A financing model that successfully funded the Northern Line extension to Battersea could be adapted to drive economic growth and boost housing development, according to a new report by campaign group BusinessLDN and consultancy WSP.The report highlights a transformative approach that could generate up to £4.5bn over 25 years, unlocking land for more than 100,000 new homes and creating over 10,000 jobs.Reports Contract Journal
Titled Generating Land Value to Grow London: A New Residential Funding Approach, the report proposes an evolved version of the tax increment financing (TIF) model.
This approach would enable local governments to secure funding by borrowing against future increases in stamp duty and council tax revenue generated by new housing developments made possible through transport improvements.
The Residential TIF model could play a key role in funding three priority Transport for London (TfL) projects while supporting the delivery of 100,000 new homes:
- Docklands Light Railway extension to Thamesmead
- Bakerloo Line extension to Lewisham
- West London Orbital extension to the Overground network
John Dickie, chief executive at BusinessLDN, said: “Against a backdrop of stretched public finances, the Government needs to consider innovative approaches to get shovels in the ground.
“Letting local government borrow against future tax revenues to fund infrastructure investment is a common-sense way of supporting growth.”
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