Thursday 19 June 2014

Wolfson Prize - Garden Cities and our contribution

Our continued congratulation to the organisers of this years Wolfson Prize which is focusing on garden cities. The short list to the competition has just been announced. We were pleased to have met with some of those on the short list and with others who also put on entries.

Our entry was produced by Philip Ross and Patricia Nevins with contributions from Prof. Michael Maineilli, Chiara Von Gunten, Abigail Shemoel, Prof. Yves Cabannes, Prof. Austin Smyth and Dr. Mike Page.

Details of the paper put together by Prof. Michael Mainelli and Chiara Von Gunten on policy performance bonds, a land value tax and garden city coins can be found here on the Long Finance website.

We took the garden city principles and governance and applied to other financial models for raising finance. We know other models were looking at Community Land Banks and Community Land Trusts of which we are in favour, our local looked in more detail at the idea of implementing a land value tax. We combine it too with ideas of policy performance bonds and use bit-coin technology to create a garden city currency.

The summary is below and the main document can be downloaded here or by clicking on the image.
To purchase a printed copy click here

We are happy to share these ideas with any of the successfully shortlisted groups.

Wolfson Prize Entry - Summary

Our vision is of a Garden City that is economically innovative, environmentally secure and socially sustainable. It will deploy the finest urban design techniques to deliver a New Garden City that is built on enduring social values and principles that Ebenezer Howard would have been at home with. Just as they were in Letchworth, the architecture and urban design will reflect and enhance those values just as the governance and economic model will. Our vision of a Garden City is a city for all that is in harmony with its residents, its neighbours and the environment, not a gated community.

The core design and social principles will be defined in the founding documents as a Constitution and will cascade down into the bodies assembling, developing and managing the city and its estate. The Constitution will guarantee that the new city is not being developed for private gain by distant landlords or speculators but rather for the people that will live in it including existing local communities that it will join with.

The Garden City will adopt the 12 principles proposed by Prof. Yves Cabannes (Urban planning expert[1]) and Philip Ross (former Mayor or Letchworth, a 110 year old and successful Garden City) in their book ‘21st Century Garden Cities of To-morrow’[2]. These twelve principles have also been presented to other cities, including both Chengdu and Beijing, [3] at the World Habitat Forum[4] and are being referenced by the United Nations in their recommendations for communal housing.

The Garden City will also endorse the idea proposed by current Lord Mayor of the City of London - Fiona Woolf - of an ‘open-data’ city, that is a city that shares both its wealth and prosperity for the common good and also the data related to buildings, industry and commerce to help drive that prosperity.
A strong sense of citizenship and belonging will be encouraged from the start by ensuring true participation in the planning, design and management processes through the use of charrettes[5] and participatory budgeting. The principles of carbon neutrality and energy efficiency will influence both the design and materials used for its development. The need to provide access to land for living and working, could include the ability for the city to feed itself through urban agriculture.  

The first phase will be to develop the master plan, raise funds and win planning permission. Funds could come from the Treasury, individuals, a public bond offering and philanthropic capital. A New Garden City Company (NGCC) will develop the city and be run by a New Settlement Partnership[6] comprising of local authorities, shareholders, local land owners and developers working together on a common cause. The company will hold the freehold for the estate and will provide 999 year leases. A New Garden City Community Land Trust (CLT) will initially be endowed with leases for portions of land by the NGCC like for the Milton Keynes Parts Trust. It will focus on perpetual affordable housing and community structures. The rest of the land will be available to developers and individuals to develop according to the Master Plan. The lease will provide the lever for the implementation of a land value tax (LVT). The ability for speculators to hold neighbouring plots of land to gain unearned increment from infrastructure projects will be unfeasible as land will be taxed according to its new value. The CLT and LVT will ensure that prosperity through rising land values is captured for the good of the local community rather than distant recipients. Prosperity should be safeguarded by the GC principles of participation and democratic governance in order to maintain accountability, scrutiny and popularity.

In order to prove that long-term policies are stable enough for investment the NGCC will use policy performance bonds[7] to provide a hedge against policy risk, namely the issuing country’s government or local authority not delivering on its commitments or targets.  Government could issue such a bond for the initial land purchase, equally indicating that the bond will pay higher interest rates if the city is not as successful as planned.  Developers can use it to hedge their confidence in the NGCC and it receiving central government support. Secondly, the NGCC could issue bonds relating to specific projects or targets, e.g. completion date of a rail station or airport, level of renewable energy or educational achievement.

An alternative local currency called Garden City Coins (GCC) will ensure that the Garden City can retain and generate local credit. This will emulate the successful Swiss WIR but will use modern AltCoin[8] technology and could be used for B2B, C2C, C2B transactions. If the NGCC takes GCC’s in full or partial payment for LVT, then the currency would be ‘backed’ by genuinely valuable credit created by the city.
Taken as a whole, these three mechanisms would provide a unifying structure to the economics of the New Garden City.  Being equitable across ‘space’, the LVT brings taxation to bear on the right areas, encourages sustainability and efficient use of land, and frees land over time for reallocation Being equitable across ‘time’, policy performance bonds allow investors to hedge their risk of policy change, thus allowing them to commit fully to projects.  Finally, the GCC provides a mechanism for local credit creation, combined with a sense of community favoring local economic development.  Ultimately, the economic ‘health’ of the community can be assessed by the confidence placed in the GCC.

We propose an ‘open-data’ Garden City that is community owned and uses three innovative economic measures to drive growth. These are underpinned by a Constitution for the City based on the 12 principles mentioned above. Taken together, this would work to make the Garden City economically, environmentally and socially sustainable so that all will be able to share, enjoy and prosper in the New Garden City as it grows and develops.

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