SE1 task overview

1. Define categories of development in the area by type, density and scale
2. Carry out an assessment of the feasibility and viability of LZC energy options for each of these development categories

A considerable amount of analysis has already been carried out at a regional and national level of the feasibility and viability, in terms of additional build cost, of different levels of target for different types and scale of development (see links below). In terms of viability, this considers the additional build cost that could arise as a result of meeting the target for sample developments. We suggest that you review these studies and if the scale and nature of development that they cover is similar to that in your area, you can take this existing evidence base as satisfying task 2.

What these studies generally have not considered are wider issues of viability, i.e. an assessment of whether the combination of this policy along with other policies and Section 106 requirements (such as affordable housing), would be viable given the potential residual land value available to a developer. The latter will be affected by land values, market values for new development (either in terms of sales or leasings), infrastructure costs and so on. It may be the case that areas of the region that have lower market, and hence land values, will have less ability to absorb extra development costs than other areas. Viability at this level can be assessed using development appraisal, and many local authorities will have already carried out this sort of appraisal to support affordable housing targets in the past.

We suggest that if you intend to carry out any development appraisal to support policies in your local development documents, and if you wish to set a policy for LZC energy in new development, that you consider factoring in any additional build costs identified from Task 2 to inform the viability of such a target.