Infrastructure and Related Urban Policy Interventions

The discussion so far has focussed on regulatory planning requirements and their potential impacts on the land and housing market. However, the effects of regulatory planning on the demand or supply of housing, are often outweighed by the wider urban system. This includes pre-existing regional infrastructure and patterns of economic and employment concentration, as well as wider urban policy decisions which also shape the trajectory of metropolitan and regional growth and change. An example of the former kind is the situation of ‘world cities’ like London, which have a high concentration of infrastructure (e.g. most of the UK’s electrified rail lines radiate from London) and which display a higher level of economic dynamism than the rest of the country, leading to an ever-more overheated regional housing market.

There is a stream of literature which examines the localised price effects of particular urban policy interventions, such as the announcement of a new rail line, amenities, such as open space, and facilities like schools (Clapp, Nanda, & Ross, 2008; Gibbons & Machin, 2008). Other studies price dis-amenity effects of infrastructure siting, such as waste facilities or freeways (Farber, 1998). Whilst it is important that the housing implications of these urban policy decisions be properly understood, it is difficult to generalise about these processes which vary between jurisdictions, with some jurisdictions ensuring that infrastructure decisions follow projected housing trends and requirements, and others allowing infrastructure decisions to shape urban outcomes, as discussed later in this book with reference to the case of Hong Kong.

One insight from this literature is the potential catalysing effects of infrastructure investment for failing housing markets. This presents a dilemma whereby interventions to make inaccessible, lower-priced locations more accessible, can also have the effect of pricing out lower-income renters, unless mechanisms for maintaining the supply of affordable housing are embedded in the development process. For these reasons, approaches which seek to ‘capture’ some of the increased value associated with public investment, are important considerations. These approaches are outlined in general terms in Table 4.2 and considered again in greater length in Chaps. 10 and 11 of this book.

Table 4.2 Offsetting cost and supply impacts of planning requirements

Planning requirement/ constraint

Techniques for offsetting impacts on the cost of housing production

Urban growth boundary

Plentiful land for housing development/higher density development within boundary




Clarity in requirements, codification (automatic approval for 'complying' proposals), alternative development opportunities provided elsewhere within locality

Impact fees/ development contributions

Certainty, consistency in application, proportionality, demonstrable benefit provided, non-distortionary mechanism for 'value capture'—that is, capturing a portion of land value uplift arising from a planning decision or public investment (e.g. infrastructure investment)

Local resident opposition to change ('NIMBYISM')

'Up front' planning, codification of simple development forms, no third party appeals, depoliticised decision-making

Slow decision times/ process inefficiency

Pre-application meetings, automatic approvals, codification

Source: The authors, adapted from Gurran et al. (2009)

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