Compulsory Purchase Orders (CPOs) emerged from a British 17th century need to assemble land in order to create canals. In the 19th century they were used the same way to assemble land for the construction of railways. As a principle of British Common Law, it enshrines the idea that if there is a pressing enough public need, individuals might have their land expropriated for the common good. This principle has been inherited by former British colonies, including America.
How can a principle that has been used to build transportation infrastructure such as canals, railways and highways, be employed to help ease the affordable housing crisis? In fact, Compulsory Purchase Orders have been adapted to public needs for a variety of purposes: building military airfields and radar stations during World War II, for example.
As countries realize that affordable housing is a national crisis, there is justification for using CPOs for affordble housing as well as transportation infrastructure. This use also has its precedents. Following World War I, with landed gentry struggling to keep together great estates and local councils desperate to build housing, CPOs were used to expropriate land from those who were, or at one time had been, wealthy. For a short history of a British estate that became the subject of a CPO, read in Wikipedia Commons: The History Of Braunstone Park
With the affordable housing crisis deepening, different jurisdictions are revisiting the use of CPOs. They are being considered to expropriate existing, unoccupied houses. There is no need for the houses to be linked in any particular geographic area — unlike land assembled for a highway, pipeline or railway. Read more about CPOs for vacant housing in a speech by an Irish TD ( Teachta Dála, a member of Dáil Éireann, the lower house of the Republic of Ireland’s parliament). In the Dundalk Democrat: Louth TD Calls On Government To Get Proactive On Vacant Housing.
Another way of using CPOs is to acquire land to build affordable housing projects, compensating the land owners according to the nature of the land expropriated. This potentially addresses ‘land assembly’ by speculators who buy land and keep it off the market, helping to drive up land prices until it can be sold at a healthy profit. For more, read in The Independent: Could Forced Sales Of Undeveloped Land Work And Is ‘Land Banking’ Really Happening?
Since the beginning of the use of CPOs, jurisdictions have generally done their best to mitigate the hardship caused to sitting tenants on the land to be expropriated, with considerable effort made to pay a fair price. In the History of Braunstone Park mentioned above, the owner claimed he needed to be compensated for ‘recent considerable refurbishment of the manor house.’
However, modern times see many vacant houses, and much vacant land, held by speculators. There are no sitting tenants. Nevertheless, there has long been a practice of continuing to consider the ‘future value’ of a property. This can have the effect of a local council paying a land speculator’s notional profit on land or housing that has been acquired by ‘vulture capitalists’ at fire sale prices.
The UK is now considering changes to the rules regarding expropriation that do not necessarily award speculators whose actions drive up the cost of housing. Read more in the Shelter Blog: Compulsory Purchase And Council Homes – A New Direction For Housing Policy?
The American use of Compulsory Purchase Orders has evolved somewhat differently from practice on the UK and the Republic of Ireland. Read more in The Compulsory Purchase Association: Learning From The American Way
