Spotlight: Development
The Value of Placemaking

The Value of Placemaking
The Value of Placemaking

13 October 2016, by Susan Emmett

Early spending in infrastructure, local amenities and public spaces creates better places. This report examines why it pays to take the long view and partnership approach

We need to build more homes. Developing large sites is essential if we are to deliver the 300,000 new homes a year to meet housing need. But creating great new places with their own identities where people really want to live requires more than houses.

 

Successful large-scale residential developments also need a mix of local amenities, shops, workplaces, schools, public spaces and different housing types. This mix builds a stronger, more resilient community with economic vitality of its own.

The social arguments for creating sustainable communities for existing and future residents are strong and have been well documented elsewhere. In this report, we build a financial case for investing in place, addressing some of the challenges developers face and suggesting how these barriers can be overcome.

Our analysis shows placemaking can pay off financially as well as socially. By building a simplified land value model for a theoretical urban extension site of 3,000 homes, we have demonstrated a scenario where additional early investment raises land values by 25%.

While the potential needs an assessment on a case by case basis, this uplift benefits the various parties involved in placemaking which in turn, enables the delivery of new neighbourhoods that communities really want. Harnessing these gains to meet Government’s and Local Planning Authorities’ aspiration for higher quality places, requires a long term vision and a partnership approach.

Investing more, early on increases development risk and can act as a barrier to successful placemaking. The solution comes in the form of patient capital and/or JVs with landowners willing to draw land receipts later in the development process. Landowners, public bodies, pension funds, equity investors, house builders and master developers all have a part to play.

Another important component is public sector finance. This can take the form of forward funding by the local authority to ensure the early delivery of a school, for example, or Government loans such as the £3bn Home Building Fund by the Homes and Communities Agency (HCA). Support by streamlining the planning process and flexibility on the timings of delivery of section 106 obligations also help to reach a common goal of creating great places.

With so much market variation, site types and developer models, there can be no single formula for placemaking. However, our case studies provide lessons on the effect of investing early and the range of uses normally expected in successful places, such as schools, public realm, shops, services and employment uses.

 

 
Alconbury Weald ferris wheel

▲ As part of a community engagement programme at Alconbury Weald, Urban & Civic held a big event in 2011. The Design and Discovery Day hosted 2,500 people who came along to see nearly 100m of display boards and give their views. A Ferris Wheel allowed them to enjoy the 575 hectare brownfield site from a different angle.

Articles from Spotlight: The Value of Placemaking 2016

Investment in place pays off

Creating better places makes financial sense. Our modelling shows how to make it work

Legacy scenario: the importance of timing

Early investment raises land value but also increases development risk

A common goal benefits all

13 October 2016

A common goal benefits all

A longer term view and willingness to draw receipts over a period of time is key to creating value for all

When and how to spend it

13 October 2016

When and how to spend it

Earlier investment brings greater benefits. Spending on schools, public realm and amenities sets the tone for a new neighbourhood

Creating great places requires support

Investing in placemaking creates quality new neighbourhoods, enabling more new homes to be built faster. Land, patient capital, partnerships and Government support are key

 
 

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Key contacts

Susan Emmett

Susan Emmett

Director
Residential Research

Savills Margaret Street

+44 (0) 203 107 5460

 

Lucy Greenwood

Lucy Greenwood

Associate
Residential Research and Consultancy

Savills Margaret Street

+44 (0) 20 7016 3882

 

Chris Buckle

Chris Buckle

Director
Residential Research

Savills Margaret Street

+44 (0) 207 016 3881

 

Jim Ward

Jim Ward

Director
Residential Research and Consultancy

Savills Margaret Street

+44 (0) 20 7409 8841

 

Richard Rees

Richard Rees

Head of
Development Services

Savills Margaret Street

+44 (0) 207 016 3726

 

David Jackson

David Jackson

Head of National Planning

Savills Margaret Street

+44 (0) 207 420 6371