The report, written by professor Tony Travers of the London School of Economics for the Westminster Property Association, says there has been a breakdown of public trust in the planning system and calls for a series of measures to build support for development.
The report says the "question of how far the public trusts those who operate the planning system is particularly acute in London, where most land is already developed and where densities are high".
Moreover, it adds, "many buildings have statutory protection on heritage grounds and there are significant lobbies against further development near existing homes. The need for politicians to explain and negotiate trade-offs between different interests will inevitably be greatest where densities are highest".
Key recommendations include a larger role for politicians in explaining these trade-offs in the planning system and how new development can pay for infrastructure.
The report says developers should make more effort to understand the concerns and needs of the local community but also calls for greater transparency in the planning system, particularly around section 106 and affordable housing contributions.
"Developers need to be clearer about what they are paying for and why", says the report. It adds that councils "need to ensure credit is shared between themselves and those paying for improvements."
Better arbitration mechanisms should be introduced to "hammer out differences" over developer contributions on complex high-profile projects, the report says.
It also calls for exploration of a zoning system that would create permitted development rights in specific areas if developers met a series of predetermined requirements.
Travers writes: "Development has become politicised because of the need for successive governments to raise resources.
"The planning system has become a way of taxing development not only for short-term investment in housing, transport, leisure facilities and the environment but also for longer-term maintenance."
However, "there has been no explicit signalling that private companies are increasingly involved in the delivery and upkeep of public assets and the public realm," he adds.
"There is evidence that the public has little idea about how new development pays for infrastructure and other benefits."
In the report foreword, Westminster Property Association chair James Cooksey writes: "The trick will be to strike the right balance between contributing to what is needed locally, and for development to generate value.
"Profit should not be a dirty word, but legitimate return has become conflated with largesse. This, combined with the complexity of the planning process - which has broken the direct link between development and the contributions flowing from it - has clearly served to erode public trust."
In October, Westminster City Council backed plans for a shake-up of its planning service that includes allowing members of the public a right to speak at planning meetings and a clampdown on hospitality from developers.
The move followed a review of the central London authority's planning service in the wake of controversy around the level of hospitality that former planning committee chair, Sir Robert Davis, had received from developers.