Behavioural insights research at the University of Liverpool has reformed three key policy areas on the financial and in-kind investments that accompany real estate development in England, known as ‘developer contributions’. These reforms have changed planning practice, resulting in economic, social and environmental benefits for local authorities and a fairer distribution of investment across England.
Issue
The research represents theoretical and conceptual advances using behavioural economics and game theory to better understand the state-civil-market relationships that come together in the real estate development process.
Approach
At the core of this work are two consecutive large ESRC grant awards made through the Joint Programming Initiative which enabled international collaboration with partners from France, Belgium, the Netherlands, Norway and China. This research has allowed for significant advances in the underlying theory and concepts to the point where empirical application became viable.
A suite of projects followed these academic advances as the worlds of policy and practice came to value the behavioural insights approach to planning and real estate economics that had been pioneered at Liverpool.
Impact
Insights from the research have been pivotal in instigating a change to the system by which local authorities secure developer contributions.
The work was published on the same day (5 March 2019) that the then Prime Minister, Theresa May, launched a consultation on the overhaul of the English planning system at the national planning conference. The legislation and policy guidance reforms were influenced by earlier work led by academics at Liverpool.
These reforms have changed planning practice, resulting in economic, social and environmental benefits for local authorities and a fairer distribution of investment across England. Communities are benefitting through increased investment in local infrastructure such as affordable housing, transport, and schools:
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An additional £1,000,000,000 in developer contributions made to local authorities between 2016-17 and 2018-19.
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Investment distributed more fairly across England – the share of total investment has doubled in the North West and East Midlands.
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Developers responding to reforms. For example, Liverpool-based housing association to build 1,000 new affordable extra-care homes for vulnerable older people.
More information
Institution: University of Liverpool
Researchers: Professor Alexander Lord, Dr Richard Dunning, Dr Yiquan Gu