Fit for Planning? An Evaluation of the Application of Development Viability Appraisal Models in the UK Planning System

Abstract

In the context of its increasing use in policy formulation regarding planning obligations, we discuss a number of problematic issues in the application of development viability appraisal modelling in the UK planning system. The increased use of planning obligations to provide affordable housing and to mitigate the effects of negative externalities generated by new development is discussed. The methodology of development viability appraisal modelling is also outlined. Three types of problem are identified. First, there is a set of issues related to intrinsic model and input uncertainty that are problematic in the application of development viability modelling whatever the context. Second, there are problems that are specific to modelling for estimating or justifying planning obligations. In particular, a crucial input that remains contested and uncertain is threshold land value. Clear guidance can resolve this issue. Finally, and more fundamentally, due to spatial and temporal variation in the capacity of development sites to generate financial surpluses for planning obligations, policies that set rules or fix targets on planning obligations without regard to prevailing site and/or market conditions can reduce the supply of development and/or be prone to rapid obsolescence.