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

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 Appraisal considerations

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 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buffer on 5 year supply Onerous discretionary policies Lack of developer/agent consultation/buy-in Final policy wording Out of date Local Plan adopted prior to NPPF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

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

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?

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: 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 Web Phone Simon Drummond-Hay Phone / David Carlisle Phone /