Session 4: You have viability
evidence – so what?
Consultation
• Why
• Who with
• When
• So what and what do you do with the results?
Consultations Engagement
• A fundamental part of plan making and a
requirement of NPPF, CIL Regs, Harman
Guidance
• Don’t be afraid to ask the developers– For some evidence to support figures
– To explain / for detail
• Record process and comments
METICULOUSLY
• What have you actually asked and is it in the
context of delivering the development plan
Engagement Phases
• Delay at your peril
• Two or three stages
Stage 1 Engagement
• Background and why
– Methodology
– Viability test
– Appraisal assumptions
• Not results
• Certainly not policy
Stage 1 includes establishing agreement on
methodology and assumptions (build costs, sale
prices etc.) Does not include workings.
Stage 2 Engagement
• Changes made from first consultation (or not)
– Methodology
– Viability test
– Appraisal assumptions
• Draft Results
• Emerging conclusions
• Still not policy
Stage 3 Engagement
• Results
• Factors other than viability to consider
• Emerging and developing policy
• Changes to existing policy
• Approve now or hang on?
WPV & plans found sound in 2014
Local Authority Developer’s Profit Threshold Land Value
Barbergh 17% £370,000/ha
Cannock Chase 20% on GDV £100,000-£400,000/ha
Christchurch & East
Dorset
20% on GDC £308,000/ha (un-serviced)
£1,235,000/ha (serviced)
East Hampshire 20% market/6% Affordable £450,000/ha
Erewash 17% £300,000/ha
Fenland 15-20% £1-2m/ha (serviced)
GNDP 20% market/17.5% large sites/6%
Affordable
£370,000-£430,000/ha
Reigate & Banstead 17.5% market/6% Affordable £500,000/ha
Stafford 20% (comprising 5% for internal
overheads).
£250,000/ha
Staffordshire Moorlands 17.5% market/6% Affordable £1.26-£1.41m/ha (serviced)
Warrington 17.5% £100,000-£300,000/ha
Confidentiality
• FOI Act 2000 (Sections 41 and 43(2))
• Environmental Information Regulations 12(5)(e)
• R (English) v East Staffordshire Borough Council and Anor
(2010 EWHC 2744
• Heygate Decision (2014)
• Recent ICO Decisions (2012-2014)
• RICS GN – Paragraph 4.3
• “This viability report is provided on a confidential basis to the Council. We
therefore request that the report should not be disclosed to any third
parties (other than consultants instructed by the Council to review this
report) under the Freedom of Information Act 2000 (sections 41 and 43(2))
or under the Environmental Information Regulations.” (para 4.3.3)
• Planning Performance Agreements
Case study: South Worcestershire
Case Study – South Worcestershire
Local Plan
No additional requirements
• No affordable housing
• Built to Building Regulations (Part L)
• Density informed by consultation with officers and
developers – lower than policy to reflect current
delivery (targets assume high content of flats etc)
• Greenfield sites over 1 hectare have 40% open
space
• No CIL or s106
• All other requirements over high quality and locally
distinctive design and safe design remain
No additional requirements
Alternative
Land Value
Viability
Threshold
Residual Value Alternative
Land Value
Viability
Threshold
Residual Value Alternative
Land Value
Viability
Threshold
Residual Value
Site 1 25,000 280,000 650,432 0 0 0 25,000 280,000 621,823
Site 2 25,000 280,000 621,867 0 0 0 25,000 280,000 596,858
Site 3 25,000 280,000 995,236 0 0 0 25,000 280,000 932,853
Site 4 25,000 280,000 1,126,237 25,000 280,000 994,779 25,000 280,000 1,060,508
Site 5 0 0 0 25,000 280,000 922,171 25,000 280,000 1,596,523
Site 6 0 0 0 350,000 420,000 757,823 350,000 420,000 2,315,869
Site 7 0 0 0 350,000 420,000 1,347,757 0 0 0
Site 8 350,000 420,000 1,626,764 350,000 420,000 2,639,944 350,000 420,000 3,154,171
Site 9 350,000 420,000 1,453,344 350,000 420,000 1,453,344 350,000 420,000 1,312,746
Site 10 25,000 280,000 2,426,809 25,000 280,000 2,232,961 25,000 280,000 1,145,242
Site 11 50,000 310,000 1,881,763 50,000 310,000 2,236,383 50,000 310,000 1,881,763
Site 12 350,000 420,000 2,237,069 350,000 420,000 2,377,585 350,000 420,000 1,393,974
Site 13 350,000 420,000 1,211,920 350,000 420,000 464,046 350,000 420,000 1,964,321
Site 14 750,000 900,000 2,132,497 750,000 900,000 1,476,716 750,000 900,000 3,728,997
Site 15 50,000 310,000 1,714,651 0 0 0 50,000 310,000 2,651,247
Site 16 50,000 310,000 805,244 0 0 0 50,000 310,000 1,398,921
Urban Flats
Viability Appraisals. Alternative / Viability Threshold compared with Residual Values (£/ha)
Malvern Hills Worcester Wychavon
SUE 1
SUE 2
Greenfield 1
Greenfield 2
Greenfield 3
Brownfield redev. L
Town Village Infill
Small Village Scheme
Village House
Brownfield redev. M
Medium Brownfield
Medium greenfield
Urban edge
Town centre flats
Ex garage site
Build Standards• Code for Sustainable Homes Level 4 from April 2013
– Add 6% to cost of house
• SWLP 26 Renewable and Low Carbon Energy(a) All new developments will be required to incorporate the
generation of energy…by at least 10%.
(b) All new development (as part of the major developments)
will be required to incorporate the generation of
energy…by at least 20%.
– Add 2.5% to cost of house (+/- £2,500 /dwelling)
• NOT JUST REDUCING USE – ACTUALLY ABOUT
GENERATION
• NO EVIDENCE OF ANY PRICE BENEFIT FROM
REDUCED ENERGY BILLS
CfSH Level 4 + Onsite Generation
Alternative
Land Value
Viability
Threshold
Residual Value Alternative
Land Value
Viability
Threshold
Residual Value Alternative
Land Value
Viability
Threshold
Residual Value
Site 1 25,000 280,000 535,926 0 0 0 25,000 280,000 507,317
Site 2 25,000 280,000 521,654 0 0 0 25,000 280,000 496,645
Site 3 25,000 280,000 872,062 0 0 0 25,000 280,000 809,678
Site 4 25,000 280,000 995,676 25,000 280,000 864,218 25,000 280,000 929,947
Site 5 0 0 0 25,000 280,000 779,958 25,000 280,000 1,454,311
Site 6 0 0 0 350,000 420,000 484,376 350,000 420,000 2,037,874
Site 7 0 0 0 350,000 420,000 524,622 0 0 0
Site 8 350,000 420,000 1,311,267 350,000 420,000 2,349,470 350,000 420,000 2,841,637
Site 9 350,000 420,000 1,199,472 350,000 420,000 1,199,472 350,000 420,000 1,057,528
Site 10 25,000 280,000 1,762,806 25,000 280,000 1,607,728 25,000 280,000 735,859
Site 11 50,000 310,000 1,674,752 50,000 310,000 2,029,372 50,000 310,000 1,674,752
Site 12 350,000 420,000 1,941,730 350,000 420,000 2,082,246 350,000 420,000 1,120,071
Site 13 350,000 420,000 995,333 350,000 420,000 235,519 350,000 420,000 1,738,024
Site 14 750,000 900,000 1,922,648 750,000 900,000 1,266,867 750,000 900,000 3,523,165
Site 15 50,000 310,000 1,512,381 0 0 0 50,000 310,000 2,500,000
Site 16 50,000 310,000 722,386 0 0 0 50,000 310,000 1,316,871
Town Village Infill
Small Village Scheme
Village House
Brownfield redev. M
Medium Brownfield
Medium greenfield
Urban edge
Town centre flats
Ex garage site
Urban Flats
Viability Appraisals. Alternative / Viability Threshold compared with Residual Values (£/ha)
Malvern Hills Worcester Wychavon
SUE 1
SUE 2
Greenfield 1
Greenfield 2
Greenfield 3
Brownfield redev. L
Affordable Housing
• 15 or more 40%
• 10 – 14 30%
• 5 – 9 20%
As social rented, affordable rented and
intermediate tenure and provided on site
NOT TESTED Less than 5, a financial
contribution will be required.
Affordable Housing
Alternative
Land Value
Viability
Threshold
Residual Value Alternative
Land Value
Viability
Threshold
Residual Value Alternative
Land Value
Viability
Threshold
Residual Value
Site 1 25,000 280,000 332,757 0 0 0 25,000 280,000 195,205
Site 2 25,000 280,000 324,151 0 0 0 25,000 280,000 203,879
Site 3 25,000 280,000 574,023 0 0 0 25,000 280,000 405,338
Site 4 25,000 280,000 656,141 25,000 280,000 453,169 25,000 280,000 478,409
Site 5 0 0 0 25,000 280,000 379,850 25,000 280,000 769,128
Site 6 0 0 0 350,000 420,000 -448 350,000 420,000 906,356
Site 7 0 0 0 350,000 420,000 -1,163,134 0 0 0
Site 8 350,000 420,000 951,958 350,000 420,000 1,239,168 350,000 420,000 1,513,254
Site 9 350,000 420,000 625,000 350,000 420,000 361,330 350,000 420,000 245,641
Site 10 25,000 280,000 1,464,601 25,000 280,000 1,100,887 25,000 280,000 419,301
Site 11 50,000 310,000 1,259,642 50,000 310,000 1,341,269 50,000 310,000 1,071,326
Site 12 350,000 420,000 1,357,721 350,000 420,000 1,630,041 350,000 420,000 844,132
Site 13 350,000 420,000 872,319 350,000 420,000 144,924 350,000 420,000 1,333,809
Site 14 750,000 900,000 2,132,497 750,000 900,000 1,476,716 750,000 900,000 3,728,997
Site 15 50,000 310,000 1,714,651 0 0 0 50,000 310,000 2,651,247
Site 16 50,000 310,000 805,244 0 0 0 50,000 310,000 1,398,921
Urban Flats
Viability Appraisals. Alternative / Viability Threshold compared with Residual Values (£/ha)
Malvern Hills Worcester Wychavon
SUE 1
SUE 2
Greenfield 1
Greenfield 2
Greenfield 3
Brownfield redev. L
Town Village Infill
Small Village Scheme
Village House
Brownfield redev. M
Medium Brownfield
Medium greenfield
Urban edge
Town centre flats
Ex garage site
Density
• Density informed by consultation – lower than
policy
• Greenfield sites over 1 hectare have 40%
open space
• Brownfield sites NO Public Open Space
• Greenfield sites less than 1ha but more than 5
units 20% open space
Affordable Housing, Density,
CfSH4, Onsite Generation, ‘No’ CIL
Alternative
Land Value
Viability
Threshold
Residual Value Alternative
Land Value
Viability
Threshold
Residual Value Alternative
Land Value
Viability
Threshold
Residual Value
Site 1 25,000 280,000 218,251 0 0 0 25,000 280,000 80,699
Site 2 25,000 280,000 223,909 0 0 0 25,000 280,000 103,637
Site 3 25,000 280,000 450,848 0 0 0 25,000 280,000 282,163
Site 4 25,000 280,000 525,581 25,000 280,000 322,609 25,000 280,000 347,849
Site 5 0 0 0 25,000 280,000 239,889 25,000 280,000 626,916
Site 6 0 0 0 350,000 420,000 -292,137 350,000 420,000 634,317
Site 7 0 0 0 350,000 420,000 -2,048,052 0 0 0
Site 8 350,000 420,000 633,442 350,000 420,000 932,511 350,000 420,000 1,197,757
Site 9 350,000 420,000 361,544 350,000 420,000 89,196 350,000 420,000 -30,053
Site 10 25,000 280,000 991,346 25,000 280,000 701,754 25,000 280,000 151,304
Site 11 50,000 310,000 1,050,650 50,000 310,000 1,132,277 50,000 310,000 862,335
Site 12 350,000 420,000 1,083,111 350,000 420,000 1,334,701 350,000 420,000 548,379
Site 13 350,000 420,000 643,792 350,000 420,000 -83,603 350,000 420,000 1,107,512
Site 14 750,000 900,000 1,922,648 750,000 900,000 1,266,867 750,000 900,000 3,523,165
Site 15 50,000 310,000 1,512,381 0 0 0 50,000 310,000 2,500,000
Site 16 50,000 310,000 722,386 0 0 0 50,000 310,000 1,316,871
Urban Flats
Viability Appraisals. Alternative / Viability Threshold compared with Residual Values (£/ha)
Malvern Hills Worcester Wychavon
SUE 1
SUE 2
Greenfield 1
Greenfield 2
Greenfield 3
Brownfield redev. L
Town Village Infill
Small Village Scheme
Village House
Brownfield redev. M
Medium Brownfield
Medium greenfield
Urban edge
Town centre flats
Ex garage site
Uncertain MarketAverage Prices
Uncertain MarketIndexed turn over (from January 2006)
5% fall in prices
Alternative
Land Value
Viability
Threshold
Residual Value Alternative
Land Value
Viability
Threshold
Residual Value Alternative
Land Value
Viability
Threshold
Residual Value
Site 1 25,000 280,000 147,873 0 0 0 25,000 280,000 11,615
Site 2 25,000 280,000 160,872 0 0 0 25,000 280,000 41,742
Site 3 25,000 280,000 368,502 0 0 0 25,000 280,000 201,689
Site 4 25,000 280,000 436,846 25,000 280,000 240,000 25,000 280,000 261,086
Site 5 0 0 0 25,000 280,000 152,118 25,000 280,000 518,310
Site 6 0 0 0 350,000 420,000 -446,987 350,000 420,000 441,647
Site 7 0 0 0 350,000 420,000 -2,437,676 0 0 0
Site 8 350,000 420,000 448,113 350,000 420,000 707,161 350,000 420,000 968,147
Site 9 350,000 420,000 180,971 350,000 420,000 -94,939 350,000 420,000 -209,804
Site 10 25,000 280,000 847,322 25,000 280,000 566,416 25,000 280,000 34,147
Site 11 50,000 310,000 862,693 50,000 310,000 931,789 50,000 310,000 687,536
Site 12 350,000 420,000 842,438 350,000 420,000 1,079,959 350,000 420,000 305,335
Site 13 350,000 420,000 436,110 350,000 420,000 -260,893 350,000 420,000 880,348
Site 14 750,000 900,000 1,648,413 750,000 900,000 1,035,523 750,000 900,000 3,172,312
Site 15 50,000 310,000 1,265,299 0 0 0 50,000 310,000 2,204,210
Site 16 50,000 310,000 611,018 0 0 0 50,000 310,000 1,188,105
Town Village Infill
Small Village Scheme
Village House
Brownfield redev. M
Medium Brownfield
Medium greenfield
Urban edge
Town centre flats
Ex garage site
Urban Flats
Viability Appraisals. Alternative / Viability Threshold compared with Residual Values (£/ha)
Malvern Hills Worcester Wychavon
SUE 1
SUE 2
Greenfield 1
Greenfield 2
Greenfield 3
Brownfield redev. L
Alternative
Land Value
Viability
Threshold
MALVERN HILLS No
Req
uire
men
t
CfS
H4
+ 2.
5%
Aff
ord
able
Targ
et
Aff
ord
able
,
CfS
H4
+2.5
%
and
Den
sity
Aff
ord
able
,
CfS
H4
+2.5
%
and
Den
sity
Pric
es le
ss 5
%
Site 1 SUE 1 25,000 280,000 650,432 535,926 332,757 218,251 147,873
Site 2 SUE 2 25,000 280,000 621,867 521,654 324,151 223,909 160,872
Site 3 Greenfield 1 25,000 280,000 995,236 872,062 574,023 450,848 368,502
Site 4 Greenfield 2 25,000 280,000 1,126,237 995,676 656,141 525,581 436,846
Site 5 Greenfield 3 0 0 0 0 0 0 0
Site 6 Brownfield redev. L 0 0 0 0 0 0 0
Site 7 Urban Flats 0 0 0 0 0 0 0
Site 8 Brownfield redev. M 350,000 420,000 1,626,764 1,311,267 951,958 633,442 448,113
Site 9 Medium Brownfield 350,000 420,000 1,453,344 1,199,472 625,000 361,544 180,971
Site 10 Medium greenfield 25,000 280,000 2,426,809 1,762,806 1,464,601 991,346 847,322
Site 11 Urban edge 50,000 310,000 1,881,763 1,674,752 1,259,642 1,050,650 862,693
Site 12 Town centre flats 350,000 420,000 2,237,069 1,941,730 1,357,721 1,083,111 842,438
Site 13 Ex garage site 350,000 420,000 1,211,920 995,333 872,319 643,792 436,110
Site 14 Town Village Infill 750,000 900,000 2,132,497 1,922,648 2,132,497 1,922,648 1,648,413
Site 15 Small Village Scheme 50,000 310,000 1,714,651 1,512,381 1,714,651 1,512,381 1,265,299
Site 16 Village House 50,000 310,000 805,244 722,386 805,244 722,386 611,018
WORCESTER CITY
Site 1 SUE 1 0 0 0 0 0 0 0
Site 2 SUE 2 0 0 0 0 0 0 0
Site 3 Greenfield 1 0 0 0 0 0 0 0
Site 4 Greenfield 2 25,000 280,000 994,779 864,218 453,169 322,609 240,000
Site 5 Greenfield 3 25,000 280,000 922,171 779,958 379,850 239,889 152,118
Site 6 Brownfield redev. L 350,000 420,000 757,823 484,376 -448 -292,137 -446,987
Site 7 Urban Flats 350,000 420,000 1,347,757 524,622 -1,163,134 -2,048,052 -2,437,676
Site 8 Brownfield redev. M 350,000 420,000 2,639,944 2,349,470 1,239,168 932,511 707,161
Site 9 Medium Brownfield 350,000 420,000 1,453,344 1,199,472 361,330 89,196 -94,939
Site 10 Medium greenfield 25,000 280,000 2,232,961 1,607,728 1,100,887 701,754 566,416
Site 11 Urban edge 50,000 310,000 2,236,383 2,029,372 1,341,269 1,132,277 931,789
Site 12 Town centre flats 350,000 420,000 2,377,585 2,082,246 1,630,041 1,334,701 1,079,959
Site 13 Ex garage site 350,000 420,000 464,046 235,519 144,924 -83,603 -260,893
Site 14 Town Village Infill 750,000 900,000 1,476,716 1,266,867 1,476,716 1,266,867 1,035,523
Site 15 Small Village Scheme 0 0 0 0 0 0 0
Site 16 Village House 0 0 0 0 0 0 0
WYCHAVON
Site 1 SUE 1 25,000 280,000 621,823 507,317 195,205 80,699 11,615
Site 2 SUE 2 25,000 280,000 596,858 496,645 203,879 103,637 41,742
Site 3 Greenfield 1 25,000 280,000 932,853 809,678 405,338 282,163 201,689
Site 4 Greenfield 2 25,000 280,000 1,060,508 929,947 478,409 347,849 261,086
Site 5 Greenfield 3 25,000 280,000 1,596,523 1,454,311 769,128 626,916 518,310
Site 6 Brownfield redev. L 350,000 420,000 2,315,869 2,037,874 906,356 634,317 441,647
Site 7 Urban Flats 0 0 0 0 0 0 0
Site 8 Brownfield redev. M 350,000 420,000 3,154,171 2,841,637 1,513,254 1,197,757 968,147
Site 9 Medium Brownfield 350,000 420,000 1,312,746 1,057,528 245,641 -30,053 -209,804
Site 10 Medium greenfield 25,000 280,000 1,145,242 735,859 419,301 151,304 34,147
Site 11 Urban edge 50,000 310,000 1,881,763 1,674,752 1,071,326 862,335 687,536
Site 12 Town centre flats 350,000 420,000 1,393,974 1,120,071 844,132 548,379 305,335
Site 13 Ex garage site 350,000 420,000 1,964,321 1,738,024 1,333,809 1,107,512 880,348
Site 14 Town Village Infill 750,000 900,000 3,728,997 3,523,165 3,728,997 3,523,165 3,172,312
Site 15 Small Village Scheme 50,000 310,000 2,651,247 2,500,000 2,651,247 2,500,000 2,204,210
Site 16 Village House 50,000 310,000 1,398,921 1,316,871 1,398,921 1,316,871 1,188,105
Residual Value
Cumulative Impact
of Policies
Affordable Housing,
Density, CfSH4,
Onsite Generation
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
Potential Pitfalls
• Out of date Local Plan adopted prior to NPPF
• 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
• Approach to viability out of sync with
RICS/Harman/Draft DCLG guidance website
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….
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?