Session 4: You have viability
evidence – so what?
Consultation
• Why
• Who with
• When
• So what and what do you do with the results?
Consultations Engagement
• A fundamental part of plan making and a
requirement of NPPF, CIL Regs, Harman
Guidance
• Don’t be afraid to ask the developers
– For some evidence to support figures
– To explain / for detail
• Record process and comments
METICULOUSLY
• What have you actually asked and is it in the
context of delivering the development plan
Engagement Phases
• Delay at your peril
• Two or three stages
Stage 1 Engagement
• Background and why
– Methodology
– Viability test
– Appraisal assumptions
• Not results
• Certainly not policy
Stage 1 includes establishing agreement on
methodology and assumptions (build costs, sale
prices etc.) Does not include workings.
Stage 2 Engagement
• Changes made from first consultation (or not)
– Methodology
– Viability test
– Appraisal assumptions
• Draft Results
• Emerging conclusions
• Still not policy
Stage 3 Engagement
•
•
•
•
Results
Factors other than viability to consider
Emerging and developing policy
Changes to existing policy
• Approve now or hang on?
WPV & plans found sound in 2014
Developer’s Profit
Threshold Land Value
17%
£370,000/ha
Cannock Chase
20% on GDV
£100,000-£400,000/ha
Christchurch & East
Dorset
20% on GDC
£308,000/ha (un-serviced)
£1,235,000/ha (serviced)
20% market/6% Affordable
£450,000/ha
Erewash
17%
£300,000/ha
Fenland
15-20%
£1-2m/ha (serviced)
20% market/17.5% large sites/6%
Affordable
£370,000-£430,000/ha
17.5% market/6% Affordable
£500,000/ha
20% (comprising 5% for internal
overheads).
£250,000/ha
17.5% market/6% Affordable
£1.26-£1.41m/ha (serviced)
17.5%
£100,000-£300,000/ha
Local Authority
Barbergh
East Hampshire
GNDP
Reigate & Banstead
Stafford
Staffordshire Moorlands
Warrington
Confidentiality
• FOI Act 2000 (Sections 41 and 43(2))
• Environmental Information Regulations 12(5)(e)
• R (English) v East Staffordshire Borough Council and Anor
(2010 EWHC 2744
• Heygate Decision (2014)
• Recent ICO Decisions (2012-2014)
• RICS GN – Paragraph 4.3
• “This viability report is provided on a confidential basis to the Council. We
therefore request that the report should not be disclosed to any third
parties (other than consultants instructed by the Council to review this
report) under the Freedom of Information Act 2000 (sections 41 and 43(2))
or under the Environmental Information Regulations.” (para 4.3.3)
• Planning Performance Agreements
Case study: South Worcestershire
Case Study – South Worcestershire
Local Plan
No additional requirements
• No affordable housing
• Built to Building Regulations (Part L)
• Density informed by consultation with officers and
developers – lower than policy to reflect current
delivery (targets assume high content of flats etc)
• Greenfield sites over 1 hectare have 40% open
space
• No CIL or s106
• All other requirements over high quality and locally
distinctive design and safe design remain
No additional requirements
Site 1
Site 2
Site 3
Site 4
Site 5
Site 6
Site 7
Site 8
Site 9
Site 10
Site 11
Site 12
Site 13
Site 14
Site 15
Site 16
SUE 1
SUE 2
Greenfield 1
Greenfield 2
Greenfield 3
Brownfield redev. L
Urban Flats
Brownfield redev. M
Medium Brownfield
Medium greenfield
Urban edge
Town centre flats
Ex garage site
Town Village Infill
Small Village Scheme
Village House
Viability Appraisals. Alternative / Viability Threshold compared with Residual Values (£/ha)
Malvern Hills
Worcester
Alternative
Viability Residual Value
Alternative
Viability Residual Value
Alternative
Land Value
Threshold
Land Value
Threshold
Land Value
25,000
280,000
650,432
0
0
0
25,000
25,000
280,000
621,867
0
0
0
25,000
25,000
280,000
995,236
0
0
0
25,000
25,000
280,000
1,126,237
25,000
280,000
994,779
25,000
0
0
0
25,000
280,000
922,171
25,000
0
0
0
350,000
420,000
757,823
350,000
0
0
0
350,000
420,000
1,347,757
0
350,000
420,000
1,626,764
350,000
420,000
2,639,944
350,000
350,000
420,000
1,453,344
350,000
420,000
1,453,344
350,000
25,000
280,000
2,426,809
25,000
280,000
2,232,961
25,000
50,000
310,000
1,881,763
50,000
310,000
2,236,383
50,000
350,000
420,000
2,237,069
350,000
420,000
2,377,585
350,000
350,000
420,000
1,211,920
350,000
420,000
464,046
350,000
750,000
900,000
2,132,497
750,000
900,000
1,476,716
750,000
50,000
310,000
1,714,651
0
0
0
50,000
50,000
310,000
805,244
0
0
0
50,000
Wychavon
Viability Residual Value
Threshold
280,000
621,823
280,000
596,858
280,000
932,853
280,000
1,060,508
280,000
1,596,523
420,000
2,315,869
0
0
420,000
3,154,171
420,000
1,312,746
280,000
1,145,242
310,000
1,881,763
420,000
1,393,974
420,000
1,964,321
900,000
3,728,997
310,000
2,651,247
310,000
1,398,921
Build Standards
• Code for Sustainable Homes Level 4 from April 2013
– Add 6% to cost of house
• SWLP 26 Renewable and Low Carbon Energy
(a) All new developments will be required to incorporate the
generation of energy…by at least 10%.
(b) All new development (as part of the major developments)
will be required to incorporate the generation of
energy…by at least 20%.
– Add 2.5% to cost of house (+/- £2,500 /dwelling)
• NOT JUST REDUCING USE – ACTUALLY ABOUT
GENERATION
• NO EVIDENCE OF ANY PRICE BENEFIT FROM
REDUCED ENERGY BILLS
CfSH Level 4 + Onsite Generation
Site 1
Site 2
Site 3
Site 4
Site 5
Site 6
Site 7
Site 8
Site 9
Site 10
Site 11
Site 12
Site 13
Site 14
Site 15
Site 16
SUE 1
SUE 2
Greenfield 1
Greenfield 2
Greenfield 3
Brownfield redev. L
Urban Flats
Brownfield redev. M
Medium Brownfield
Medium greenfield
Urban edge
Town centre flats
Ex garage site
Town Village Infill
Small Village Scheme
Village House
Viability Appraisals. Alternative / Viability Threshold compared with Residual Values (£/ha)
Malvern Hills
Worcester
Alternative
Viability Residual Value
Alternative
Viability Residual Value
Alternative
Land Value
Threshold
Land Value
Threshold
Land Value
25,000
280,000
535,926
0
0
0
25,000
25,000
280,000
521,654
0
0
0
25,000
25,000
280,000
872,062
0
0
0
25,000
25,000
280,000
995,676
25,000
280,000
864,218
25,000
0
0
0
25,000
280,000
779,958
25,000
0
0
0
350,000
420,000
484,376
350,000
0
0
0
350,000
420,000
524,622
0
350,000
420,000
1,311,267
350,000
420,000
2,349,470
350,000
350,000
420,000
1,199,472
350,000
420,000
1,199,472
350,000
25,000
280,000
1,762,806
25,000
280,000
1,607,728
25,000
50,000
310,000
1,674,752
50,000
310,000
2,029,372
50,000
350,000
420,000
1,941,730
350,000
420,000
2,082,246
350,000
350,000
420,000
995,333
350,000
420,000
235,519
350,000
750,000
900,000
1,922,648
750,000
900,000
1,266,867
750,000
50,000
310,000
1,512,381
0
0
0
50,000
50,000
310,000
722,386
0
0
0
50,000
Wychavon
Viability Residual Value
Threshold
280,000
507,317
280,000
496,645
280,000
809,678
280,000
929,947
280,000
1,454,311
420,000
2,037,874
0
0
420,000
2,841,637
420,000
1,057,528
280,000
735,859
310,000
1,674,752
420,000
1,120,071
420,000
1,738,024
900,000
3,523,165
310,000
2,500,000
310,000
1,316,871
Affordable Housing
• 15 or more 40%
• 10 – 14
30%
• 5–9
20%
As social rented, affordable rented and
intermediate tenure and provided on site
NOT TESTED Less than 5, a financial
contribution will be required.
Affordable Housing
Site 1
Site 2
Site 3
Site 4
Site 5
Site 6
Site 7
Site 8
Site 9
Site 10
Site 11
Site 12
Site 13
Site 14
Site 15
Site 16
SUE 1
SUE 2
Greenfield 1
Greenfield 2
Greenfield 3
Brownfield redev. L
Urban Flats
Brownfield redev. M
Medium Brownfield
Medium greenfield
Urban edge
Town centre flats
Ex garage site
Town Village Infill
Small Village Scheme
Village House
Viability Appraisals. Alternative / Viability Threshold compared with Residual Values (£/ha)
Malvern Hills
Worcester
Alternative
Viability Residual Value
Alternative
Viability Residual Value
Alternative
Land Value
Threshold
Land Value
Threshold
Land Value
25,000
280,000
332,757
0
0
0
25,000
25,000
280,000
324,151
0
0
0
25,000
25,000
280,000
574,023
0
0
0
25,000
25,000
280,000
656,141
25,000
280,000
453,169
25,000
0
0
0
25,000
280,000
379,850
25,000
0
0
0
350,000
420,000
-448
350,000
0
0
0
350,000
420,000
-1,163,134
0
350,000
420,000
951,958
350,000
420,000
1,239,168
350,000
350,000
420,000
625,000
350,000
420,000
361,330
350,000
25,000
280,000
1,464,601
25,000
280,000
1,100,887
25,000
50,000
310,000
1,259,642
50,000
310,000
1,341,269
50,000
350,000
420,000
1,357,721
350,000
420,000
1,630,041
350,000
350,000
420,000
872,319
350,000
420,000
144,924
350,000
750,000
900,000
2,132,497
750,000
900,000
1,476,716
750,000
50,000
310,000
1,714,651
0
0
0
50,000
50,000
310,000
805,244
0
0
0
50,000
Wychavon
Viability Residual Value
Threshold
280,000
195,205
280,000
203,879
280,000
405,338
280,000
478,409
280,000
769,128
420,000
906,356
0
0
420,000
1,513,254
420,000
245,641
280,000
419,301
310,000
1,071,326
420,000
844,132
420,000
1,333,809
900,000
3,728,997
310,000
2,651,247
310,000
1,398,921
Density
• Density informed by consultation – lower than
policy
• Greenfield sites over 1 hectare have 40%
open space
• Brownfield sites NO Public Open Space
• Greenfield sites less than 1ha but more than 5
units 20% open space
Affordable Housing, Density,
CfSH4, Onsite Generation, ‘No’ CIL
Site 1
Site 2
Site 3
Site 4
Site 5
Site 6
Site 7
Site 8
Site 9
Site 10
Site 11
Site 12
Site 13
Site 14
Site 15
Site 16
SUE 1
SUE 2
Greenfield 1
Greenfield 2
Greenfield 3
Brownfield redev. L
Urban Flats
Brownfield redev. M
Medium Brownfield
Medium greenfield
Urban edge
Town centre flats
Ex garage site
Town Village Infill
Small Village Scheme
Village House
Viability Appraisals. Alternative / Viability Threshold compared with Residual Values (£/ha)
Malvern Hills
Worcester
Alternative
Viability Residual Value
Alternative
Viability Residual Value
Alternative
Land Value
Threshold
Land Value
Threshold
Land Value
25,000
280,000
218,251
0
0
0
25,000
25,000
280,000
223,909
0
0
0
25,000
25,000
280,000
450,848
0
0
0
25,000
25,000
280,000
525,581
25,000
280,000
322,609
25,000
0
0
0
25,000
280,000
239,889
25,000
0
0
0
350,000
420,000
-292,137
350,000
0
0
0
350,000
420,000
-2,048,052
0
350,000
420,000
633,442
350,000
420,000
932,511
350,000
350,000
420,000
361,544
350,000
420,000
89,196
350,000
25,000
280,000
991,346
25,000
280,000
701,754
25,000
50,000
310,000
1,050,650
50,000
310,000
1,132,277
50,000
350,000
420,000
1,083,111
350,000
420,000
1,334,701
350,000
350,000
420,000
643,792
350,000
420,000
-83,603
350,000
750,000
900,000
1,922,648
750,000
900,000
1,266,867
750,000
50,000
310,000
1,512,381
0
0
0
50,000
50,000
310,000
722,386
0
0
0
50,000
Wychavon
Viability Residual Value
Threshold
280,000
80,699
280,000
103,637
280,000
282,163
280,000
347,849
280,000
626,916
420,000
634,317
0
0
420,000
1,197,757
420,000
-30,053
280,000
151,304
310,000
862,335
420,000
548,379
420,000
1,107,512
900,000
3,523,165
310,000
2,500,000
310,000
1,316,871
Uncertain Market
Average Prices
Uncertain Market
Indexed turn over (from January 2006)
5% fall in prices
Site 1
Site 2
Site 3
Site 4
Site 5
Site 6
Site 7
Site 8
Site 9
Site 10
Site 11
Site 12
Site 13
Site 14
Site 15
Site 16
SUE 1
SUE 2
Greenfield 1
Greenfield 2
Greenfield 3
Brownfield redev. L
Urban Flats
Brownfield redev. M
Medium Brownfield
Medium greenfield
Urban edge
Town centre flats
Ex garage site
Town Village Infill
Small Village Scheme
Village House
Viability Appraisals. Alternative / Viability Threshold compared with Residual Values (£/ha)
Malvern Hills
Worcester
Alternative
Viability Residual Value
Alternative
Viability Residual Value
Alternative
Land Value
Threshold
Land Value
Threshold
Land Value
25,000
280,000
147,873
0
0
0
25,000
25,000
280,000
160,872
0
0
0
25,000
25,000
280,000
368,502
0
0
0
25,000
25,000
280,000
436,846
25,000
280,000
240,000
25,000
0
0
0
25,000
280,000
152,118
25,000
0
0
0
350,000
420,000
-446,987
350,000
0
0
0
350,000
420,000
-2,437,676
0
350,000
420,000
448,113
350,000
420,000
707,161
350,000
350,000
420,000
180,971
350,000
420,000
-94,939
350,000
25,000
280,000
847,322
25,000
280,000
566,416
25,000
50,000
310,000
862,693
50,000
310,000
931,789
50,000
350,000
420,000
842,438
350,000
420,000
1,079,959
350,000
350,000
420,000
436,110
350,000
420,000
-260,893
350,000
750,000
900,000
1,648,413
750,000
900,000
1,035,523
750,000
50,000
310,000
1,265,299
0
0
0
50,000
50,000
310,000
611,018
0
0
0
50,000
Wychavon
Viability Residual Value
Threshold
280,000
11,615
280,000
41,742
280,000
201,689
280,000
261,086
280,000
518,310
420,000
441,647
0
0
420,000
968,147
420,000
-209,804
280,000
34,147
310,000
687,536
420,000
305,335
420,000
880,348
900,000
3,172,312
310,000
2,204,210
310,000
1,188,105
Viability
Threshold
MALVERN HILLS
Site 1
SUE 1
Site 2
SUE 2
Site 3
Greenfield 1
Site 4
Greenfield 2
Site 5
Greenfield 3
Site 6
Brownfield redev. L
Site 7
Urban Flats
Site 8
Brownfield redev. M
Site 9
Medium Brownfield
Site 10
Medium greenfield
Site 11
Urban edge
Site 12
Town centre flats
Site 13
Ex garage site
Site 14
Town Village Infill
Site 15
Small Village Scheme
Site 16
Village House
No
Requirement
CfSH4 + 2.5%
Affordable
Target
Affordable,
CfSH4 +2.5%
and Density
Affordable,
CfSH4 +2.5%
and Density
Prices less 5%
Cumulative Impact
of Policies
Affordable Housing,
Density, CfSH4,
Onsite Generation
Alternative
Land Value
Residual Value
25,000
25,000
25,000
25,000
0
0
0
350,000
350,000
25,000
50,000
350,000
350,000
750,000
50,000
50,000
280,000
280,000
280,000
280,000
0
0
0
420,000
420,000
280,000
310,000
420,000
420,000
900,000
310,000
310,000
650,432
621,867
995,236
1,126,237
0
0
0
1,626,764
1,453,344
2,426,809
1,881,763
2,237,069
1,211,920
2,132,497
1,714,651
805,244
535,926
521,654
872,062
995,676
0
0
0
1,311,267
1,199,472
1,762,806
1,674,752
1,941,730
995,333
1,922,648
1,512,381
722,386
332,757
324,151
574,023
656,141
0
0
0
951,958
625,000
1,464,601
1,259,642
1,357,721
872,319
2,132,497
1,714,651
805,244
218,251
223,909
450,848
525,581
0
0
0
633,442
361,544
991,346
1,050,650
1,083,111
643,792
1,922,648
1,512,381
722,386
147,873
160,872
368,502
436,846
0
0
0
448,113
180,971
847,322
862,693
842,438
436,110
1,648,413
1,265,299
611,018
WORCESTER CITY
Site 1
SUE 1
Site 2
SUE 2
Site 3
Greenfield 1
Site 4
Greenfield 2
Site 5
Greenfield 3
Site 6
Brownfield redev. L
Site 7
Urban Flats
Site 8
Brownfield redev. M
Site 9
Medium Brownfield
Site 10
Medium greenfield
Site 11
Urban edge
Site 12
Town centre flats
Site 13
Ex garage site
Site 14
Town Village Infill
Site 15
Small Village Scheme
Site 16
Village House
0
0
0
25,000
25,000
350,000
350,000
350,000
350,000
25,000
50,000
350,000
350,000
750,000
0
0
0
0
0
280,000
280,000
420,000
420,000
420,000
420,000
280,000
310,000
420,000
420,000
900,000
0
0
0
0
0
994,779
922,171
757,823
1,347,757
2,639,944
1,453,344
2,232,961
2,236,383
2,377,585
464,046
1,476,716
0
0
0
0
0
0
0
0
0
0
0
864,218
453,169
322,609
779,958
379,850
239,889
484,376
-448
-292,137
524,622 -1,163,134 -2,048,052
2,349,470 1,239,168
932,511
1,199,472
361,330
89,196
1,607,728 1,100,887
701,754
2,029,372 1,341,269 1,132,277
2,082,246 1,630,041 1,334,701
235,519
144,924
-83,603
1,266,867 1,476,716 1,266,867
0
0
0
0
0
0
0
0
0
240,000
152,118
-446,987
-2,437,676
707,161
-94,939
566,416
931,789
1,079,959
-260,893
1,035,523
0
0
WYCHAVON
Site 1
SUE 1
Site 2
SUE 2
Site 3
Greenfield 1
Site 4
Greenfield 2
Site 5
Greenfield 3
Site 6
Brownfield redev. L
Site 7
Urban Flats
Site 8
Brownfield redev. M
Site 9
Medium Brownfield
Site 10
Medium greenfield
Site 11
Urban edge
Site 12
Town centre flats
Site 13
Ex garage site
Site 14
Town Village Infill
Site 15
Small Village Scheme
Site 16
Village House
25,000
25,000
25,000
25,000
25,000
350,000
0
350,000
350,000
25,000
50,000
350,000
350,000
750,000
50,000
50,000
280,000
280,000
280,000
280,000
280,000
420,000
0
420,000
420,000
280,000
310,000
420,000
420,000
900,000
310,000
310,000
621,823
596,858
932,853
1,060,508
1,596,523
2,315,869
0
3,154,171
1,312,746
1,145,242
1,881,763
1,393,974
1,964,321
3,728,997
2,651,247
1,398,921
507,317
496,645
809,678
929,947
1,454,311
2,037,874
0
2,841,637
1,057,528
735,859
1,674,752
1,120,071
1,738,024
3,523,165
2,500,000
1,316,871
195,205
203,879
405,338
478,409
769,128
906,356
0
1,513,254
245,641
419,301
1,071,326
844,132
1,333,809
3,728,997
2,651,247
1,398,921
80,699
103,637
282,163
347,849
626,916
634,317
0
1,197,757
-30,053
151,304
862,335
548,379
1,107,512
3,523,165
2,500,000
1,316,871
11,615
41,742
201,689
261,086
518,310
441,647
0
968,147
-209,804
34,147
687,536
305,335
880,348
3,172,312
2,204,210
1,188,105
So what?
• You have a residual value – how to assess
viability
– Competitive returns
– Harman (EUV Plus) v RICS (Market Value)
– Cushion
• EUV Plus – reality checked against the market
Set it out – explain what you have done – don’t
jump to a conclusion
Appraisal considerations
• Future considerations and viability over time
• Scenario testing
• Big impacts of little changes – hypersensitive
model
• Cumulative impact of policy
• Pitfalls and preparing for the EiP
Potential Pitfalls
•
•
•
•
•
•
Out of date Local Plan adopted prior to NPPF
Robust housing target and up to date SHMA
Lack of 5 year supply
5% or 20% additional buffer on 5 year supply
Onerous discretionary policies
Approach to viability out of sync with
RICS/Harman/Draft DCLG guidance website
Context and Conundrum
Informing plan making process
v
retrofitting evidence to policy
• Can you proceed
• Goes to the heart of soundness
• Cumulative impact
Don’t get into endless cycle of consultation, evidence,
consultation, doubt, evidence, consultation….
Preparing for the EiP
•
•
•
•
Examination Statements
PAS NPPF conformity toolkit
Participation Statement
Duty to Cooperate Memorandum of
Understanding
• Statement of Common Ground
• Evidence Base Technical Note
Viability checklist
• Would the approach to developer contributions/CIL
have an unacceptably adverse impact on the
economic viability of development, particularly when
seen in the context of other future requirements?
• Have you worked together with stakeholders to
understand existing business needs and likely
changes in economic markets operating in and
across your area?
• Are there enough sufficient sites, that are viable, to
deliver the plan’s housing requirements over the plan
period?
Viability checklist
• Are your assessments of and strategies for housing,
employment and other uses integrated, and do they
take full account of relevant market and economic
signals?
• Have you assessed the likely cumulative impacts on
development in your area?
• Have you discussed viability with your key
stakeholders, under the duty to cooperate,
particularly with regard to those strategic priorities
set out in paragraph 156 of the NPPF?
Viability checklist
• Are affordable housing targets, thresholds and
proportions fully justified and supported by an
informed assessment of their economic viability; and
will sufficient affordable housing be delivered to meet
needs?
• Do you have an understanding of changing needs
and have you addressed barriers to investment in
the Local Plan, including a lack of housing,
infrastructure or viability?
• Can you demonstrate that district-wide
development/infrastructure costs have been
considered alongside production of your Local Plan?