Waste May Pile Up Property Charges

Waste May Pile Up Property Charges

Copyright: David Lawson - published Property Week 2006

Junior Environment Minister Ben Bradshaw let slip a couple of months ago that extra charges may be imposed on waste. This was interpreted at the time as a warning to householders, who remain stubbornly resistant to sorting rubbish into those colourful recycling bins sprouting along pavements. But the threat could be more insidious to landlords. More recently he told London businesses the issue was ‘moving up the political agenda’. That was shorthand for the fact that waste will play a big role in the run-up to the next election as the main parties battle to prove who is the most green.

Charging households would hit potential voters. Landlords are less of a problem, particularly when they can be blamed for producing 10 times as much rubbish. And the commercial waste mountain will grow by more than 50% over the next 15 years. A review on waste due to report later this year could give the first official indication n of higher charges. Landfill tax, which rose to £21/tonne in April, is already rising by £3 a year towards a target of £35. This could easily be shifted to a higher range.

Local authorities will also seek to push up charges for waste disposal as they struggle to meet growing waste volumes. These increased by 1.5% annually in the four years to 2004/5 in England, according to government statistics. It would take huge fee increases to make a significant impact, however. In a buoyant economy, developers absorb marginal rises, while landlords pass on costs through service charges.

Tougher disposal controls are the most likely weapon. EU rules on what can be dumped and where are already squeezing both councils and businesses. Landfill fell from 72% of municipal waste in 2004 to 67% last year. Recycling increased from 19% to 23.5%. No-one knows whether the private sector is being as determined to reduce its burden, but there will be no choice in future. Even the most routine redevelopment could be locked down for months if Environment Agency inspectors decide that demolition rubble demands a waste disposal licence.

The slightest trace of toxins in the buildings or ground – highly likely when regeneration has become the norm – will make matters worse, as there are now so few sites licensed to take such waste. Developers should be preparing now for worst-case scenarios where they must handle most, if not all, waste on site. Too few bother with environmental risk assessments, despite the proliferation of cheap, online reports. Even fewer go further, commissioning more detailed site visits, risking expensive new work if spot checks reveal less obvious dangers ranging from a rare plant to hidden asbestos. That involves not just extra costs but the logistics of storing material and accommodating mobile processing equipment.

Landlords and occupiers face similar hurdles where waste is significant. They should be setting policies now which include rules such as suppliers reducing or taking away packaging. Some have foreseen the difficulties and are already pursuing ‘green’ policies. Land Securities has been targeting waste from shopping centres for some time while Arlington has set stringent rules for its business parks. The big fly in this ointment is that recycling significant amounts of material will require another 700 sites across the country, according to a study by law firm Norton Rose. But that could be a bonus for the property industry, as landfill tax will not provide enough to pay for this massive total. Developers could launch PFI-style partnerships which take up the slack. For once, investing in rubbish may actually be a benefit.

CASE STUDY

Development Securities uses waste management plans on all developments after a trial at the Royals Business Park in London Docklands.

As the site was cleared, materials were stockpiled rather than removed, and used later in construction. This reduced waste and use of new materials, as well as easing the local impact from lorries.

Suppliers were encouraged to reduce packaging.

Construction waste was segregated into timber, metal and general waste. General waste was compacted and collected daily. Waste sent for recycling was measured, as was general waste, and recorded with the Building Research Establishment (BRE) waste management tool SMARTStart.

General waste was sent to a transfer station so that further recyclable materials could be recovered. Health & safety and environmental talks to new staff were reinforced with pamphlets and posters during construction. Using a waste management contractor increased overall efficiency of the site and the maintained high standards of health and safety.

Consultation with the BRE at the end of the project revealed below average waste generation compared with other sites using SMARTStart. It was also a useful way to identify improvements for future developments

Impact of Waste Controls

Construction:

Tighter contamination and disposal controls