Compensating regulation of land: UK and Singapore compared

Publication Date08 July 2019
Pages135-150
DOIhttps://doi.org/10.1108/JPPEL-01-2019-0003
AuthorEdward Seng Wei Ti
SubjectProperty management & built environment,Building & construction,Building & construction law,Real estate & property,Property law
Compensating regulation of land:
UK and Singapore compared
Edward Seng Wei Ti
School of Law, Singapore Management University, Singapore, Singapore
Abstract
Purpose The paper aims to analyse and compare how UK and Singapore deal with compensationwith
respect to regulation of land (short of a physical taking). The purpose is to determine whether the non-
compensationin each jurisdiction is justied.
Design/methodology/approach A comparative method using case law, statutes and secondary
materialacross both jurisdictions (as well as some US case law) is adopted.
Findings Both the UK and Singaporedo not provide compensation when land is affected by regulation, so
long as a physical taking has not occurred. Partly becauseof the abolition of development rights in the UK
since 1947, this position may be justied. Conversely, Singapores Master Plan seeks a great deal of public
relianceand advertises development potential, and non-compensationis not defensible.
Originality/value There is very limited analysison regulatory effects of land in the UK, and virtually
none in Singapore. This would also be the rst attempt to compare this aspect of the UK and Singapores
planningregime.
Keywords Conservation, Planning
Paper type Research paper
1. Introduction
This paper denes regulatory incursions to landas any law that directly restricts, but
does not involve the physical taking, of private land. Thus, the imposition of reduced
building height restrictionswould constitute a regulatory incursion so too would rezoning
land previously granted permission for a high economic value use (e.g. commercial) to a
lower economic value use (e.g. agriculture). The phrase directly restrictsalso warrants
explanation. The necessity to limit the denition of a regulatory incursion to laws that
directly impinge upon land use is needed to ensure a meaningful discussion[1]. I would not
consider, for instance, a planners decision to create a new downtown as a regulatory
incursionto landowners adversely affected (in the old downtown), even if regulation was
involved because such effects are consequential. Denitions aside, the critical takeaway is
that a regulatory incursion to land[2] differs from compulsory purchase because such
regulation does not result in privately owned land being physically acquired but instead
renders it less economicallyviable.
While all modern jurisdictions[3]provide statutory market price compensation when the
State physically acquires privately owned land compulsorily (Ti, 2018), it is interesting to
note that both Singapore and the UK do not provide compensation as of right when
privately owned land is not physically acquired but merely rendered less economically
valuable[4]. Land lawyers know that the ambit of property rights constitute more than the
mere physical perimeter of a plot of land,with urban land value far exceeding the worth of
the soil, rock and gravel comprising the land lot. What and how much can be built on land
are the primary drivers of urban land value, both of which are controlled by the State. If a
landowner has newly imposed limits on development imposed on him or her, then surely
Compensating
regulation of
land
135
Received28 January 2019
Revised26 March 2019
Accepted27 March 2019
Journalof Property, Planning and
EnvironmentalLaw
Vol.11 No. 2, 2019
pp. 135-150
© Emerald Publishing Limited
2514-9407
DOI 10.1108/JPPEL-01-2019-0003
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2514-9407.htm
such a landowner subject to these planning limitations has suffered a loss or downzoning.
Like the landowner whose land has been physically acquired compulsorily, both have lost
important property rights. Yet, Altermans (2010) treatise, the rst large-scale comparative
research devoted entirely to regulatory incursions show that compensation for regulatory
incursions, short of a physicalacquisition, is typically absent and is at best minimal.
It is apparent that land procured todayby a developer with planning potential to build a
500-room hotel is worth vastly more thanthe same plot tomorrow if by regulation, the lands
planning potential is amended to only allow for a row of single-dwelling homes to be built.
Comparing the UK and Singapore, this paper asks why governmentstreat a physical taking
of land and a regulatory incursion so markedly different given that a regulatory incursion
could have the same, or even greater, nancialburden on landowners.
Following this introduction, Section 2 considers whether there may, in principle, be
differences between compulsory acquisition and a regulatory incursion justifying the
difference in treatment. Section 3 provides a theoretical outline justifying the comparative
method and sets out the relevant planningaspects in the UK and Singapore, whereas Section
4 endeavours a comparative analysis between the two jurisdictions. Section 5 considers
whether designating property with conservation or listed status could amount to a
regulatory incursion. Finally, Section 6 concludes that while the UK position of non-
compensation is defensible, differences in the planning regimes make transplantation of
reasoning to the Singapore contextinapplicable.
2. Dierences between land acquisition and regulatory downzoning?
2.1 Land acquisition and regulatory downzoning
On one view, it may be argued that land acquisition is compensable, whereas regulatory
incursions are not, because the purposes and circumstances of the two are different.
Compulsory purchase may be thought of as a planning tool to facilitate efcient land
assembly and developmentthus obviating the problem of holdout. If downzoning is labelled
as a tool to create environmental amenities, for instance trafc reduction by limiting
development, then perhapsit could be argued that while both acts infringe private property,
non-compensation may be justiedin the case of downzoning because regulatory control of
land use simply represents part of the burdenof common citizenship[5].After all, the give
and take of civil society frequently requires that the exercise of private rights should be
restricted in the public interest[6].
There is no denying that both compulsory land acquisition and downzoning are useful
and necessary planning tools; the problem lies in the fact that downzoning is not
compensable. Landowners cannot be said to have the dutyto be subjected to non-
compensable regulatory downzoning. No broader duty to common citizenshipis
applicable to regulatory downzoning if the same cannot apply to compulsory acquisition.
This is not a mere rhetoric; in relationto environmental regulatory controls, Gray notes that
non-compensation is justied becausethe community is already entitled, has always been
entitled, to the benet of a public-interest forbearance on the part of the landowner(Gray,
2002). Such an argument would not, however, apply to a landowner whose land
development potential was reduced through regulation: a landowner may never have had
the right to use his land in a manner noxious or harmful to others,but it cannot be said that a
landowner affected by regulatory downzoning never had superior development rights a
priori.
It is also noted that while the purpose behind acquisition and downzoning can be
different, they often have overlapping aims. Thus, land acquisition may be used for the
development of public infrastructure projects, as a mechanism to land bank by assembling
JPPEL
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