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Learning Point 97Investment Inputs: Citizens, Developers and the State

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INTRODUCTION

WHAT ARE LEARNING POINTS?

Learning points share what people have learned from their experience in regeneration - from people working or talking together, or from research into issues and evaluation of what is happening. Learning points can help people and organisations to improve their practice through identifying what works and what doesn’t.The views described in learning points do not mean that the Scottish Centre for Regeneration (SCR) or the Scottish Government necessarily support them. They simply reflect what has been debated and what those involved in the event considered useful learning and lessons from their perspectives.WHAT IS THIS LEARNING POINT ABOUT?

This Learning Point captures the key points from the presentation given at the Design Skills Symposium in Stirling on 27 September 2011 by Steven Tolson. Steven is a Chartered Surveyor and Director of Ogilvie Group Developments. He has wide experience of property and regeneration matters from working on a variety of projects throughout Scotland and other parts of the UK.

Image: Citizens, developers and the state are the 3 main investors in a place.

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INTRODUCTION

‘Too much development in Scotland is a missed opportunity and of mediocre or indifferent quality’ (Council of Economic Advisers, 2008)

Development is the creation and management of an asset, not just the creation of a ‘building’ or ‘buildings’. The process of place-making needs a place promoter, who breeds confidence, drives the project and fosters a place-making culture.

Citizens, developers and the state are the 3 main investors in a place.

1. The Place Promoter

Region Whole settlement District

Block / Street Plot

Image: The Council of Economic Advisers with the First Minister Alex Salmond in 2009.

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2. Citizens

Citizens are long-term investors in a place through buying into it, and investing in it by living there. Most citizens will value comfort, convenience and familiarity. So developers generally build to this – providing the standard, low-risk, easily built model that we see everywhere.

Developers are short-term investors. Most developers do not value ‘good design’ as for them it only has appeal to the subordinate group of consumers, and is more risky, more expensive, and more difficult to build. Specialist developers will build for the ‘subordinate’ groups. Such developers are more likely to come up with solutions for non-standard urban sites, but will probably only be able to build to a smaller scale. Public procurement procedures unfortunately favour the bigger, standard developer who have bigger balance sheets and can complete the bureaucracy more easily.

Every property has two elements to its value – the investment value of the property/development, and the degree to which the occupier values it, based on how much it meets the occupier’s needs. Most people value ‘comfort, convenience and familiarity’, they do not value good design. Design only creates higher values if a valuer is confident that they will get their money back – or if there are features which will save owners money e.g. low-energy features.

Good value can accrue to a property, for instance through reputation, but time is needed for this, and long-term consistent maintenance.

Image: Tolson argues that it is the consumer who values new development and therefore developers will generally build to the specification that the mass consumer deems to be of value.

As the public sector takes a lesser role in this now, good maintenance can be a problem for multi-developer (multi-owner) sites, as it is dependent on lots of self-help, and ‘self-help’ is not ‘convenient’ to occupiers.

3. Developers

Image: Steven Tolson suggests that Ijburg in Amsterdam, which is often cited as an exemplar to sustainable placemaking, isn’t all outstanding architecture ‘but it doesn’t matter’.

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The state is a long-term investor - through the initial servicing of site, the creation of infrastructure, and through responsibilities for maintenance and for revenue collection.

Good development practice in Europe, as documented in the 2011 Scottish Government publication Designing Better Places, has 6 key lessons for development in the UK

1. The state takes a more active role – to put in the infrastructure, to provide the place-

leadership and provide the masterplan that sets out the role for the other players. The public sector still has access to funds, although they tend to be risk-averse.

2. Planners are more respected and have a place at the development ‘top table’

3. A wider variety of developers are involved, achieving a greater variety in the development. Having a number of

developers involved speeds up the process and also makes developers try harder. Amongst this mix of developers can be individuals building their own houses.

4. Good design can achieve familiarity (for example the new streets in Ijburg whose form and layout recalls traditional Amsterdam streets)

5. The multi-developer model (see below)

4. The State

Image: Hamilton-Baillie suggests that the apparent chaos and unpredicabilty of movement of skaters on an ice-rink provides is an appropriate metaphor for the behavior of motorists and pedestrians who flow through shared spaces

Key LessonsGood development needs –

• Creative informed leaders• Joined up planning policies, and the

relaxation of out-dated rules like the 18m ‘overlook’ regulation

• Place-makers with economic skills and knowledge of delivery

• The public sector to take on a greater role, and to focus on development as the creation of long-term asset

• Less talk about style and more about people

• All players learning to take more risk.

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Scottish Government Architecture & Place Division

This document is published by the Scottish Government. If you would like to find out more about this publication, please contact Geraldine McAteer in the Architecture and Place Division of the Scottish Government.

Scottish Government APD. Area 2 J South, Victoria Quay, Edinburgh. EH6 6QQ

T: 0131 244 0548E: geraldine.mcateer@scotland.gsi.gov.uk

www.scotland.gov.uk

The views expressed in this Learning Point are not necessarily shared by the Scottish Government.