This Practical Guide is intended to help local authority officers and elected members considering whether to promote a new Garden City to learn more about how to deliver and finance the project.
Use of the value that results from the development process to fund delivery is a fundamental aspect of the Garden City model, and is closely tied to the type of organisation that delivers the development. There are specific opportunities for larger sites, of 10,000 homes or more. However, much of the information set out here is also applicable to smaller ‘garden villages’ or urban extensions that aspire to the Garden City principles.
Principles for success
Approaches will vary, and professional advice will be necessary to identify the right model in each case, but there remain three headline factors which should drive the selected approach. Early consideration of these factors is essential for better delivery:
1. There is always an opportunity for land value capture:
Funding sources for new Garden Cities will be diverse, but places can be self-financing over time through the capturing, sharing and re-investment of land value uplift. While the Garden City model, applied early and comprehensively, provides the greatest opportunity for this, there remain opportunities, albeit more limited, to capture land values on smaller sites and for schemes that are already some way through the development process.
2. The delivery body will de-risk the process for investors and stakeholders:
A dedicated organisation, with the right staff and skills, is essential to oversee the complex task of delivering a new community. Delivery vehicles that commit to high standards and long-term delivery make private and public sector investment an attractive prospect. Such an approach also provides reassurance for local people as it demonstrates a commitment to deliver what is promised.
3. Successful places require a long-term stewardship model:
It is vital that a proportion of the development values captured through the delivery process is invested in one or more organisations that will look after the development in the long term and in the community interest. The right financial model can ensure that funds are available in perpetuity to maintain community assets and provide additionality to the services provided by the local council.