Session 4: You have viability
evidence – so what?
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
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….
Potential Pitfalls
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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
Lack of developer/agent consultation/buy-in
Final policy wording
Out of date Local Plan adopted prior to NPPF
Savills research
• Looked at appeals data for major schemes in
the past 2 years for 190 authorities across
southern England
• Proportion of major appeals relating to
schemes of 10+ homes going against councils
has risen. 72% cent of schemes allowed
following inquiry (October - December 2012)
• Average of 5.7 years land supply
• 34% of LPAs in 20% buffer category
Bishops Cleeve, Tewkesbury,
Gloucestershire
1,000 homes – SoS decision letter said that the
most significant material consideration was the
requirement for a five-year housing land supply,
which he said could not be demonstrated
against the plan. Compliance with objectively
assessed housing needs is key.
DCS Number 100-078-098
Burgess Farm, Salford
350 homes on a greenfield site was allowed by the
SoS against the inspector's advice. Despite the
permanent loss of an area of open countryside and the
fact that the development would seriously degrade the
character and appearance of the area. SoS considered
that this was outweighed by the scheme's contribution
to reducing the significant shortfall of some 4,000
homes (2.5 years supply) against the five year housing
land requirement.
DCS Number 100-078-099
Preparing for the EiP
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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?
Taylor Review
“...we believe the following areas need immediate
attention:
• Creating appropriate guidance to underpin the Duty
to Cooperate
• Creating appropriate guidance regarding Viability, to
ensure planning authorities and developers have a
good mutual understanding of what this test requires.
• Updating the Strategic Housing Market Assessment
(SHMA) and Strategic Housing Land Availability
Assessment (SHLAA) guidance, to underpin the
delivery of the National Planning Policy Framework”
CLG steer
• Updated guidance expected July 2013
• Lord Taylor stated at CLG select committee
that:
– There is no ultimate answer on viability as it
is a contested area
– CLG will not promote one model but the
guidance may try and make sure that there
is a common language in which those
assessments can be made
Growth and Infrastructure Act
• Developers can make formal requests to
modify or discharge s106 affordable housing
obligations based on viability
• Clause 7 stipulates that for 3 years developers
can appeal if new proposals cannot be agreed
or if the LPA fails to determine the request
• "wherever possible, this should take the form
of an open book review of the original viability
appraisal" demonstrating the proposals are
not viable in current market conditions (DCLG)
Residual appraisal exercise 2
TEA BREAK
Guest speaker 4
And Finally
The Golden rules of viability testing:
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Transparency
Evidence based
Simple
Guidance
Objectives
• to improve your knowledge of:
 viability and its relevance in planning and
 the viability evidence you require to fulfil your planning role
• For procurement – to improve the procurement
outcome for your authority?
• Make you more confident discussing, and
negotiating upon, viability related to development
and planning
Contact us
Email
[email protected]
[email protected]
Web
www.pas.gov.uk
Phone 020 7664 3187
Simon Drummond-Hay
Email [email protected]
Phone 015242 76205 / 07989 975 977
David Carlisle
Email [email protected]
Phone 020 7821 4194 / 07827353558