Compulsory Sale Orders – adding to the regeneration toolbox

Earlier this year, I blogged about how the Scottish Land Commission was developing proposals for the potential introduction of a Compulsory Sale Order. Here I also discussed why we need such a power. We have now published a detailed proposal informed by comprehensive discussions with a wide range of experts and organisations that have experience ranging from regeneration, housing, valuation and human rights.

The problem

Vacant and derelict land and buildings present real challenges for communities across Scotland. The quality of life for existing residents can be damaged. There are 11,600 hectares of vacant and derelict land in Scotland (an area almost twice the size of the City of Dundee) and with more than 37,000 long-term empty homes in the country.

Often smaller areas of vacant and derelict land or buildings in built up areas in particular, can make it more difficult to meet community needs especially where affordable housing, urban green space or cultural facilities needs are great. They can act as a deterrent for investment which can hold back regeneration.

In the current regeneration toolbox, Scotland has mechanisms that allow planning authorities and communities to buy such sites. However what happens when neither have a specific end use in mind for problematic sites? What if the authority or community body hasn’t got the capacity or resources to take on the site themselves? Seeing such sites being put into some kind of productive use that will benefit the local community is often desirable but the current tools available might not always be appropriate.

Transfer and transform

The Compulsory Sales Order (CSO) would offer an additional way for planning authorities to deal with such eyesore sites. By enabling a transfer of ownership, these sites could be transformed. This is backed up by research evidence which suggests that a change in ownership that transfers a property from a passive to an active owner is often a necessary pre-condition for bringing vacant and derelict sites back into productive use.
A CSO power would offer a planning authority (on a case-by-case basis) the chance to:

  • firstly, investigate a site. This would be very important step because it provides an opportunity to bring about a mutually acceptable resolution between the authority and the owner. This step must be taken before a formal order could be issued, demanding the sale of the property via an auction. A CSOs is not intended to be a punitive instrument it can help facilitate a constructive dialogue with owners of problematic sites, arguably one of its strengths.
  • provide a more reliable measure for valuing vacant and derelict urban sites. An auction is an efficient way for revealing the true market price of a site at any given point in time, especially when they are difficult to value or estimate as there may be no accurate comparisons.
  • commit a new owner to bringing the property into a productive use. Conditions attached to the sale would mean that new owners are required to complete the development and bring the site into a productive use within a fixed period of time.

Let me illustrate this with some examples, which may be all too familiar..

The abandoned gap site

Take, for example, an abandoned and neglected gap site which has been in this state for several years. Even though planning permission was granted a few years ago, nothing has been done with it.  There’s litter and overgrown trees which are blocking out the light for nearby residents. This is having a negative impact on the wellbeing of the community and compromising the quality of life of nearby residents. No one within the community has any particular desire to take ownership of the site but people are keen for action to be taken to improve its physical appearance.
What are the reasons preventing the site being brought into productive use? A preliminary investigation for a CSO could help identify these and potentially even help bring about a mutually acceptable resolution, or ultimately issuing a CSO could result in ownership being transferred to a more active and responsible owner. A CSO could therefore be an effective tool for improving the site and bringing it back into productive use in the interest of the public.

 

The derelict hotel

There’s also the example of an unloved and derelict hotel which may not be an uncommon sight in town centres of smaller rural towns. It’s been neglected for a long period of time and is an eyesore. It’s also a danger to the public and building standards notices have been issued to the owner- a company that is difficult to contact and isn’t doing anything to improve the situation.
Yes, the right to buy legislation could potentially be a route for bringing this site back into productive use, however taking on such a site by a community body may be complex and technically challenging. Equally, compulsory purchase could be an option for the local authority yet resource constraints mean that, unless the physical condition of the building becomes a serious danger to public health, it’s unlikely that the authority would compulsorily buy the site. There is therefore currently no realistic prospect of the site being brought back into productive use.

 

Empty homes

There is a strong appetite to use CSOs to help address the problem of empty homes and the harm that these may cause not only to housing supply but also physically, to the community.
A useful example comes from the south west of Scotland where in the early 2000s a resident of a small market town purchased a flat in the centre of the village to live in.  The owner continued to buy the neighbouring flat and the commercial premises on the ground floor, eventually owning the entire property.  The owner moved away and the property has been empty for the last 15 years and the physical condition of the property has deteriorated significantly. It’s now in an extremely poor state of repair.  A recent valuation estimated the current market value at far less than the original price that the owner originally invested.
The local authority is very keen to bring it back into productive use to help address a chronic shortage of affordable housing in the area. They’ve offered to purchase the property for a price significantly above the current market value but the owner is unwilling to sell because the price offered is still considerably below what he originally invested in the property. There is currently no prospect of the property being brought voluntarily to market. Compulsory purchase is also currently not an option as the authority doesn’t have the budget or a development partner.  This means that there is currently no mechanism that the authority can use to bring the property back into productive use. Here a CSO could offer a way forward in developing the site and making it productive again.

Our proposal includes several more real life examples to help create a picture where a CSO may or actually MAY NOT be the best tool to use for dealing with a particular site. It is important to view the CSO not as a silver bullet but potentially a powerful additional instrument for urban renewal in Scotland.

Read the full proposal here.

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