Viability again

There’s a very good piece by Oliver Wainwright in The Guardian on the (ab)use of viability appraisals by developers who are trying to reduce the amount of affordable housing that they are required to provide. I first came across the use of viability appraisals in the planning system in 2008 when a planning consultant that I know well showed me a development appraisal and asked me whether I knew what they were. Apparently one of their clients was almost apoplectic about being asked by a local planning authority to “open up their books” i.e. provide some supporting financial analysis and provide some evidence about why they could not comply with the affordable housing policy. Developers adapted and learned pretty fast how to shape and turn the viability processes to their advantage. In effect, they’ve been able to exploit the intrinsic uncertainty in appraisal inputs and the absence of strong ‘rules’ on viability modelling to enhance their returns and their competitiveness. I don’t see why the behaviour of developers should be a surprise here. There’s a lot of money at stake for them and for land owners (who can be the developers as well). It’s the response of central and local government that’s largely been inadequate. In my view, it’s the role of central government to create clear and comprehensive guidance here instead of leaving each local authority to be picked off.


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