Planning and Development Viability Delivering Sustainable Development John Wacher - CIL & Development Viability Manager

London Borough of Islington High levels of development Most densely populated authority in country and least amount of open space per capita Significant levels housing need and overcrowding High levels of affluence but 13th most deprived borough in UK & 5th in London. Plans for 15,000 new homes, 40,000 employees

National Planning Policy Framework Presumption in favour of sustainable development Development Plan Affordable housing Infrastructure Community facilities Environment Viability

NPPF & Viability CLG Commons Select Committee report on draft NPPF: The NPPF should make it clear that calculations of viability presuppose requirements to provide measures necessary to the development, such as infrastructure, not simply returns deemed acceptable by the developer. LGA: “the final NPPF needs to make clear that sustainability must always trump the need to reduce costs to ensure viability not the other way round” CPRE: concern that the language on viability would lead to developers arguing that they should not be required to deliver as much affordable housing in the future, because it is not viable for them to do so. POS: “The worst-case scenario for the local community is that they get the development but there is not enough value coming forward from the development to mitigate it in terms of roads and all the other facilities that are required”

“Lets get the planners off our backs!”

Where are we now? Two Years On…

A three-month study by the Bureau established that 60% of the biggest housing developments currently in the planning system are falling short of local affordable housing targets Over five years more than 2,300 affordable homes have been dropped from housing schemes across the UK despite being agreed during the planning process

Experiences of dealing with viability Challenges of: Resourcing Expertise Methodology/ Interpretation Reliability Transparency Outcomes

Viability Assessments Determining Affordable Housing levels and s106 requirements Development Values Build Costs Profit Targets Land Value

Residential Values Average new house price now £732,000, Annual increase 26% Qu3 UK Annual Price Growth 10.5%; London 21% Q (Nationwide) Land Registry © Crown copyright 2014

Land Value Two schools of thought: Land value determines extent of planning obligations/ CIL – ensure release of site Extent of planning obligations/ CIL determines land value – uplift in value arises from planning permission based on Development Plan

Market Value (with special assumption) - Market value – whatever people will pay - With assumption that policy is met - But what assumptions on value growth/ planning obligations? - Methodological issues – are other land transactions comparable? - Future policy changes Existing Use Value (plus premium) - Includes land owner’s incentive - More objective to assess - Copes better with policy assessment - Mayor’s Housing SPG

Confidentiality Transparency, public participation and scrutiny, accountability? Information Commissioners Office First Tier Tribunal Environmental Information Regulations Confidential? Harm/ Proper use Public interest ?

Environmental Information Regulations 2004 “Increased public access to environmental information and the dissemination of such information contribute to a greater awareness of environmental matters, a free exchange of views, more effective participation by the public in environmental decision making and, eventually, to a better environment.”

Problems with complex/ untransparent modelling Performance related pay - Fully available? - Timing of costs - Growth models

How to respond? Adopted Policies/ Guidance Manage process Joint working Review mechanism Statutory Declaration Oversight and reputation Awareness

Review Mechanisms ‘ Foregone’ requirements Full review or key inputs? ‘Split’ of surplus? Capped at policy requirements Pre-implementation and mid-term Outcome – affordability; units; contribution Whole development/ forward looking only? Camden, Waltham Forest, Islington, Newham, Hounslow, Wandsworth

Sustainable development and plan- led system Confidence in the process In long term interest of development industry Incentivising communities to accept development

Questions? Your experiences? Your responses? Other ideas?