Taxes, subsidies and the behaviour of brownfield owners

This paper addresses two key research questions. First, how effective are fiscal measures in stimulating brownfield land regeneration? Second, what is the most effective fiscal measure: taxes or subsidies? The paper considers the results of a three-year study of land ownership constraints which was funded by the ESRC and completed in 1998. The research considered 20 development sites in each of four UK cities; Nottingham, Stoke, Aberdeen and Dundee. In the course of the study, 140 landowners were interviewed in order to ascertain their strategies, interests and actions in the development process. Detailed contextual interviews were also held with 36 organisations with valuable experience of planning and development at national or local level. The research revealed that brownfield redevelopment is increasingly driven by the availability of development grants and subsidies. The development prospects of 21 of the 80 research sites hinged on the availability of such development grants or subsidies. The paper considers a number of fiscal alternatives and concludes that both grants and fiscal penalties may be appropriate but that urban regeneration policy needs to be sufficiently fine grained to reflect differences in demand between localities.