The best practice report by ULI Europe pinpoints the crucial role of the public sector to increase this supply of ‘intermediate housing’ at scale. The public sector is deemed crucial by providing a long-term stable vision, strategy and framework for providing intermediate housing, while at the same time directly enabling more land for development. The public sector is also integral to determining who will be eligible to live within intermediate homes for the long term, all in effective partnership with the private sector.
Pricing and availability of land is seen as the most significant barrier to increased supply based on a survey of ULI members across Europe. Identifying suitable land at a price that can enable more intermediate housing is challenging because land value is often calculated as a residual – the difference between the value of what can be built on a site and the costs of producing the housing. This means that often, even if a developer can find savings in the development process, these savings will be captured by the landowner rather than being passed onto the residents.
With the public sector being major landowners in many countries across Europe, it has the ability to increase supply. Even in cities where the public sector does not have significant land holdings, it has an important role through planning and other land assembly tools, to enable development.
ULI Europe chief executive, Lisette van Doorn, said:
“If the price of publicly-owned land can be reduced, the public sector has huge potential to stimulate the delivery of more intermediate housing. Lower land costs help in the equation to provide good-quality homes with an appropriate return for investors, as well as meeting the social and economic ambitions of city leadership.”
A summary of ULI’s recommendations continues tomorrow.