Poor design and lack of amenities has long term financial and social costs
Work carried out by CABE, University College London and Department of Environment Transport and the Regions in 2001 identified both economic and social costs of bad design. These social costs include isolation and mental health issues caused by poor public transport networks, inability for people to access local job opportunities because of poor public transport connections, issues with housing tenure and management, and in particular, a growth in buy-to-let properties making it difficult to manage the profile of areas in the long term.
Opportunities need to be created to develop local employment and enterprise and other community-based service provision and also to support communities as they grow. Investors need to value the additionality of such approaches and time frames need to allow for more complex contracts and work programmes. A common problem raised by stakeholders involved in creating new settlements is the high upfront cost of investing in social infrastructure and financial instruments when the business model focuses on short-term returns, even when these costs are miniscule in comparison to large capital cost.
RIBA has argued for a new approach to ‘place shaping' - one that requires, new financial instruments that involve long-term investment rather than a quick return and include incentives for investment in community and social infrastructure.
"When regeneration is property-led, contracting regimes impose their own logic on investment and hiring, and commitment to local benefit is lost. Key informants noted a common requirement to spend public funds quickly (called 'front-ending') to achieve early visual results to boost investor confidence and lever in private funds. This can push the development process too fast to link it to the requisite employment strategy, and the community participation, skills assessment, training and adult basic education which needs to go with it."
Sustainable by 2020? A strategic approach to urban regeneration for Britain's cities
Michael Carley and Karryn Kirk, (1998)
Evidence from the Department of Communities and Local Government's New Towns review suggests:
"There was a continuing need for and neglect of community provision, despite persistent calls from several of the development corporations. This neglect was primarily related to funding of such provisions, which were either not figured into the plans or were the first to be cut when there were limitations on spending and resources became difficult to obtain. Despite, or because of this, many new towns were humming with community activities and community spirit. This sometimes appeared to "spring into being" and at other times was fostered by the community development officers employed in the social development departments."
As quoted in Learning from the Past?
Marina Scott, Neil Stott and Colin Wiles, Keystone Development Trust (2009)
Evidence suggests the most successful developments in Europe generally involve a partnership between commercial providers and local government with the private sector taking a long-term stake in the development through service charges or rental income. In the UK the most high quality and successful schemes tend to be led by owners/investors who are able to take a longer term view. This approach is found in European models of residential development. A report by URBED et al found that one of the key determinants of high quality European residential developments was the leading role played by the local authority in setting the project on the right course and in making sure that quality was maintained through to the end.
"...getting all the public stakeholders to work together seems much easier...often, the projects had been started by one or more visionary leaders but, perhaps even more importantly, the local authority had some financial capacity and had retained or acquired the skills to manage and direct the project itself. The private sector was invariably involved but within a framework that was strongly controlled and directed towards the vision that had been set.....many of the builders and investors are relatively local."
Beyond Eco-towns, applying the lessons from Europe
URBED, PRP Architects and Design for Homes (2008)
New business models are needed to support investment in social infrastructure at the early stages of new communities, and over the long-term. Innovative financial instruments could tie financial and other institutions into the long-term success of the project, avoiding the problem of disincentives for investing in social amenities.
"North Huyton's regeneration programme started with funding through the NDC programme and the establishment of Knowsley Housing Trust following stock transfer from Knowsley Metropolitan Borough Council. Knowsley Housing Trust had the remit of changing the tenure balance and improving the stock. To oversee a wider regeneration programme the development partnership Revive was formed bringing together the NDC partners, Knowsley Housing Trust, Knowsley Metropolitan Borough Council, private developers and community representatives. The development partners were chosen by competition and after a negotiated development agreement. The Revive partnership board are responsible for monitoring the agreement which is set for a period of ten years."
Transforming Estates ECOTEC and the Chartered Institute of Housing, (2009)
Ireland - Ghost Estates
The dramatic end of Ireland's property boom has created a number of ‘ghost estates' around the country: developments of ten or more houses where half of the houses are either vacant or only partly built as construction has halted.
Systematic evidence about the cost of developing social infrastructure is difficult to identify from the New Towns review or the private sector. However, one investment model developed in Milton Keynes identifies a tariff contribution of £700 per new dwelling towards the cost of providing social and community infrastructure - defined as: ‘activities, resources and support that strengthen the skills, abilities and confidence of people and community groups to take effective action and leading roles in the development of their communities.'