Developer contributions to the financing of infrastructure

Taxonomy and description

Description

Developer contributions to infrastructure can be justified for two related reasons. First, are cases where a development is expected to create a burden on existing infrastructure, or to require new infrastructure altogether. Second, are cases where developers, and the businesses which they establish in an area, will benefit from good transport infrastructure, and as such can be expected to contribute to it.  For the present purpose, both are considered. These contributions should be distinguished from other types of measure in which a developer pays privately for infrastructure, cases where they loan money or resources for the development of infrastructure which is then paid back (usually at interest) either by users or by taxpayers, or the concept of value capture, in which existing property owners contribute to the costs of new infrastructure to reflect the benefits which they gain from it. These forms of financing are not considered here.  

Terminology

The form of develop contribution based on the idea that businesses benefit from locating in an area with good transport infrastructure is sometimes known as an infrastructure levy (such as the Community Infrastructure Levy in England and Wales). Formal requirements for developer contributions to infrastructure can be a result of legalisation, which either demands a contribution, or allows local authorities to ask for a contribution as a means of gaining planning consent. Where contributions are a result of legislation, they can gain names making reference to that legislation (e.g. ‘section 106 agreements’ referring to section 106 of the Town and Country Planning Act 1990 (England and Wales)).