Planning and Development Viability

Delivering Sustainable Development

John Wacher - S106 & 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

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”

Where are we now?

Three Years On…

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CLG Select Committee – Operation of the NPPF 2014

“Provisions in the NPPF relating to the viability of housing land are leading to inappropriate development: these loopholes must be closed.”

“We recommend that the Government issue guidance making clear that assessments of site viability should consider not only current prices and costs but projections of prices and costs over the next five years. The guidance should state that assessments should be transparent, that is 'open-book', so that the developers' finances in relation to the specific site are open to scrutiny, and consider developers' own projections for future viability. In addition, the Government should work with local authorities and the house building industry to agree the wording of new guidance setting out a standard approach to determining viability.”

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• Timing of costs/ income

Residential Values

•Average new house price now £732,000, Annual increase 26% Qu3

•UK Annual Price Growth 10.5%; London 21% Q3 2014 (Nationwide)

Land Registry © Crown copyright 2014

How to respond?

• Adopted Policies/ Guidance

• Manage process• Transparency• Joint working• Review

mechanism• Statutory

Declaration• Oversight and

reputation

• Sustainable development and plan-led system

• Confidence in the process

• In long term interest of development industry

Incentivising communities to accept development