The aim of this book is to challenge the dominance of the paradigm of growth-dependent planning and suggest, not necessarily a replacement, but an alternative approach that may be more appropriate in certain localities and at certain times. But before this alternative is mapped out, we need to understand the current paradigm and its limitations more fully. This chapter explores the paradigm of growth-dependent planning. The subsequent two chapters then derive a critique looking, first, in Chapter 4 at the important underlying economic assumptions of the paradigm and, then, in Chapter 5 at the social and environmental consequences of relying on growth dependence.

The argument for growth-dependent planning comprises two elements. First, there is the assumption that attracting investment in new development is, in itself, of benefit to the locality and the local community. Second, there is the emphasis on the potential for the development to generate funding for other side-benefits for the community, commonly known as planning gain. This chapter develops these arguments, but first it provides a summary account of the economic model of urban development underpinning the paradigm.

The economic model underpinning growth-dependent planning

Behind the paradigm of growth-dependent planning lies a particular view of urban change rooted in neo-classical economics. Here urban change is a response to the prices set by land and property markets and, in particular, developers respond to the gap between the price of a site in its existing use and the potential price if developed for a new use.

This can be illustrated most readily by considering the pressures for greenfield development. Agricultural land prices in June 2010 were in the order of £15,400 per hectare for England; the price of residential development land for July 2010 was £1.75 million for England excluding London. This price for housebuilding land is largely determined by the price of new housing, itself influenced by a variety of factors including demographic change, wage levels and the availability of mortgage lending. Even allowing for the different location of agricultural and development land, the gap between agricultural and residential development land prices is considerably larger than the costs of turning farmland into a housing estate, and thus acts as a continuous pressure for agricultural land to be developed for housing.