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Do developer obligations stimulate or stifle housing supply? The case of community infrastructure Levy in England

Year: 2026
Type: article
Abstract: Housing development should be complemented with new and/or improved local infrastructure, requiring a delicate balancing act by local authorities so that the cost of providing such infrastructure does not stifle housing supply. Standard land value capture tools can exacerbate housing supply constraints when their design, implementation and synergies with other policy tools are lacking. There is a notable gap in the literature studying the impact of land value capture tools on housing supply. To address this gap, we analyse the effects of the land value capture tool, Community Infrastructure Levy (CIL), in England. As housing supply, land value capture tools and affordable housing provision are interrelated, modelling their relationship requires careful consideration of endogeneity, which we address in our models by specifying a dynamic panel estimator. Our findings show a price-inelastic supply in line with the literature. The privately provided affordable housing is tied to housing market fluctuations, which is not the case for the constantly decreasing public sector affordable housing. The fluctuations of the privately affordable housing tend to be more pronounced than the supply reactions to price signals. The adoption of the CIL has a -0.33% effect on supply only for local authorities that have not activated the flexible ‘exceptional circumstances relief’ mechanism. These results highlight the value of flexibility in policy tool design and offer insights into the effectiveness versus efficiency debate over land value capture that is shown to be inexorably linked to affordable housing provision and supply constraints.
Source: Cities
DOI: 10.1016/j.cities.2026.106913
Language: English
Open Access status: hybrid
Estimated APC paid: $3,000
OpenAlex ID: W7130364963
FWCI:
Cites: 52
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