time to test their practical value’
Lindsay Judge & Daniel Tomlinson, Resolution Foundation, Home Improvements
Community land auctions, with local authorities acting as brokers in land deals, should be explored further through a proper pilot scheme
Anya Martin, Director, PricedOut
‘Community land auctions will ensure that councils see the benefit of the value generated when allowing new housing, giving them a reason to say yes to new homes. They are a fairer way to help councils fight the housing crisis’
Trudi Elliott CBE, then Chief Executive of the Royal Town Planning Institute
‘Britain’s housing shortage clearly needs some radical solutions. Dr Tim Leunig always argues his case very powerfully, and in this instance makes innovative and challenging proposals about how the problem could be solved.’
Chris Giles, Financial Times
‘Tim Leunig’s pathbreaking work shows how to remove the planning logjam without providing unearned windfall profits for existing landowners.’
Shelter, Solutions for the housing shortage
Institute for Public Policy Research (IPPR), We must fix it
‘Community land auctions should commence’
Sir Ed Davey, Leader of the Liberal Democrats
‘This scheme goes with the market, it is localist and will deliver far more houses than any other proposal.’
John van Reenan, LSE
‘The economics are clear that Britain needs more houses, but reforms to the planning system have been consistently blocked by politics. Tim Leunig’s proposals show how to cut the Gordian knot.’
Aria Babu, The Entrepreneurs Network
‘The Department for Levelling Up, Housing, and Communities should work with local authorities to fund trials of Community Land Auctions.’
Professor Paul Cheshire, LSE
‘In real terms the Swiss have had stable house prices for 40 years; Swiss local authorities get real tax incentives to encourage them to allow building. The Swiss also have a strong economy. Tim Leunig’s highly original but simple idea could inject real incentives into house building in Britain. Maybe our economy could become more Swiss!’
Victoria Payne, Chair of the RTPI Urban Design Network
‘…pilots are pilots for a reason, and it seems worth at least testing.’
Coalition for Economic Justice
‘There is, however, a strong case for moving incrementally in this direction, through a land value-based approach to commercial property taxation or by trying to capture the value of land for the public in other ways; public land banks and/or community land auctions.’
Sir Stuart Lipton, founding chairman of the Commission for Architecture and the Built Environment
‘Tim leunig’s proposals would be a major step forward to solving land supply problems and give the community a real incentive to welcome development’
Professor Paul Klemperer, Leading UK auctions expert
‘Tim Leunig makes a compelling case that Community Land Auctions are both desirable and feasible’
Professor Philip Booth, IEA, Queen Mary’s University
‘In the UK, all methods of expressing economic preferences on land-use planning issues are completely excluded by our planning system. This has disastrous results from the point of view of those who cannot afford housing and unsatisfactory results from the point of view of preserving environmental amenities. This proposal is an important attempt to rectify this long-standing defect.’
Alex Morton, Policy Exchange
‘Tim Leunig’s analysis is typically excellent. He has played a key role in highlighting current planning failure.’
Professor Stephen Nickell, First Chair of the National House Planning Advisory Unit
‘A major step forward in making us a better housed nation’
Freddie Hoareau, Liberal Democrat Councillor
Communities deserve to see a fairer share of the upside from new developments. Community land auctions would help councils deliver more of the homes we so dearly need and help pay for our vital, underfunded local services.
Social Market Foundation, The politics of Housing
Liberal Democrats Action for Land Taxation and Economic Reform
‘CLAs could empower localism. Councils could use the profits from CLAs as they wish, for example to reduce local taxes. Tim Leunig’s paper waxes lyrical about ‘converting NIMBYs into IMBYs’.’
John Muellbauer, University of Oxford
‘Tim Leunig has argued very cogently for community land auctions as a way for local governments to acquire development land to relax land supply bottlenecks.’
Darren Johnson, then Green Party member of the London Assembly
‘Give councils an incentive to release land for housing with community land auctions;’
Lib Dems for Housing
‘Liberal Democrats have long supported community land auctions, it’s exciting to see them back on the Agenda. They could deliver more houses whilst spreading the benefits more fairly and giving the local community a reason to say yes. A textbook example of community politics!
Lord Lucas
‘It has long seemed to me deeply inequitable that when it comes to property development, the landowner gets so much for the uplift and the community gets so little. We very much need to explore and try out ways of setting that right, and this seems an excellent thing to try.’