The Mayor of London has launched a public consultation on the Community Infrastructure Levy Preliminary Draft Charging Schedule that will be used to contribute towards the funding of Crossrail 2.
Most new development which creates net additional floor space of 100 square metres or more, or creates a new dwelling, is potentially liable for the levy. Some developments may be eligible for relief (affordable housing) or exemption (education or healthcare uses).
There is already a Mayoral CIL in place to fund Crossrail 1 and a Section 106 charge that applies to commercial floorspace in Central London and the North of the Isle of Dogs and within 1km of a Crossrail station. The intention is that from April 2019 the Crossrail 2 CIL will supersede the current Crossrail 1 Community Infrastructure Levy and the associated S.106 charge.
Crossrail 2 is a proposed new railway serving London and the wider South East. It connects the National Rail networks in Surrey and Hertfordshire via a new tunnel and stations between Wimbledon, Tottenham Hale and New Southgate, linking in with London Underground, London Overground, Crossrail 1, and national and international rail services. Like Crossrail, Crossrail 2 will address major emerging pressures on the transport network. Population and employment in London and the South East are forecast to grow strongly – by a further 20 per cent over the next 15 years. Without action to relieve crowding, boost connectivity and unlock new housing, London and the wider South East will struggle to grow sustainably in coming decades.
The Mayor is proposing that the changes take effect from April 2019 and are expanded to include hotel, office and retail projects, in addition to the residential projects already subject to charge under the current MCIL1. Rates are expected to rise sharply across the board, although the effect of indexation will mean that Band 3 areas may see a slight fall in the adjusted rate.
Back in February, the Government released their Housing Review and mooted ideas for a revamped CIL morphing into a Local Infrastructure Tariff (LIT) and applied at significantly lower rates but across a wider range of projects (and without the currrent range of exemptions). The CIL review suggested that LIT might be in place by 2019/2020; although that was prior to the recent General Election – which may now delay the implementation of the wider CIL changes. Indeed, some suggest that these proposals from the London Mayor suggest a significant lack of confidence in the original timetable for CIL reform.
Alun Oliver, Managing Director at E3 Consulting, said “We still see too many enquiries from developers and owners seemingly oblivious to the fact that their projects are liable to CIL and MCIL. These increases to MCIL will undoubtedly further pressurise project viability and delivery of housing targets across London whilst also increasing the cost of office, hotel and retail schemes within the Central London and Docklands zones.”