Planning Gain, Exactions, and Impact Fees: A Comparative Study of Planning Law in England, Wales and the United States
The Urban Lawyer, Vol. 32, No. 1, 2000
52 Pages Posted: 11 Oct 2010
Date Written: 2000
Land development projects often involve external costs within the host community. For example, new retail space might generate more traffic, requiring improvements to roads. A new residential development might require new roads altogether as well as enhancements to police and fire services, schools, libraries and even sewers. Historically, these external costs fell on the community. However, increasingly, in both the United States and in England and Wales private land developers, rather than public agencies, are bearing these externalities. This article explores the issues that arise when governments shift the burden of these externalities back on the developer and compares the processes by which the United States and England and Wales have attempted to accomplish this shift in externalities. U.S. jurisdictions use exactions, impact fees and linkage fees to transfer the burden of adverse development impacts to the developer. England and Wales use the concept of planning gain to extract planning conditions or planning obligations from developers before granting development rights. Because of the high level of government involvement in this process of accounting for development externalities, public and private abuse is a concern in the U.S. and in England and Wales.
Part II of this Article identifies the different impacts that occur during land development, including the impacts on municipalities, their citizens, competing developers, competing communities and the environment. Part III compares how development rights are obtained in the U.S. with the approaches used in England and Wales to obtain planning permission and discusses how the respective countries compel developers to internalize the external costs of development. Part IV concludes by proposing the developers and local government use bargaining tools, such as the U.S. development agreements and the section 106 agreements in England and Wales, to distribute development burdens. Further, private and public abuses should be controlled by the market and the requirements that the government act for the benefit of the public, rather than be constrained by existing judicial, legislative and constitutional complexities.
Keywords: England, Wales, development, real estate, commercial property, comparative law, England, impact fees, linkage fees, planning gain, planning conditions, planning obligations, development agreements, section 106 agreements
JEL Classification: K11, K32
Suggested Citation: Suggested Citation