Who pays for place

Today, perhaps more than ever, every pound is counted twice.

Affordable housing, Section 106, Community Infrastructure Levy, building safety, biodiversity net gain and upfront infrastructure all compete for the same finite development funds. In that environment, it is hardly surprising that one question tends to slip down the agenda until late in the day: who pays to look after a new development following completion.

Stewardship funding is often treated as a residual, negotiated at the margins long after the land acquisition, joint venture and viability and other financial considerations. Yet landscape, public realm and green infrastructure are not optional extras. As a result of biodiversity net gain (BNG) and the wider sustainability agenda, the long-term management of open spaces is now integral to planning risk, asset performance, marketing and overall credibility. It is also a potential value-generation tool and critical to the creation of a sense of space, community cohesion and personal health and well-being.

Given the viability challenges in today’s market, we cannot avoid the question of who pays for place. We need definition about how stewardship is defined, how it is financed and how we can make it work commercially.

What stewardship means in practice 

When I talk about stewardship with clients, I am not thinking about a narrow grounds maintenance contract. Stewardship, in a development context, is the long-term governance, funding and management of everything that makes a place work between (and sometimes including) the buildings. That includes parks and green corridors, SuDS, play spaces, biodiversity features, civic squares, streets, community centres and sometimes cultural or meanwhile uses. 

Historically, there were clearer custodians: a significant role for local authorities (directly leading development) and in regard to New Towns, delivery by single bodies that retained land-value uplift and reinvested it back into schemes. Today, ownership and responsibility are more fragmented across developers, management companies, local authorities, housing associations and residents.

At the same time, policy repeatedly pushes stewardship up the agenda. Biodiversity net gain requires habitats to be managed for thirty years. Green infrastructure frameworks expect governance and funding to be planned from the outset, not bolted on at discharge of conditions. Local Plans and design codes now treat long-term management as part of placemaking, not as a technical afterthought.

The viability crunch 

The difficulty is the tough viability backdrop: higher build costs, more stringent building-safety requirements, tightening energy standards and policy expectations on affordable housing and infrastructure all reduce the headroom available for anything that does not show an instant return.

In that context, stewardship can appear to be a luxury. When margins are tight it is tempting to default to the familiar: a private management company funded by estate charges, or a basic commuted sum, if the council is still willing to adopt the land. Those mechanisms can work, but too often they are under-costed, taken forward late in the process and resented by local residents. The result is fragile models that store up trouble for residents, investors and local authorities.

BNG illustrates the tension well. A scheme may rely on habitat creation to secure consent, only to discover that the cost of thirty years of ecological management is more onerous than expected. Similar pressures exist around SuDS, play areas, intensive planting or a complex public realm. When the financial modelling fails to keep pace, stewardship risks becoming the casualty.

New and emerging funding models 

The industry is responding by exploring a wider mix of funding sources. Beneath the headlines there are four broad models, often combined on a single scheme.

The first is the traditional approach of service charges, estate charges, sinking funds and commuted sums. These are familiar and they provide a clear route to recover costs. Their weakness is that they depend heavily on accurate early cost forecasting and on resident or occupier tolerance for rising charges over time.

The second is market income. On mixed-use and higher-density schemes, especially in more prosperous areas, we are seeing more attention paid to using car parks, cafes, workspaces, events, sports facilities or even rooftop infrastructure to generate an income stream. That demands commercial skill and carries risk, particularly in the early years, but it has the potential to reduce reliance on households as the default funder of public realm.

The third is cross-subsidy from phases of development. Master developers work on the basis that early infrastructure and landscape investment, backed by patient capital, raise the quality of the scheme, and that this in turn supports values and absorption across later phases. In practice this may mean accepting that stewardship costs sit within an estate-wide business plan rather than being loaded onto the first parcels.

The fourth is endowment-based models. The Land Trust and The Parks Trust in Milton Keynes demonstrate how capital endowments or income-producing property portfolios can fund stewardship in perpetuity. These structures are attractive to local authorities because they avoid future liabilities, and they can provide real resilience. Their obvious challenge is the upfront cost and the need for strong governance to protect capital.

In my experience across a wide range of clients and schemes, the best strategies blend these approaches rather than choose a single route.

Underestimating long term costs 

Even with more tools available, there is evidence that the industry continues to underestimate the long-term cost of maintaining places. Landscapes are more complex, climate pressures are more acute, expectations on accessibility and safety are higher and regulatory demands, especially around BNG, are more exacting.

Case studies from stewardship trusts show that historic commuted sums often ran out too soon. Invariably, the consequence is a gradual decline in quality which cannot be reversed without fresh capital – raising the question of where that capital might come from.

There is also a skills gap. Many conventional estate management structures are not set up to deliver ecological monitoring, adaptive habitat management, or active animation of public spaces. If stewardship is treated just as a maintenance contract, the wider benefits – social, environmental and commercial returns – are missed. With that, the potential reputational benefits of a high-quality scheme are also missed by the delivery partners.

But in my experience, the risk is not that stewardship is over-specified, it is that schemes commit to ambitious public-realm and environmental outcomes at planning stage without an equally robust plan for how those outcomes will be funded and governed for decades. That is where long-term liability anxiety originates.

Stewardship as an investment 

Viewed differently, stewardship funding is not simply another line in the cost plan. It is an investment in the performance of the place. Well managed public realm can support stronger sales rates, fewer voids and greater investor confidence. Poorly managed environments, by contrast, generate complaints, disputes and brand damage that can follow a developer or landowner from one project to the next.

There is a growing body of work, particularly from organisations such as The Land Trust and Community Stewardship Solutions, which attempts to quantify the social and economic value created by good stewardship and clarify its benefits early in the planning process. This takes into account improved health outcomes, higher levels of community activity, better environmental performance and increased local spend. While the numbers will vary from scheme to scheme, the overarching finding is that spending wisely on stewardship produces returns that extend well beyond neat lawns.

For developers and investors, there is also an ESG dimension. Stewardship is where climate, nature recovery and community commitments become visible and testable. It is increasingly difficult to claim a scheme is sustainable if the governance and funding of the public realm are opaque or precarious. A credible stewardship strategy can therefore support access to capital as well as planning consent.

Where this leaves the viability debate 

Stewardship needs to be considered from the start. The answer to the question “who pays for place” is rarely one party alone. Residents, commercial occupiers, landowners, endowment vehicles and, in some cases, the public sector will all contribute in different ways. The challenge is to structure those contributions so that they are transparent, affordable, resilient and aligned with the character of the scheme.

That is where advisers with a grasp of land value, planning policy and long-term asset management can add real value. We have been pleased to help clients move stewardship out of the miscellaneous column and into the core of the development strategy. That means stress testing the long-term cost profile, mapping funding options, designing governance that can survive tenure reform and local government change, and making sure that the quality promised at planning stage can still be seen on the ground in thirty years’ time.

There is scope to sharpen this debate further by drawing on specific projects and local authority expectations, but it is already clear that in a world of constrained budgets and rising obligations, places that manage to secure credible stewardship will stand out. On that basis, the question is no longer whether we can afford to pay for places but whether we can afford not to.