The end of viability assessment?

Well, the DCLG seems to have chucked quite a few (proposed) grenades into the planning system last Thursday in their consultation document Planning for the Right Homes in the Right Places.  The proposed changes to the use of viability assessments in the planning system seem to have really come out of the blue.  Some strong words (my underlining)

Stakeholders have told us that the use of viability assessments in planning permission negotiations has expanded to a degree that it causes complexity and uncertainty and results in fewer contributions for infrastructure and affordable housing than required by local policies…the range and complexity of variables in assessing this are such that the process is seen as being susceptible to gaming; and is often viewed with suspicion by authorities, communities and other observers. In particular, estimating future values and costs can be manipulated to reflect a range of outcomes. Furthermore, appraisals are often not published on the grounds of commercial confidentiality. This means that the process is neither easily understood nor transparent.

The key wording seems to be

We propose to make clear in the National Planning Policy Framework that where policy requirements have been tested for their viability, the issue should not usually need to be tested again at the planning application stage (me again).

Given the “not usually” get-out, then this seems to be proposing to rule out the (ab)use of (biased) viability assessments to justify non-compliance with policy.  However, it’s notable that they are seeking advice on how viability assessments can be improved and made more transparent – perhaps a hint that they will be with us for longer.

It’s interesting that they are also seeking guidance on how to “publicise” the developer contributions secured through s106 and CIL.  I’d certainly recommend that the estimated cash value of planning obligations such as affordable housing, provision of education or health facilities etc.  should be made explicit during a planning application.

For instance, let’s say that 25% of affordable housing is being provided on a greenfield site in the south east of England where density equates to 40 three bedroom units per hectare and the average house price is £300,000.  That’s 10 affordable homes worth approximately £3,000,000.  Assuming that the developer is able to recoup half of the £3,000,000 by selling them to a housing association, that’s still £1,500,000 per hectare secured through planning obligations from affordable housing.  It would be transparent to set out the cash value of any planning obligations at the application stage.

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