Town Planning Review

Development viability assessment and the provision of affordable housing: a game of ‘pass the parcel’?

Town Planning Review (2019), 90, (4), 407–428.

Abstract

This paper constructs a hypothetical case study based around the benchmark land value assessments within the landmark Parkhurst Road, London, case decided in the High Court in April 2018. It attempts to illustrate how developers were gaming the system and how the 2014 Planning Practice Guidance aided them to do that. The discussion centres on the extent to which new 2018 National Planning Guidance has addressed the identified flaws and what additional changes might be needed to that guidance to solve any outstanding problems.

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References

ADAMS, D. and TOLSON, S. (2019), ‘Valuation in the dark: constructing perceptions of normality in failing markets’, Town Planning Review, 90, 383–406. Google Scholar

BALL, M. (1996), Investing in New Housing, Bristol, The Policy Press. Google Scholar

BYRNE, P., McALLISTER, P. and WYATT, P. (2011), ‘Precisely wrong or roughly right? An evaluation of development viability appraisal modelling’, Journal of Financial Management of Property and Construction, 16, 249–71. Google Scholar

CATNEY, P. and HENNEBERRY, J. (2019), ‘Change in the political economy of land value capture in England’, Town Planning Review, 90, 339–58. Google Scholar

CLG (DEPARTMENT OF COMMUNITIES AND LOCAL GOVERNMENT) (2012), National Planning Policy Framework, London, Department of Communities and Local Government, https://www.gov.uk/guidance/national-planning-policy-framework (accessed 4 April 2019). Google Scholar

CLG (DEPARTMENT OF COMMUNITIES AND LOCAL GOVERNMENT) (2014), Planning Practice Guidance: Viability, London, Department of Communities and Local Government, https://www.gov.uk/guidance/viability (accessed 4 April 2019). Google Scholar

COLEMAN, C., CROSBY, N., McALLISTER, P. and WYATT, P. (2013), ‘Development appraisal in practice: some evidence from the planning system’, Journal of Property Research, 30, 144–65. Google Scholar

COLENUTT, R., COCHRANE, A. and FIELD, M. (2015), ‘The rise and rise of viability assessment’, Town and Country Planning, 84, 453–58. Google Scholar

CROOK, A. D. H. and WHITEHEAD, C. (2019), ‘Capturing development value, principles and practice: why is it so difficult?’, Town Planning Review, 90, 359–81. Google Scholar

CROSBY, N., DEVANEY, S. and WYATT, P. (2019), Real Estate Developer Returns (report for RICS Research Trust), London, RICS (forthcoming). Google Scholar

CROSBY, N., McALLISTER, P. and WYATT, P. (2013), ‘Fit for planning? An evaluation of the application of development viability appraisal models in the UK planning system’, Environment and Planning B: Planning and Design, 40, 3–22. Google Scholar

CROSBY, N. and WYATT, P. (2015), Financial Viability Appraisal in Planning Decisions: Theory and Practice, London, RICS Research Trust. Google Scholar

CROSBY, N. and WYATT, P. (2016), ‘Financial viability appraisals for site-specific planning decisions in England’, Environment and Planning C: Government and Policy, 34, 1716–33. Google Scholar

DUNNING, R., KESKIN, B., LORD, A. and BUCK, M. (2019), ‘Is there a relationship between planning culture and the value of planning gain? Evidence from England’, Town Planning Review, 90, 453–71. Google Scholar

GRAYSTON, R. (2017), Slipping through the Loophole: How Viability Assessments Are Reducing Affordable Housing Supply in England, London, Shelter. Google Scholar

JAKEMAN, A. J., LETCHER, R. A. and NORTON, J. P. (2006), ‘Ten iterative steps in development and evaluation of environmental models’, Environmental Modelling and Software, 21, 602–14. Google Scholar

McALLISTER, P. (2017), ‘The calculative turn in land value capture: lessons from the English planning system’, Land Use Policy, 63, 122–29. Google Scholar

McALLISTER, P. (2019), ‘The taxing problems of land value capture, planning obligations and viability tests: some reasonable models?’, Town Planning Review, 90, 429–51. Google Scholar

McALLISTER, P., STREET, E. and WYATT, P. (2016a), ‘An empirical investigation of stalled residential sites in England’, Planning Practice and Research, 31, 132–53. Google Scholar

McALLISTER, P., STREET, E. and WYATT, P. (2016b), ‘Governing calculative practices: an investigation of development viability modelling in the English planning system’, Urban Studies, 53, 2363–79. Google Scholar

MHCLG (MINISTRY OF HOUSING, COMMUNITIES AND LOCAL GOVERNMENT) (2017), Planning for the Right Homes in the Right Places: Consultation Proposals, London, Ministry of Housing, Communities and Local Government, https://www.gov.uk/government/consultations/planning-for-the-right-homes-in-the-right-places-consultation-proposals (accessed 4 April 2019). Google Scholar

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MHCLG (MINISTRY OF HOUSING, COMMUNITIES AND LOCAL GOVERNMENT) (2018b), National Planning Guidance: Viability, London, Ministry of Housing, Communities and Local Government, https://www.gov.uk/guidance/viability#standardised-inputs-to-viabilityassessment (accessed 4 April 2019). Google Scholar

MHCLG (MINISTRY OF HOUSING, COMMUNITIES AND LOCAL GOVERNMENT) (2019), National Planning Policy Framework, London, Ministry of Housing, Communities and Local Government, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/779764/NPPF_Feb_2019_web.pdf (accessed 4 April 2019). Google Scholar

PAWSON, R., GREENHALGH, T., HARVEY, G. and WALSHE, K. (2005), ‘Realist review: a new method of systematic review designed for complex policy interventions’, Journal of Health Services Research & Policy, 10, 21–34. Google Scholar

RICS (2012), Financial Viability in Planning (guidance note), London, RICS. Google Scholar

RICS (2019), The Valuation of Development Land (guidance note), London, RICS (forthcoming). Google Scholar

SAYCE, S., CROSBY, N., GARSIDE, P., HARRIS, R. and PARSA, A. (2017), Viability and the Planning System: The Relationship between Economic Viability Testing, Land Values and Affordable Housing in London (research report for the London boroughs of Barking and Dagenham, Brent, Camden, Croydon, Enfield, Greenwich, Islington, Lambeth, Merton, Newham, Southwark, Tower Hamlets and Waltham Forest), Cirencester, Royal Agricultural University, https://www.rau.ac.uk/sites/files/rau/field/field_document/Viability%20and%20the%20Planning%20System%20Research%20January%202017.pdf (accessed 4 April 2019). Google Scholar

VEDUNG, E. and VAN DER DOELEN, F. (1998), ‘The sermon: information programs in the public policy process – choice, effects, and evaluation’, in M. Bemelmans-Videc, R. Rist and E. Vedung (eds), Carrots, Sticks, and Sermons: Policy Instruments and Their Evaluation, New Brunswick, NJ, Transaction Publishers, 103–28. Google Scholar

WYATT, P. (2013), Property Valuation, 2nd edn, Chichester, Wiley-Blackwell. Google Scholar

ADAMS, D. and TOLSON, S. (2019), ‘Valuation in the dark: constructing perceptions of normality in failing markets’, Town Planning Review, 90, 383–406. Google Scholar

BALL, M. (1996), Investing in New Housing, Bristol, The Policy Press. Google Scholar

BYRNE, P., McALLISTER, P. and WYATT, P. (2011), ‘Precisely wrong or roughly right? An evaluation of development viability appraisal modelling’, Journal of Financial Management of Property and Construction, 16, 249–71. Google Scholar

CATNEY, P. and HENNEBERRY, J. (2019), ‘Change in the political economy of land value capture in England’, Town Planning Review, 90, 339–58. Google Scholar

CLG (DEPARTMENT OF COMMUNITIES AND LOCAL GOVERNMENT) (2012), National Planning Policy Framework, London, Department of Communities and Local Government, https://www.gov.uk/guidance/national-planning-policy-framework (accessed 4 April 2019). Google Scholar

CLG (DEPARTMENT OF COMMUNITIES AND LOCAL GOVERNMENT) (2014), Planning Practice Guidance: Viability, London, Department of Communities and Local Government, https://www.gov.uk/guidance/viability (accessed 4 April 2019). Google Scholar

COLEMAN, C., CROSBY, N., McALLISTER, P. and WYATT, P. (2013), ‘Development appraisal in practice: some evidence from the planning system’, Journal of Property Research, 30, 144–65. Google Scholar

COLENUTT, R., COCHRANE, A. and FIELD, M. (2015), ‘The rise and rise of viability assessment’, Town and Country Planning, 84, 453–58. Google Scholar

CROOK, A. D. H. and WHITEHEAD, C. (2019), ‘Capturing development value, principles and practice: why is it so difficult?’, Town Planning Review, 90, 359–81. Google Scholar

CROSBY, N., DEVANEY, S. and WYATT, P. (2019), Real Estate Developer Returns (report for RICS Research Trust), London, RICS (forthcoming). Google Scholar

CROSBY, N., McALLISTER, P. and WYATT, P. (2013), ‘Fit for planning? An evaluation of the application of development viability appraisal models in the UK planning system’, Environment and Planning B: Planning and Design, 40, 3–22. Google Scholar

CROSBY, N. and WYATT, P. (2015), Financial Viability Appraisal in Planning Decisions: Theory and Practice, London, RICS Research Trust. Google Scholar

CROSBY, N. and WYATT, P. (2016), ‘Financial viability appraisals for site-specific planning decisions in England’, Environment and Planning C: Government and Policy, 34, 1716–33. Google Scholar

DUNNING, R., KESKIN, B., LORD, A. and BUCK, M. (2019), ‘Is there a relationship between planning culture and the value of planning gain? Evidence from England’, Town Planning Review, 90, 453–71. Google Scholar

GRAYSTON, R. (2017), Slipping through the Loophole: How Viability Assessments Are Reducing Affordable Housing Supply in England, London, Shelter. Google Scholar

JAKEMAN, A. J., LETCHER, R. A. and NORTON, J. P. (2006), ‘Ten iterative steps in development and evaluation of environmental models’, Environmental Modelling and Software, 21, 602–14. Google Scholar

McALLISTER, P. (2017), ‘The calculative turn in land value capture: lessons from the English planning system’, Land Use Policy, 63, 122–29. Google Scholar

McALLISTER, P. (2019), ‘The taxing problems of land value capture, planning obligations and viability tests: some reasonable models?’, Town Planning Review, 90, 429–51. Google Scholar

McALLISTER, P., STREET, E. and WYATT, P. (2016a), ‘An empirical investigation of stalled residential sites in England’, Planning Practice and Research, 31, 132–53. Google Scholar

McALLISTER, P., STREET, E. and WYATT, P. (2016b), ‘Governing calculative practices: an investigation of development viability modelling in the English planning system’, Urban Studies, 53, 2363–79. Google Scholar

MHCLG (MINISTRY OF HOUSING, COMMUNITIES AND LOCAL GOVERNMENT) (2017), Planning for the Right Homes in the Right Places: Consultation Proposals, London, Ministry of Housing, Communities and Local Government, https://www.gov.uk/government/consultations/planning-for-the-right-homes-in-the-right-places-consultation-proposals (accessed 4 April 2019). Google Scholar

MHCLG (MINISTRY OF HOUSING, COMMUNITIES AND LOCAL GOVERNMENT) (2018a), Land Value Capture: Government Response to the Select Committee Inquiry, London, Ministry of Housing, Communities and Local Government, https://www.gov.uk/government/publications/land-value-capture-government-response-to-the-select-committee-inquiry (accessed 4 April 2019). Google Scholar

MHCLG (MINISTRY OF HOUSING, COMMUNITIES AND LOCAL GOVERNMENT) (2018b), National Planning Guidance: Viability, London, Ministry of Housing, Communities and Local Government, https://www.gov.uk/guidance/viability#standardised-inputs-to-viabilityassessment (accessed 4 April 2019). Google Scholar

MHCLG (MINISTRY OF HOUSING, COMMUNITIES AND LOCAL GOVERNMENT) (2019), National Planning Policy Framework, London, Ministry of Housing, Communities and Local Government, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/779764/NPPF_Feb_2019_web.pdf (accessed 4 April 2019). Google Scholar

PAWSON, R., GREENHALGH, T., HARVEY, G. and WALSHE, K. (2005), ‘Realist review: a new method of systematic review designed for complex policy interventions’, Journal of Health Services Research & Policy, 10, 21–34. Google Scholar

RICS (2012), Financial Viability in Planning (guidance note), London, RICS. Google Scholar

RICS (2019), The Valuation of Development Land (guidance note), London, RICS (forthcoming). Google Scholar

SAYCE, S., CROSBY, N., GARSIDE, P., HARRIS, R. and PARSA, A. (2017), Viability and the Planning System: The Relationship between Economic Viability Testing, Land Values and Affordable Housing in London (research report for the London boroughs of Barking and Dagenham, Brent, Camden, Croydon, Enfield, Greenwich, Islington, Lambeth, Merton, Newham, Southwark, Tower Hamlets and Waltham Forest), Cirencester, Royal Agricultural University, https://www.rau.ac.uk/sites/files/rau/field/field_document/Viability%20and%20the%20Planning%20System%20Research%20January%202017.pdf (accessed 4 April 2019). Google Scholar

VEDUNG, E. and VAN DER DOELEN, F. (1998), ‘The sermon: information programs in the public policy process – choice, effects, and evaluation’, in M. Bemelmans-Videc, R. Rist and E. Vedung (eds), Carrots, Sticks, and Sermons: Policy Instruments and Their Evaluation, New Brunswick, NJ, Transaction Publishers, 103–28. Google Scholar

WYATT, P. (2013), Property Valuation, 2nd edn, Chichester, Wiley-Blackwell. Google Scholar

ADAMS, D. and TOLSON, S. (2019), ‘Valuation in the dark: constructing perceptions of normality in failing markets’, Town Planning Review, 90, 383–406. Google Scholar

BALL, M. (1996), Investing in New Housing, Bristol, The Policy Press. Google Scholar

BYRNE, P., McALLISTER, P. and WYATT, P. (2011), ‘Precisely wrong or roughly right? An evaluation of development viability appraisal modelling’, Journal of Financial Management of Property and Construction, 16, 249–71. Google Scholar

CATNEY, P. and HENNEBERRY, J. (2019), ‘Change in the political economy of land value capture in England’, Town Planning Review, 90, 339–58. Google Scholar

CLG (DEPARTMENT OF COMMUNITIES AND LOCAL GOVERNMENT) (2012), National Planning Policy Framework, London, Department of Communities and Local Government, https://www.gov.uk/guidance/national-planning-policy-framework (accessed 4 April 2019). Google Scholar

CLG (DEPARTMENT OF COMMUNITIES AND LOCAL GOVERNMENT) (2014), Planning Practice Guidance: Viability, London, Department of Communities and Local Government, https://www.gov.uk/guidance/viability (accessed 4 April 2019). Google Scholar

COLEMAN, C., CROSBY, N., McALLISTER, P. and WYATT, P. (2013), ‘Development appraisal in practice: some evidence from the planning system’, Journal of Property Research, 30, 144–65. Google Scholar

COLENUTT, R., COCHRANE, A. and FIELD, M. (2015), ‘The rise and rise of viability assessment’, Town and Country Planning, 84, 453–58. Google Scholar

CROOK, A. D. H. and WHITEHEAD, C. (2019), ‘Capturing development value, principles and practice: why is it so difficult?’, Town Planning Review, 90, 359–81. Google Scholar

CROSBY, N., DEVANEY, S. and WYATT, P. (2019), Real Estate Developer Returns (report for RICS Research Trust), London, RICS (forthcoming). Google Scholar

CROSBY, N., McALLISTER, P. and WYATT, P. (2013), ‘Fit for planning? An evaluation of the application of development viability appraisal models in the UK planning system’, Environment and Planning B: Planning and Design, 40, 3–22. Google Scholar

CROSBY, N. and WYATT, P. (2015), Financial Viability Appraisal in Planning Decisions: Theory and Practice, London, RICS Research Trust. Google Scholar

CROSBY, N. and WYATT, P. (2016), ‘Financial viability appraisals for site-specific planning decisions in England’, Environment and Planning C: Government and Policy, 34, 1716–33. Google Scholar

DUNNING, R., KESKIN, B., LORD, A. and BUCK, M. (2019), ‘Is there a relationship between planning culture and the value of planning gain? Evidence from England’, Town Planning Review, 90, 453–71. Google Scholar

GRAYSTON, R. (2017), Slipping through the Loophole: How Viability Assessments Are Reducing Affordable Housing Supply in England, London, Shelter. Google Scholar

JAKEMAN, A. J., LETCHER, R. A. and NORTON, J. P. (2006), ‘Ten iterative steps in development and evaluation of environmental models’, Environmental Modelling and Software, 21, 602–14. Google Scholar

McALLISTER, P. (2017), ‘The calculative turn in land value capture: lessons from the English planning system’, Land Use Policy, 63, 122–29. Google Scholar

McALLISTER, P. (2019), ‘The taxing problems of land value capture, planning obligations and viability tests: some reasonable models?’, Town Planning Review, 90, 429–51. Google Scholar

McALLISTER, P., STREET, E. and WYATT, P. (2016a), ‘An empirical investigation of stalled residential sites in England’, Planning Practice and Research, 31, 132–53. Google Scholar

McALLISTER, P., STREET, E. and WYATT, P. (2016b), ‘Governing calculative practices: an investigation of development viability modelling in the English planning system’, Urban Studies, 53, 2363–79. Google Scholar

MHCLG (MINISTRY OF HOUSING, COMMUNITIES AND LOCAL GOVERNMENT) (2017), Planning for the Right Homes in the Right Places: Consultation Proposals, London, Ministry of Housing, Communities and Local Government, https://www.gov.uk/government/consultations/planning-for-the-right-homes-in-the-right-places-consultation-proposals (accessed 4 April 2019). Google Scholar

MHCLG (MINISTRY OF HOUSING, COMMUNITIES AND LOCAL GOVERNMENT) (2018a), Land Value Capture: Government Response to the Select Committee Inquiry, London, Ministry of Housing, Communities and Local Government, https://www.gov.uk/government/publications/land-value-capture-government-response-to-the-select-committee-inquiry (accessed 4 April 2019). Google Scholar

MHCLG (MINISTRY OF HOUSING, COMMUNITIES AND LOCAL GOVERNMENT) (2018b), National Planning Guidance: Viability, London, Ministry of Housing, Communities and Local Government, https://www.gov.uk/guidance/viability#standardised-inputs-to-viabilityassessment (accessed 4 April 2019). Google Scholar

MHCLG (MINISTRY OF HOUSING, COMMUNITIES AND LOCAL GOVERNMENT) (2019), National Planning Policy Framework, London, Ministry of Housing, Communities and Local Government, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/779764/NPPF_Feb_2019_web.pdf (accessed 4 April 2019). Google Scholar

PAWSON, R., GREENHALGH, T., HARVEY, G. and WALSHE, K. (2005), ‘Realist review: a new method of systematic review designed for complex policy interventions’, Journal of Health Services Research & Policy, 10, 21–34. Google Scholar

RICS (2012), Financial Viability in Planning (guidance note), London, RICS. Google Scholar

RICS (2019), The Valuation of Development Land (guidance note), London, RICS (forthcoming). Google Scholar

SAYCE, S., CROSBY, N., GARSIDE, P., HARRIS, R. and PARSA, A. (2017), Viability and the Planning System: The Relationship between Economic Viability Testing, Land Values and Affordable Housing in London (research report for the London boroughs of Barking and Dagenham, Brent, Camden, Croydon, Enfield, Greenwich, Islington, Lambeth, Merton, Newham, Southwark, Tower Hamlets and Waltham Forest), Cirencester, Royal Agricultural University, https://www.rau.ac.uk/sites/files/rau/field/field_document/Viability%20and%20the%20Planning%20System%20Research%20January%202017.pdf (accessed 4 April 2019). Google Scholar

VEDUNG, E. and VAN DER DOELEN, F. (1998), ‘The sermon: information programs in the public policy process – choice, effects, and evaluation’, in M. Bemelmans-Videc, R. Rist and E. Vedung (eds), Carrots, Sticks, and Sermons: Policy Instruments and Their Evaluation, New Brunswick, NJ, Transaction Publishers, 103–28. Google Scholar

WYATT, P. (2013), Property Valuation, 2nd edn, Chichester, Wiley-Blackwell. Google Scholar

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Author details

Crosby, Neil