Is large scale development really a panacea for developers?

Does the Coalition’s attempts to breathe life into the idea of creating new settlements have the ability to save the housebuilding and development industry? This is the question I’ve been asking over the last week, after digging in to the little-noticed surprise inclusion of a section on “Large Scale Development” in last autumn’s housing strategy.

The government is planning to publish a prospectus in the next couple of months for councils and developers that, working in partnership, want to bring forward plans for major urban extensions or new communities to express their interest.

Certainly it sounds encouraging. It’s nice to know that the localism agenda and government spending cuts, haven’t together completely ruled out the idea of strategic planning for a generation.

Done properly, planned new communities, such as the garden cities, can enable the construction of places with the whole gamut of services and infrastructure, built to a standard impossible to achieve with the limited resources available to in-fill developments.

But forgive me for being sceptical. The industry has long experience of government initiative following government initiative in this area – only for little concrete action to result. The communities department thinks it can avoid the pitfalls of Gordon Brown’s eco-towns programme with this initiative, by making sure the schemes have local council support.

That is indeed helpful, but it doesn’t mean by any sense that these schemes, even when identified, will be able to go ahead. Council support doesn’t mean there won’t be strong objection from the development’s more immediate neighbourhood. And it doesn’t tackle the primary problem with these schemes in the current economic climate – that of short-term viability.

Yes these schemes have the potential to make both great places and enormous pots of cash for either public or private investors – like the new towns did - but the returns only come in the long term. Most need a hefty subsidy in the early years, in order to pay for the up-front infrastructure costs. In the current environment those investors are hard to come by.

So, if I was a housebuilder I wouldn’t be betting much on this strategy right now. Welcome as the initiative is, it’ll need real high-level focus to make it actually fly, and make a real contribution to the housing crisis we’re all facing.

And hands up who expects senior ministers to associate themselves with this push, after seeing what happened with Gordon Brown and his eco-towns. We could be waiting a while.