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South East Lincolnshire Whole Plan Viability Study Final Draft Report

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South East Lincolnshire Whole Plan Viability Study Final Draft Report South East Lincolnshire Whole Plan Viability Study Final draft report On behalf of South East Lincolnshire Joint Strategic Planning Committee Project Ref: 27119-002 | Date: January 2016 Office Address: Waterloo House, Victoria Square, Birmingham B2 5TB T: +44 (0)121 633 2900 E: [email protected] South East Lincolnshire Whole Plan Viability Study Document Control Sheet Project Name: South East Lincolnshire Whole Plan Viability Study Report Title: Draft Final Report Doc Ref: 27119-002 Date: 24th December 2015 Name Position Signature Date Prepared and Stuart Cook Associate SC 21.12.2015 reviewed by: Prepared and Senior Shilpa Rasaiah SR 24.12.2015 reviewed by: Associate Approved by: Michael Parkinson Partner For and on behalf of Peter Brett Associates LLP Revision Date Description Prepared Reviewed Approved Peter Brett Associates LLP disclaims any responsibility to the Client and others in respect of any matters outside the scope of this report. This report has been prepared with reasonable skill, care and diligence within the terms of the Contract with the Client and generally in accordance with the appropriate ACE Agreement and taking account of the manpower, resources, investigations and testing devoted to it by agreement with the Client. This report is confidential to the Client and Peter Brett Associates LLP accepts no responsibility of whatsoever nature to third parties to whom this report or any part thereof is made known. Any such party relies upon the report at their own risk. © Peter Brett Associates LLP 2015 C:\Users\eldreds\AppData\Local\Microsoft\Windows\Temporary Internet ii Files\Content.Outlook\YEV8Z53M\South East Lincolnshire whole plan viability - Final Report - Jan 2016 v2.docx South East Lincolnshire Whole Plan Viability Study Contents 1 Introduction ................................................................................................................ 1 1.1 Study scope ................................................................................................................... 1 1.2 Study approach ............................................................................................................. 1 1.3 Study caveats ................................................................................................................ 3 1.4 Report structure ............................................................................................................. 4 2 National policy content .............................................................................................. 5 2.1 Introduction .................................................................................................................... 5 2.2 National policy and recent consultation on affordable housing ..................................... 6 2.3 National policy on infrastructure .................................................................................... 7 2.4 National housing standards ........................................................................................... 8 2.5 Further planning documents should not introduce additional cost ................................ 8 2.6 National policy on community infrastructure levy .......................................................... 9 3 The Local policy and development context .............................................................12 3.1 Introduction .................................................................................................................. 12 3.2 Population growth and future spatial distribution policy .............................................. 12 3.3 Infrastructure policy ..................................................................................................... 13 3.4 Developer contributions and mechanism to fund infrastructure costs ........................ 14 3.5 Affordable housing past delivery, consultation response and policy ........................... 15 4 Residential viability testing ......................................................................................17 4.1 Introduction .................................................................................................................. 17 4.2 Residual land value approach to viability appraisals ................................................... 17 4.3 Viability assumptions ................................................................................................... 17 4.5 Developability consideration for the urban extension .................................................. 31 5 Commercial viability testing .....................................................................................33 5.1 Introduction .................................................................................................................. 33 5.2 Planned commercial growth ........................................................................................ 33 5.3 The commercial development typologies .................................................................... 33 5.4 Viability assumptions ................................................................................................... 35 5.5 Other development costs ............................................................................................ 36 5.6 Commercial viability appraisal findings ....................................................................... 37 6 Conclusions and recommendations ........................................................................38 6.1 Introduction .................................................................................................................. 38 6.2 Development context findings ..................................................................................... 38 6.3 Is the Local Plan deliverable and developable? .......................................................... 39 6.4 Viability findings and recommendations ...................................................................... 39 C:\Users\eldreds\AppData\Local\Microsoft\Windows\Temporary Internet iii Files\Content.Outlook\YEV8Z53M\South East Lincolnshire whole plan viability - Final Report - Jan 2016 v2.docx South East Lincolnshire Whole Plan Viability Study Appendices Appendix A – Developer consultations Appendix B – Residential market research and appraisals Appendix C – Commercial market research and appraisals C:\Users\eldreds\AppData\Local\Microsoft\Windows\Temporary Internet iv Files\Content.Outlook\YEV8Z53M\South East Lincolnshire whole plan viability - Final Report - Jan 2016 v2.docx South East Lincolnshire Whole Plan Viability Study 1 Introduction 1.1 Study scope 1.1.1 Peter Brett Associates (PBA) LLP has been commissioned by South Holland District Council on behalf of the South East Lincolnshire Joint Strategic Planning Committee (representing South Holland District Council and Boston Borough Council) to assess the viability of the South East Lincolnshire Local Plan 2011 – 2036 - Draft for Public Consultation January 2016 (abbreviated in this report as the Draft Local Plan). We refer to the two local authority areas in this report as South East Lincolnshire. This report looks at the whole plan viability (abbreviated to viability study) including guidance on the percentage of affordable housing policy and informing the scope for a preliminary draft Community Infrastructure Levy (CIL). 1.1.2 The main purpose of this plan viability assessment is to ensure that the requirements of the National Planning Policy Framework (NPPF) are met. That is, the policy requirements in the Draft Local Plan should not threaten the development viability of the plan as a whole. The objective of this study is to inform policy decisions relating to the trade-offs between the policy aspirations of achieving sustainable development and the realities of economic viability. Defining local plan viability 1.1.3 The 'Viability Testing Local Plans - Advice for Planning practitioners Report’ prepared by the Local housing Delivery Group and chaired by Sir John Harman June 2012 (referred to as the Harman Report) distinguishes between individual development and plan viability as follows: ‘An individual development can be said to be viable if, after taking account of all costs, including central and local government policy and regulatory costs, and the cost and availability of development finance, the scheme provides a competitive return to the developer to ensure that development takes place, and generates a land value sufficient to persuade the land owner to sell the land for the development proposed.’ ‘At a Local Plan level, viability is very closely linked to the concept of deliverability. In the case of housing, a Local Plan can be said to be deliverable if sufficient sites are viable (as defined in the previous paragraph) to deliver the plan’s housing requirement over the plan period’. 1.2 Study approach 1.2.1 The preparation of the Draft Local Plan spatial options and policies has adopted an ‘iterative approach’. The identified need for affordable housing and infrastructure informed the viability assessment, and the initial findings from this plan viability assessment presented to the client team during autumn 2015 have informed the policy considerations for affordable housing and infrastructure policies incorporated in the Draft Local Plan. 1.2.2 The approach to this plan viability assessment is summarised in Figure 1.1 on the following page. The process set out is broken down into a number of stages. C:\Users\eldreds\AppData\Local\Microsoft\Windows\Temporary
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