Basildon Local Plan and CIL Viability Update Study

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Basildon Local Plan and CIL Viability Update Study Basildon Local Plan and CIL Viability Update Study Final Report February 2018 On behalf of Tolvarne House First Drive Teignmouth TQ14 9JR t 01626 777 691 m 07739 945473 e [email protected] 1 Jobs / 10 Basildon Borough LP Viability Update February 2018 Basildon Borough LP and CIL Viability CONTENTS 1 INTRODUCTION .................................................................................................... 2 The Study Scope .......................................................................................................... 2 Previous Studies .......................................................................................................... 3 Study Approach............................................................................................................ 3 Report Structure ........................................................................................................... 7 2 NATIONAL POLICY CONTEXT ............................................................................... 8 Introduction .................................................................................................................. 8 National Framework on Plan Viability ........................................................................... 8 National Policy on Community Infrastructure Levy ...................................................... 14 Summary ................................................................................................................... 16 3 LOCAL POLICY IMPACTS ON VIABILITY .............................................................. 18 Introduction ................................................................................................................ 18 Local Plan Policies ..................................................................................................... 18 4 LOCAL DEVELOPMENT CONTEXT ...................................................................... 26 Introduction ................................................................................................................ 26 Residential Market Overview ...................................................................................... 26 Non-residential Market Overview ................................................................................ 33 5 VIABILITY: ASSUMPTIONS .................................................................................. 39 Introduction ................................................................................................................ 39 Tested Residential Typologies ................................................................................... 39 Residential Values and Cost Assumptions ................................................................. 46 Tested Policy Costs.................................................................................................... 52 Residential Testing Benchmark Land Values .............................................................. 55 Non-residential Testing Assumptions ......................................................................... 56 Non-residential Benchmark Land Values .................................................................... 59 6 VIABILITY: RESULTS ........................................................................................... 62 Introduction ................................................................................................................ 62 Local Plan Policies Testing ......................................................................................... 62 Potential for Residential CIL rates .............................................................................. 66 Potential for Non-residential CIL rates ........................................................................ 68 7 RECOMMENDATIONS ......................................................................................... 69 Testing of Local Plan Viability ..................................................................................... 69 Recommendation for CIL Charging ............................................................................ 69 APPENDICES Appendix 1 Example Appraisals Appendix 2 Notes from the Developer Workshop Appendix 3 New Residential Property Transactions Appendix 4 Non-residential Property Transactions Appendix 5 Land Values 1 February 2018 Basildon Borough LP and CIL Viability 1 Introduction The Study Scope 1.1 Porter Planning Economics Ltd (PPE) have been commissioned by Basildon Borough Council to provide high-level viability update advice relating to plan making in the Borough. This has included undertaking high level viability assessments to provide the following outputs: ▪ A plan viability assessment of the emerging Basildon Local Plan; and ▪ Viability assessment of theoretical developments considering the Local Plan requirements and other costs, to inform Community Infrastructure Levy (CIL) rates. 1.2 The main purpose of a plan viability (or PV) assessment is to provide evidence that the policy requirements in the Local Plan should not threaten the development viability of the Local Plan as a whole, in accordance with the National Planning Policy Framework (NPPF) paragraph 173. In assessing the Local Plan, this study will inform policy decisions based on the policy aspirations of achieving sustainable development and the realities of economic viability. 1.3 The assessment will also identify a baseline for implementing a Community Infrastructure Levy and indicate the potential CIL levels that development could support based on the Plan viability appraisals. This is in accordance with the CIL Regulations 2010 (as amended in 2011, 2012, 2013 and 2014) and the National Planning Practice Guidance on CIL (PPG CIL). 1.4 The approach to assessing plan viability should recognise that it can only provide high level assurance that the policies within the plan are set in a way that is compatible with the likely economic viability. It cannot guarantee that every development in the plan period will be viable, only that the plan policies should be viable for most sites. 1.5 The report and the accompanying appraisals have been prepared in line with the Local Housing Delivery Group and chaired by Sir John Harman 'Viability Testing Local Plans' advice for planning practitioners, June 2012 (the Harman Report). The viability assessments have also been prepared in line with and the Royal Institute of Chartered Surveyors (RICS) valuation guidance. However, it is first and foremost a supporting document to inform the Local Plan evidence base and planning policy, in particular policy concerned with the planning, funding and delivery of infrastructure needed to support delivery of the plan. 1.6 It should therefore be noted that as per Professional Standards 1 of the RICS Valuation Standards – Global and UK Edition, the advice expressly given in the preparation for, or during negotiations or possible litigation does not form part of a formal “Red Book” valuation and should not be relied upon as such. No responsibility whatsoever is accepted to any third party who may seek to rely on the content of the report for such purposes. 2 February 2018 Basildon Borough LP and CIL Viability Previous Studies Basildon Borough Whole Local Plan Viability and CIL Viability Study (December 2015) 1.7 This commission follows on from the previous Local Plan and CIL viability testing undertaken by Peter Brett Associates (PBA) in December 2015, with a specific focus on the impacts of the Basildon Borough Draft Local Plan (November 2015). The work by PBA has been continuous, so that there has been regular updating of values and costs and potential policy options being considered through the emerging Local Plan have been tested, until its final submission for Examination. However, through agreement with the Council in December 2017, the commission was transferred from PBA to PPE using the same personnel that has been involved in carry out the bulk of the viability testing to date. PPE has therefore been commissioned to finalise the viability assessment of the Local Plan and CIL testing. 1.8 It is important to note that the approach, methodology and assumptions used in the viability appraisals in this report are largely the same as those described and used in the previous report (hereon referred to as the PBA December 2015 report). The only difference is the revised Local Plan. Therefore, it is advisable that the earlier PBA report is read in conjunction with this supplementary document. But where any information or assumptions in the PBA December 2015 report has been updated in this report, the information/assumptions in the PBA December 2015 should no longer be relied on. Basildon Borough HELAA Viability Update 2017 1.9 In June 2017, Peter Brett Associates (PBA) carried out a viability assessment update of residential sites identified in the draft Basildon Borough Housing and Employment Land Availability Assessment (HELAA). This included a viability assessment of 230 suitable and available sites, identified in the 2016-2017 HELAA, with the purpose of identifying which of these sites would be achievable sites as potential housing land supply to underpin the emerging Local Plan. This also covered the viability of the strategic sites within the Local Plan. The assessment of sites was a high-level viability assessment to provide a ‘snapshot in time’, reflecting the market conditions found to be operating at that time to provide the most robust evidence available.
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