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Assessing Development Viability In Difficult Times: The Local Authority Perspective

Assessing Development Viability In Difficult Times: The Local Authority Perspective. Anthony Hodge & Victoria Carr Cheshire West and Chester Council. Demand/Supply. Forecast population increase by 11% (ONS)

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Assessing Development Viability In Difficult Times: The Local Authority Perspective

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  1. Assessing Development Viability In Difficult Times: The Local Authority Perspective Anthony Hodge & Victoria Carr Cheshire West and Chester Council

  2. 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

  3. Affordability Average Property Prices in Cheshire West and Chester Source: Hometrack

  4. Affordability

  5. A Developers View • Affordable housing requirements too onerous • Viability assessments – local authority in the dark • Commercially sensitive information • Timescale • Members

  6. 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

  7. 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

  8. Handling Assessments • Internal note - initial guidance to Development Management • Seek specialist advice where necessary

  9. Site Issues Long-term developments & Marginal Sites • Use of software to ‘build in’ uplift • Use of overage clauses in sc106-some reluctance

  10. 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

  11. ……..but is it just about viability • 6,000 units with planning approval • Schemes for 3,000 units coming into the system

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