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02/04/2015

Zen and the art of viability assessment

Buddha

The system of viabiliity assessment isn't working as it should, argues Andrew Beharrell. It's time for a review to bring certainty to the system of public gain from development, and reduce tension between developers and the public

Andrew BeharrellI have just returned from the Himalayas. Exposure to different cultures puts in perspective how we do things at home. I’m sure Nepal has a planning system, but there’s little evidence of development control in action. But in Bhutan each new building must be designed in the traditional style.

Britain has evolved an extraordinarily complex system for regulating planning and development – especially in my own field of residential and mixed-use regeneration in London and the South East. Even the Buddha with a thousand arms and eyes is not so controlling and all-seeing.

The NPPF, the Red Tape Challenge and the Housing Standard Review cut through some confusing and contradictory rules and processes, but there’s a lot left to do.

Top of my list is reform of the way that affordable housing is procured through s.106 obligations. I remember when the idea entered local planning policies in the 1990s with a typical call for 15 per cent social housing on schemes of 25 homes or more.

But targets crept up, thresholds were reduced and the cost per home to the developer increased as grant levels fell. In 2004 Mr Livingstone introduced his 50 per cent target and, soon after, global recession made it unthinkable, except for heavily subsidised developments.
Enter the viability assessment to save the day by providing a balanced and transparent way to establish the true potential of each project to deliver affordable homes and other public benefits.

"We need calm analysis of how the system is working and a review of the way forward"

It’s not working! Pollard Thomas Edwards deals with about 20 big applications a year, each one an ‘exception’ requiring a viability assessment and specialists appointed to argue the case for both sides.  
We often see delays of a year, while fees, interest costs and frustrations mount.

The 2012 RICS Guidance (Financial Viability in Planning) promised to bring clarity – it has not.

Land prices are distorted and hard to call because bidders must guess how future viability negotiations will fall out. If they factor in full policy compliance they stand no chance of securing sites, and discretionary vendors will withdraw from the market.

This fuels mistrust between developers, planning officers, councillors and the public, who suspect that the truth is being hidden behind confidentiality agreements. Planning committees are refusing to believe the conclusions of their advisers.

We need calm analysis of how the system is working and a review of the way ahead. Viability assessment is probably inevitable for complex developments delivering alternative benefit, but in principle I’d welcome a return to fixed non-negotiable targets for most applications.

Targets would need to be location-specific, reviewed regularly and set at a realistic level: 15 per cent of something is better than 50 per cent of nothing

Andrew Beharrell is a senior partner at architectural practice Pollard Thomas Edwards

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