Assessing Development Viability In Difficult Times: The Local
Authority Perspective Anthony Hodge & Victoria Carr Cheshire
West and Chester Council
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Demand/Supply Forecast population increase by 11% (ONS) SHMA
concluded an annual shortfall of circa 2,700 market dwellings and
1,300 affordable dwellings pa 2010/11 - 654 new homes completed, of
which 306 were affordable homes which benefited from public sector
subsidy. As a consequence, in 2010/11 only 348 market homes were
completed
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Affordability December 2006 December 2007 December 2008
December 2009 December 2010 December 2011 1 bed Prices (Flat)
94,203102,96792,78994,67282,56687,722 2 bed Prices (Flat)
139,378139,760137,001128,731134,764124,578 2 bed Prices (House)
136,967141,759137,785136,243140,121132,343 3 bed Prices (House)
174,504177,937180,126177,379180,307170,809 4 bed Prices (House)
301,609322,208306,409311,571304,973302,033 Source: Hometrack
Average Property Prices in Cheshire West and Chester
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Affordability
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A Developers View Affordable housing requirements too onerous
Viability assessments local authority in the dark Commercially
sensitive information Timescale Members
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Fixing the Process Appointed in-house resource (MRICS)
Introduction of service to key teams Lead on viability negotiations
and assessments Provides direct advice to Development Management
Development of Viability Checklist, Values and Costings Database,
Use of viability software One point of contact, one consistent
approach
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Handling Assessments How can we ensure that we are in a strong
negotiating position? Build a strong evidence base of local costs
and values Talk to the market Keep track of approved developments
(did they achieve the values anticipated?) Strong Market Knowledge
= Strong Negotiating Position
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Handling Assessments Internal note - initial guidance to
Development Management Seek specialist advice where necessary
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Site Issues Long-term developments & Marginal Sites Use of
software to build in uplift Use of overage clauses in sc106-some
reluctance
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Some Examples Rural Housing Sites, Cheshire (affordable
housing) Costs for historic building-sourced from generic report
Commercial Site, Northwich (sc106) Evidence provided in relation to
abnormal costs Checked with site-owner at time of purchase, some of
these were known abnormals at time of site purchase Worked with
Agents to negotiate value inputs All third party cost quotes
provided
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..but is it just about viability 6,000 units with planning
approval Schemes for 3,000 units coming into the system