Labour would give councils powers to designate “housing growth areas”, in which they would have powers to “assemble” land to be used specifically for house building.
This is among recommendations in the review of housing policy carried out for the party by former Birmingham City Council chief executive Sir Michael Lyons (pictured).
Councils would also be required to produce plans for home building with sufficient land allocated to meet need.
Planning inspectors would be able to intervene where councils failed to produce a plan or designated too little land.
Labour also proposed that councils could reserve for two months a proportion of new homes in these growth areas for first-time buyers, and prevent their use as buy-to-lets.
Sir Michael’s report Mobilising across the nation to build the homes our children need also proposed powers for groups of local authorities to form “new homes corporations” to develop land rapidly, and financial incentives to deliver garden cities and suburbs.
Party leader Ed Miliband told the report’s launch meeting: “There has been a systematic failure to build the homes our country needs. Too much development land is held as a speculative investment when local people need homes.
“We will get Britain building again by insisting local authorities have a plan to meet the need for housing in their area – and that the big developers play their part rather than hold land back.”
Sir Michael said he had set out “a comprehensive plan to tackle the key problems that underpin our failure to build enough homes”.
The housing growth areas would work through partnerships of local authorities and developers using the rising land values resulting from development to invest in the upfront provision of infrastructure. Councils would seek a lead partner through a competitive process to develop the site.
Councils would take the lead role in land assembly, where a lengthy process of acquiring sites in multiple ownership would be needed, and in securing the delivery and quality of projects through masterplanning and packaging sites.
Once a growth area was designated, landowners would be asked either to sell their land to the council or contribute it as an equity stake in a joint development venture.
Landowners who sold would be offered the land’s current use value plus compensation.
To prevent obstruction by them, councils would gain stronger compulsory purchase order (CPO) powers as “an important tool in this process acting as an incentive to landowners to enter into partnership at an early stage in contract with the authority”, the report said.
It added: “It is envisaged that these CPO powers would seldom be used in practice since all parties would wish to avoid the process where possible and landowners facing the possibility of a CPO would be incentivised to engage in a partnership with the developer.”
Where more than one council wanted to form a growth area this could be done through a new homes corporation, for sites of 500 or more homes.
Unlike earlier generations of development corporations these would need government designation but be responsible to local authorities, not Whitehall.
They would agree 10-year contracts to deliver homes over and above those that would anyway be built, with a particular focus on stalled sites.
Stewart Baseley, executive chairman of the Home Builders Federation, said: “We welcome the commitment by Labour to increase housing supply.
“Policies that would result in more land coming forward for development more quickly and further assist first time buyers would clearly provide a boost to housing supply.”