1. INTRODUCING CIL AND DEALING WITH SCHEME SPECIFIC VIABILITY ISSUES – BRISTOL’S APPROACH Jim Cliffe Planning Obligations Manager Bristol City Council

2. CIL Principles! Keep it simple – there are not many benefits to making CIL complicated but there are dis-benefits: Keep it simple – there are not many benefits to making CIL complicated but there are dis-benefits: –Higher risk of successful challenge –It will almost certainly take longer to implement –Higher chance of errors in calculating, monitoring and enforcing CIL

5. CIL Principles! Do it quickly – there is no reason for it to take a long time. The longer it takes the higher the likelihood of regulations (and governments) changing, and your viability study going out of date Do it quickly – there is no reason for it to take a long time. The longer it takes the higher the likelihood of regulations (and governments) changing, and your viability study going out of date

6. Bristol’s CIL Programme Aug 2011 – commission viability study Aug 2011 – commission viability study 28 Nov 2011 to 20 Jan 2012 – Preliminary Draft Charging Schedule consultation 28 Nov 2011 to 20 Jan 2012 – Preliminary Draft Charging Schedule consultation 2 to 30 March 2012 – Draft Charging Schedule consultation 2 to 30 March 2012 – Draft Charging Schedule consultation 18 April 2012 – submit to PINS 18 April 2012 – submit to PINS 20 and 21 June 2012 – CIL Examination 20 and 21 June 2012 – CIL Examination 12 July 2012 – receive examiners report 12 July 2012 – receive examiners report 1 January 2013 – implementation day 1 January 2013 – implementation day

7. CIL Principles! Don’t be greedy – be generous with developers costs, cautious with sales values, and leave a significant viability buffer Don’t be greedy – be generous with developers costs, cautious with sales values, and leave a significant viability buffer

8. What the inspector wants Development typeMaximum viable CIL rate Proposed CIL rate CIL as % of maximum viable rate CIL as % of Costs CIL as % of GDV Inner Zone Residential £130£70542.21.9 Outer Zone Residential £90£50561.61.5 Retail£250£120484.53.4 Student Housing£220£100453.22.8 Hotel£160£70441.91.8

9. CIL Principles! When setting residential CIL rates we followed the following mantra “Our CIL rates will be set at a level that will not make residential development that is currently policy compliant and viable, unviable” ….. When setting residential CIL rates we followed the following mantra “Our CIL rates will be set at a level that will not make residential development that is currently policy compliant and viable, unviable” ….. ….. and we didn’t worry too much about residential development that is unviable even with no CIL ….. and we didn’t worry too much about residential development that is unviable even with no CIL

10. CIL Principles Think very carefully about how to deal with strategic sites – they may well need a lower or even a £nil CIL rate due to the infrastructure requirement, but …. Think very carefully about how to deal with strategic sites – they may well need a lower or even a £nil CIL rate due to the infrastructure requirement, but …. As a general rule keep differential rates to a minimum, particularly differential rates for different levels of the same development type As a general rule keep differential rates to a minimum, particularly differential rates for different levels of the same development type

11. So how does this help with understanding viability? Your CIL viability study will provide large amounts of information on costs and values that you can use as a reference point in dealing with site-specific viability appraisals.

12. Build and other developer costs Build costs £1,260 / sq. metre (gross) for flats £1,482 / sq. metre (net) for flats £906 / sq. metre for houses External works 15% addition to base build costs Code for Sustainable Homes uplift above base costs (to achieve CSH 4) 6% addition to base build costs Gross to net ratio for flats 85% Profit 20% on private housing GDV 6% on affordable housing GDV Professional fees (including planning costs) 10% of build costs Contingency 5% of build costs Agents fee 1% of land value Legal fee 0.8% of land value Stamp duty 4% of land value Marketing costs 4% of GDV Legal sales fee £600 per unit Interest6.5%

13. Sales Values ZoneValue / sq.mValue / sq.ft Inner West£3,993£371 Inner East£3,496£325 South£2,960£275 North West£3,100£288 North£2,723£253 EastEast£2,626£244

14. Other viability information available due to CIL Once CIL is implemented you need access to BCIS data, which provides up to date costs data Sales prices are available on the Land Registry web site, and for all consents granted after CIL was implemented the GIA is known, therefore you can start building up a dataset of sales values per square metre

15. How can planning officers use this information? When site specific viability appraisals are received, the inputs can be compared with known sales values (CIL and Land Registry) and costs (CIL and BCIS) When site specific viability appraisals are received, the inputs can be compared with known sales values (CIL and Land Registry) and costs (CIL and BCIS) Where there are significant variances, these are likely to be the areas to focus on when assessing the appraisal Where there are significant variances, these are likely to be the areas to focus on when assessing the appraisal

16. Benefits of this approach Planning officers have a better understanding of the issues, are able to engage more confidently with professional advisors and play a greater role in taking the issue forward Planning officers have a better understanding of the issues, are able to engage more confidently with professional advisors and play a greater role in taking the issue forward Over time, planning officers start to build up a level of expertise, that may on occasion negate the need for external advice! Over time, planning officers start to build up a level of expertise, that may on occasion negate the need for external advice!

17. Site Specific Viability – Issues for Bristol We had no structured process in place for dealing with viability appraisals We had no structured process in place for dealing with viability appraisals We spent lots of time and resource disputing viability appraisals, whilst making little progress towards resolving differences We spent lots of time and resource disputing viability appraisals, whilst making little progress towards resolving differences We sometimes forgot the bigger picture and spent too much time and effort focussing on the cost of taps and flooring We sometimes forgot the bigger picture and spent too much time and effort focussing on the cost of taps and flooring

18. 3 Stage approach – Stage 1 Identify issues of concern Identify issues of concern Commission consultant Commission consultant Consultant assesses viability appraisal and reports back to Council – no meetings with applicant at this stage Consultant assesses viability appraisal and reports back to Council – no meetings with applicant at this stage If necessary, consultant undertakes their own appraisal based on nil affordable housing, to see what excess there is that could be applied to affordable housing If necessary, consultant undertakes their own appraisal based on nil affordable housing, to see what excess there is that could be applied to affordable housing

19. 3 Stage approach – Stage 1 If the consultant agrees with the level of affordable housing the applicant claims can be afforded the issue is concluded. If the consultant agrees with the level of affordable housing the applicant claims can be afforded the issue is concluded. Stage 1 is completed within a month Stage 1 is completed within a month

20. 3 Stage approach – Stage 2 Meetings held with applicant to try to understand areas of difference and see if an agreed position can be reached Meetings held with applicant to try to understand areas of difference and see if an agreed position can be reached Stage 2 has a cut off time of a month Stage 2 has a cut off time of a month

21. 3 Stage approach – Stage 3 If agreement cannot be reached, the Council offers independent arbitration to look solely at the areas of disagreement, and agrees to accept the view of the arbiter If agreement cannot be reached, the Council offers independent arbitration to look solely at the areas of disagreement, and agrees to accept the view of the arbiter Council and applicant each put their case to the arbiter in writing and have the option of one meeting with the arbiter Council and applicant each put their case to the arbiter in writing and have the option of one meeting with the arbiter Stage 3 is completed within a month Stage 3 is completed within a month

22. Benefits of the staged approach We don’t spend months arguing about areas of difference whilst making no progress We don’t spend months arguing about areas of difference whilst making no progress Applicants know where they stand Applicants know where they stand Helps the Council deliver consents in a timely manner Helps the Council deliver consents in a timely manner Offer of arbitration lessens the chances of appeals on viability grounds Offer of arbitration lessens the chances of appeals on viability grounds