A land value tax should pay for London's new Garden Bridge

The proposed garden bridge. Image: Heatherwick Studios.

By 2018, you should be able to leave London’s Garden Bridge to the north onto Arundel Street. As you leave behind the tourists having a nice day out, or turn away disappointed because the bridge is closed for a private corporate event, you should remember that the biggest winners from the £60m of public funding will be the developers and owners of places like the brand new Arundel Great Court.

This £351m development will feature a new five-star hotel and 151 luxury flats, and could be completed around the same time as the bridge. In their summary of the business case for the Garden Bridge, Transport for London (TfL) notes that projects of this kind usually make the local area more desirable, and so drive up land and property values. TfL estimates that the value of the Arundel Great Court development could rise by 5 per cent if it’s built.

Consider, too, all the people who already own land in property in the area. They should be able to charge even higher rents to tenants, and command a higher price if they choose to sell their office space or flat, all without lifting a finger.

TfL reckon the total one-off uplift in land and property values for businesses and residents brought about by the new bridge will be in the order of £84m. That’s more than the public money that TfL and the Treasury are contributing. Their £60m, drawn from transport budgets, will help a charitable trust build a bridge with little transport value and no public right of way, and which results in a £84m windfall to private interests.

(As an aside, in the midst of a desperate housing crisis, on page 97 of this document, TfL describes this windfall to wealthy land and property owners as a “large positive”. They add this windfall to the positives in their cost-benefit analysis. Given the mayor’s declared concern about high house prices, shouldn’t his transport agency be looking at rising land and property prices as a negative?)


Why can’t the Mayor capture this windfall gain to offset the public subsidy for the bridge? TfL hope to use planning obligations on new development to capture some of it – but that won’t go very far.

City Hall and TfL have been looking at Tax Increment Financing for regeneration in nearby Vauxhall and Nine Elms. This mechanism enables them to borrow money from the government to invest in regeneration: once the scheme is completed, it will result in greater tax revenues, which the government can use to paying off the borrowing. There’s no suggestion of that being used here.

But there is another option: land value tax. If the mayor would back those campaigners calling for such a tax, he could use it to capture much more of the gain, potentially even reclaiming the £60m in full.

One simple way to do this would be to tax all land owners based on the rental income from their land, as used to happen. If the land owner is occupying, not renting, the space (as with a home owner for example), you can instead tax the “imputed rent”: that is, the amount they could theoretically charge if they did let it out.

Because the bridge will increase its neighbours’ potential rents then, were such a scheme to be implemented, they would have to pay more in tax. In return for the taxpayer’s contribution to the construction of a fancy new bridge on their doorstep, they would have to chip a little more back into the public purse.

A land value tax wouldn’t only help TfL finance this scheme. It could also act as a disincentive to investors looking to speculate on land and property, and encourage investors hoarding development sites to get on and build something. This could all help stabilise or even reduce house prices in an area of London where they are beyond ridiculous.

City Hall could use the revenue to build more social housing along the South Bank, or to build a much more useful pedestrian and cycling bridge from Canary Wharf to Surrey Quays, where a new crossing is actually needed.

If the mayor’s principal aim is to build his legacy, TfL’s plans will probably do the trick. But if he wants to build a better transport network and a more affordable city, he should seriously consider backing the campaign for a land value tax.

 
 
 
 

London Overground is experimenting with telling passengers which bits of the next train is busiest

There must be a better way than this: Tokyo during a 1972 rail strike. Image: Getty.

One of the most fun things to do, for those who enjoy claustrophobia and other people’s body odour, is to attempt to use a mass transit system at rush hour.

Travelling on the Central line at 6pm, for example, gives you all sorts of exciting opportunities to share a single square inch of floor space with a fellow passenger, all the while becoming intimately familiar with any personal hygiene problems they may happen to have. On some, particularly lovely days you might find you don’t even get to do this for ages, but first have to spend some exciting time enjoying it as a spectator sport, before actually being able to pack yourself into one unoccupied cranny of a train.

But fear not! Transport for London has come up with a plan: telling passengers which bits of the train have the most space on them.

Here’s the science part. Many trains include automatic train weighing systems, which do exactly what the name suggests: monitoring the downward force on any individual wheel axis in real time. The data thus gathered is used mostly to optimise the braking.

But it also serves as a good proxy for how crowded a particular carriage is. All TfL are doing here is translating that into real time information visible to passengers. It’s using the standard, traffic light colour system: green means go, yellow means “hmm, maybe not”, red means “oh dear god, no, no, no”. 

All this will, hopefully, encourage some to move down the platform to where the train is less crowded, spreading the load and reducing the number of passengers who find themselves becoming overly familiar with a total stranger’s armpit.

The system is not unique, even in London: trains on the Thameslink route, a heavy-rail line which runs north/south across town (past CityMetric towers!) has a similar system visible to passengers on board. And so far it’s only a trial, at a single station, Shoreditch High Street.

But you can, if you’re so minded, watch the information update every few seconds or so here.

Can’t see why you would, but I can’t see why I would either, and that hasn’t stopped me spending much of the day watching it, so, knock yourselves out.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

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