The RICS has said it expects to issue new guidance on the viability methodology it issues to its members by the end of the year, amid criticism that its current guidance is continuing to allow developers to avoid providing sufficient affordable housing.
Earlier this month an open letter from Islington council and London’s Deputy Mayor for Housing, James Murray, said they and other planning authorities had already highlighted ‘circularity’ in the RICS guidance that was allowing some members to inflate the benchmark value of land in order to reduce the levels of affordable housing their developer clients would be obliged to supply. The guidance has not proved fit for purpose, the letter charged.
The letter calls on the RICS to follow the advice given to it in a High Court judgement in May, which found in favour of Islington council and upheld a planning inspector’s decision to refuse for a development of 96 homes that included no affordable housing.
The judge took the unusual step of calling on the RICS to look again at its 2012 guidance document Viability in Planning in conjunction with government and planners.
In response to the open letter, the RICS said that it had already established a working group to look at its technical guidance with regard both to the revised National Planning Policy Framework (NPPF) and the High Court’s judgement.
Planners have long been frustrated by the practice of some developers in paying consultants to prepare viability assessments for sites to support a claim that the price they paid for the land means it can only be developed profitably by reducing the level of affordable housing demanded in the local plan – or not providing any.
In July, revisions to the National Planning Policy Guidance addressed this directly by stating (in Para 011): ‘Under no circumstances will the price paid for land be a relevant justification for failing to accord with relevant policies in the plan’.
But in practice, if a developer has already purchased on a site based on a valuation by a surveyor following RICS guidance, the appropriate value can still become a moot point and lead to appeals and court action following planning refusal.
Islington introduced its own planning guidance in 2016 in a bid to tackle this problem, establishing that it would only recognise the genuine market value of a site for planning purposes. The council has an affordable housing requirement of 50% for major developments and having its own guidance has strengthened its hand in rejecting applications where viability arguments are used in such a manner. However, it has not made the problem of appeals and prolonged challenges go away.
The site ruled on by the High Court in May was an old Territorial Army base that had been vacant for five years. Islington twice rejected a planning application for the site on affordable housing grounds and had its decision upheld by the planning inspector.
‘Developers should respect local planning requirements and take this into account when purchasing new sites, rather than overpaying for land and then trying to bypass affordable housing requirements,’ said Councillor Diarmaid Ward, Islington Council’s Executive Member for Housing and Development last week.
Viability will feature in a panel discussion on Deconstructing Finance on Conference Day at Guerrilla Tactics 2018: Expanding Practice: Navigating the architecture of planning, procurement and property, which takes place at the RIBA on 13–14 November 2018.
John Wacher, Viability Team Leader at the Greater London Authority, will present ‘Understanding viability assessments in planning’ on CPD day.
By Neal Morris. This is a Professional Feature edited by the RIBA Practice team. Send us your feedback and ideas
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Posted on 18 October 2018.
