Land For Development

Land policy instruments for an enterprising society

Background and request for advice

The Dutch Government aims to harmonise land policy legislation in a Supplementary Act on Land Ownership, which will be incorporated into the Environment and Planning Act. The Supplementary Act will be crucial in tackling a number of major challenges, such as the energy transition, climate adaptation, and transforming city regions and areas of economic and demographic decline. These challenges often come together in major development projects. Getting such projects implemented depends to a significant degree on being able to use land policy instruments. The instruments should also be suitable for use by private parties, who play a key role in these development projects.

The Council for the Environment and Infrastructure (Rli) endorses the inclusion of land ownership in environmental and planning law and using this opportunity to harmonise, integrate and simplify the relevant policy instruments. However, the Council’s response to the consultation version of the Supplementary Act (1 July 2016) takes a different and more ambitious approach: it looks at the issues from the perspective of the challenges facing major development projects. Are the instruments suitable for taking on the range of complex development tasks and will they work equally well during economic upswings and downswings, in areas with high and low market demand (such as urban regions and regions in decline) and at the local and regional scales? And are the measures compatible with other relevant legislation? The Council suggests improvements where the current proposals are found wanting.

Erasmusbrug Rotterdam, photo: © Thea van den Heuvel/DAPh
'Erasmusbrug', Rotterdam, photo: © Thea van den Heuvel/DAPh

Three requirements

The Council’s main conclusion is that land policy should not only be harmonised, but it needs to be modernised as well. The Council identifies three requirements for the Supplementary Act:

  • First, the Act should be compatible with the philosophy and broadened scope of the Environment and Planning Act. The Council concludes that on this score there is room for improvement: the Act does not provide sufficient instruments for implementation, and the instruments it does provide require detailed plans that are not appropriate for facilitative planning and ‘organic’, or incremental, area development.
  • Second, the legislation should support all types of land policy (from active land policy to facilitating land policy) so that subnational players can choose the instruments appropriate to their own projects and the local planning and political contexts. Although the Supplementary Act takes this approach, in some areas it misses the mark, especially concerning the instruments for a facilitating land policy. For example, municipal councils should have the freedom to decide whether or not to make policy instruments available for use by developers.
  • Third, as financial shortfalls are a major constraint on taking projects forward in good time, the legislation should facilitate a better distribution of the costs and benefits of land developments to improve the chances of developments going ahead. Here, too, the Council sees room for improvement, especially on cost recovery and making regional agreements.

Eight recommendations

The Council makes eight recommendations for a modernised land policy:

  1. Make the land policy instruments more compatible with the objectives of the Environment and Planning Act
    The Council recommends that land policy instruments, such as expropriation and pre-emption right, can also be used in pursuit of environmental quality objectives.
  2. Provide instruments for a facilitating land policy
    Municipalities can choose to manage area development projects themselves or bring in private parties (e.g. housing associations, healthcare providers, developers and building cooperatives) and facilitate the development process. The Council recommends that private parties such as these should also be given the opportunity to deploy land policy instruments themselves, under certain conditions.
  3. Link the right to develop to an obligation to develop
    When plans for a new development have been adopted by the municipal government, landowners have the right to carry out the development themselves. The Council recommends making this right to develop conditional upon completing the development by a specified date.
  4. Speed up the expropriation procedure
    In the current situation, expropriation procedures often drag on unduly and those involved are kept in the dark about the expropriation process and the amount of compensation for far too long. The Council recommends giving landowners a legal right to receive a reasonable offer from the expropriating party within a fixed period, backed by a right of appeal to the Council of State, with a time limit on the decision.
  5. Drop proposed urban land readjustment regulations
    Urban land readjustment is when private parties agree among themselves to resubdivide their land and property. The Council believes the proposed regulations for urban land readjustment will have insufficient additional benefit due to their voluntary nature, and so they can be scrapped.
  6. Expand and simplify the possibilities for cost recovery
    The Council puts forward a number of proposals for simplifying the procedures for recovering the costs of land development from the financial beneficiaries. Moreover, the Council does not support the proposal in the Supplementary Act giving municipal councils the option of waiving cost recovery.
  7. Broaden the business case
    Sitting owners and neighbouring residents and businesses who profit from new developments are not required to make a payment towards the development costs. The Council thinks this is unreasonable and argues for a value capturing regulation to permit the imposition of a tax on future value increases resulting from public decisions or actions.
  8. Provide instruments for regional cooperation and redistribution of development gains
    Many development programmes are regional in scale. Mechanisms for redistributing development gains at the regional level, such as from suburban municipalities to a central city in a metropolitan region, have proved to be very tricky in practice. The Council therefore argues for a statutory regulation for redistributing development gains between municipalities that work together on a regional development programme.

Judicious incorporation of the recommendations in the wording of the Act will probably take more time than allowed for in the current procedure. The Council therefore believes that serious thought should be given to postponing the introduction of the Supplementary Act by one or two years. The Council also points out the need to carefully consider how best to implement the new legislation.

Publication

The Council presented its advisory report ‘Land for Development’ to the minister of infrastructure and the environment, Melanie Schultz van Haegen, on 22 June 2017.

More information

For further information on the Council’s advice, please contact Tim Zwanikken: tel. +31 6 52874404./ email. tim.zwanikken@rli.nl.