The dreaded ‘V’ word - “Viability” - has entered the public consciousness in the last few months – and not in a good way. According to our Prime Minister, viability is the tool that “unscrupulous developers” abuse to “dodge their obligation to build homes local people can afford”.
Putting aside the vexed question of private companies being asked to deliver public goods in this way, and whether or not this kind of rhetoric helps achieve anything: what does the latest draft guidance on viability mean for the consultation and engagement the industry undertakes with residents?
Much of the draft guidance published yesterday reads as a reminder to authorities and councils to actually follow the current NPPF: to look carefully at viability at plan making stage and to ensure that “the total cumulative cost of all relevant policies should not be of a scale that will make development unviable.” Where the emphasis seems to have changed is in the section on Accountability.
It’s clear that the Government wants to see greater transparency on viability – a viability assessment should be “prepared on the basis that it will be made publicly available except in exceptional circumstances.” and this is surely a good thing. Communities see time and time again promises being made pre-application which are later reneged on using viability arguments, and it is not unreasonable that if developers are going to make this argument, they do it openly.
The new guidance also says that local authorities should use funding as per their s106 agreements to “benefit local communities and support the provision of local infrastructure.” Communities rarely feel that they see the benefits of development, and a requirement on councils to be clearer about how the benefits arising from a development have supported the communities affected by it, would be welcome.
But interestingly, stuck right at the end of the guidance, is a section on how authorities and councils should promote the benefits of development to communities – and here is an area that could have a major impact in building trust between communities and developers, and in turn deliver new homes. The guidance says “local authorities and applicants are encouraged to… better promote and publicise the infrastructure that has been delivered through developer contributions”, including via signage and websites.
Housebuilders don’t just deliver the homes the country desperately needs, but a whole host of other benefits which rarely get talked about. Developers themselves need to take some responsibility for this. They are not good enough about promoting what they deliver for communities – case studies, for example, are incredibly powerful, but housebuilders rarely use them when engaging on new schemes. (A supermarket chain I used to work for were always excellent at this – they had a library of case studies and DVDs about previous schemes which could be shown to communities who might be fearful of the impact a new store would have.) This lack of self-promotion by housebuilders is a big mistake – especially if that developer wants to come back and do more work in that community at a later date.
Nothing being suggested in the draft guidance is rocket science. Clearly more transparency and accountability in reporting viability statements is going to be helpful in the long run (if an alarming prospect in the short run) – indeed Bristol City Council are taking the lead on this and demand that all viability assessments are public already. But the real opportunity lies in councils and developers working together to explain to communities the many other benefits that arise from delivering new homes. Far from being unscrupulous, most housebuilders are successful private companies – employing thousands of people, paying their taxes, delivering homes (a public good) AND, in addition, delivering much of the new infrastructure and other benefits that communities need. Changes to viability present an opportunity for the industry to be more positive about what they are achieving – and work to shrug off the unhelpful and lazy characterization of them which is currently being employed by our elected politicians.
This article was written by Anna Sabine-Newlyn, CEO of MPC.