SE2 Task 5: Development appraisal for strategic sites

Overview of task

If the assessment of the feasibility and viability of carbon reductions has identified that there may be significant additional build cost for developers over and above the requirements of Building Regulations, then you may wish to carry out this task.

The Planning Advisory Service (PAS) Practice Guidance for the Climate Change PPS states:

“A planning authority may consider commissioning illustrative development appraisals for housing sites at different densities and sizes of site in both urban and rural locations, as well as for the main types of commercial and employment development. Because development values vary across quite short distances, these need to cover the different local markets within each authority’s area. Some authorities are already using these to inform ‘planning obligation strategies’ and similar policy studies. Their particular value is that they take account of other planning requirements, including affordable housing and can also be used to test residual land values for developments at different scales to help identify appropriate lower thresholds for the application of targets.”

It may be that you intend to carry out some illustrative development appraisals of your strategic sites anyway, to inform other potential policy requirements and planning obligations (such as affordable housing). You can then factor in any additional build costs highlighted by task 3 into this assessment.

The PAS guidance also states

“Recent court cases such as Persimmon Homes, Barratt Homes and Hillhouse Developments v Blyth Valley Borough Council and appeal decisions have made it clear that planning authorities, must in devising and implementing policies:

• take account of existing market conditions and not anticipate future better market conditions, unless there is evidence to support this. It may be possible, where developments have long delivery programmes, to incorporate review or ‘ratchet’ provisions which enable stricter requirements to be met when market conditions recover, subject to viability testing at that time
• consider the whole range of requirements and obligations and obligations that developers will have to meet on particular sites, including affordable housing and other infrastructure requirements alongside carbon reduction or sustainable homes targets
• apply targets flexibly, taking account of viability and feasibility, when determining individual planning applications.”

Development appraisal is a way of satisfying these requirements, if carried out in the correct way.

We do not intend in this toolkit to provide guidance on how to how to carry out a development appraisal as there are many other guides to this. A good example is the London Affordable Housing Development Control Toolkit

You can use the results of the appraisal to test which of the target options explored as part of task 3 would be viable for any given strategic site.