Brownfields can be more costly to build on and sometimes fail to provide the kind of housing needed. Occasionally, however, they provide a good return on investment.
Brownfield development has been trumpeted as the perfect solution to the UK’s housing needs and a means to contain sprawl that threatens the countryside. So why have the country’s homebuilders delivered so little on these sites?
Since 1998, the Government’s target was for 60 per cent of all new residential developments to be built on brownfield land. A 2006 statement, Planning Policy Statement 3 (PPS3), reiterated that goal, with renewed pressure on local planning authorities to actively incorporate brownfields into local plans. By 2008, the Department for Communities and Local Government called for a National Brownfield Strategy in a report (“Securing the Future Supply of Brownfield Land”) that outlined ways to remove regulatory obstacles as well as to encourage non-residential development of some brownfields (e.g., use the land for green spaces, nature conservation and flood mitigation, but not homes). While more of a concept than law, developers and planning authorities alike regarded it as an established target.
Some brownfield sites are in development on a significant scale. The Avonmouth and Severnside development in the Bristol City region, largely a job-producing enterprise area with some residences, is said to be the largest brownfield development in Western Europe. At Bishopton in Renfrewshire, west of Glasgow, a 1000-hectare site that formerly contained the Royal Ordnance factory is proposed for redevelopment with 2,500 homes. Eric Pickles, Secretary of State for Communities and Local Government, believes there is collectively 5,000 hectares of brownfield property on which 200,000 homes could be built.
Yet, brownfield lands have not had a crush of development in this time. This is due in part to the recession that began in late 2007. Since then, a credit crisis has gripped much of the country, disallowing younger people to get loans to purchase homes (subsequently addressed by various government schemes, such as the Help- to-Buy programme).
But other factors have gotten in the way as well. According to an overview of the National Brownfield Strategy published by Politics.co.UK, these include:
• Brownfields take too much time. The 2011 draft of the National Planning Policy Framework, which simplified planning processes with the goal of speeding up housing development, was viewed by environmental and conservation groups as de-prioritising brownfield development in order to achieve faster growth.
• Brownfield costs are prohibitive. Development on brownfield sites are almost always more expensive. The sites very often require remediation due to toxins or other contaminants, and existing buildings sometimes require demolition.
• Brownfield red tape. Site preparation not only costs money but also time in obtaining necessary permissions.
• Brownfields limited to lower-price housing. The types of residences that result are more often high-rise apartments than pricier single-family housing. In some areas, that fails to satisfy market demands.
• Brownfields may be in flood zones. Some brownfields fail to satisfy Planning Policy Statement 25, which limits building in flood-prone areas. Given the predictions for increased flood risk in the coming decades, this is a very real consideration.
It takes skilled real estate specialists to identify where barriers can be overcome and where the market demand for housing is great enough to overcome the obstacles. Non-specialists with cash to invest should speak with an independent financial advisor to help sort through these questions.