The purpose of a S106 Viability Assessment is to twofold:
(i) To determine the amount of Affordable Housing that a mixed-use property development might reasonably be expected to provide as a Planning Obligation whilst remaining economically viable.
(ii) To determine the Additionality of Grant. Registered Providers applying for Grant are required to submit an Additionality Calculation to Homes England in the form of a S106 Viability Assessment, to demonstrate that every new affordable home is genuinely additional and does not displace a new home which the market would have provided anyway.
S106 refers to Planning Obligations introduced in the Town & Country Planning Act 1990, as the successor to S52 Planning Agreements introduced in the Town & Country Planning Act 1971, and attach enforceable covenants to planning consents. This may restrict or obligate development of any kind, and may require a financial payment.
S106 obligations are necessary to ensure developments are supported by a balance of uses and supporting infrastructure. For example, if 500 new homes are proposed at one location, they will also need new schools, shops, police, and access roads to make them viable, and to avoid over stressing the exsisting provision of schools, shops, police and access roads.
Owing to the acute shortage of affordable housing, most particularly throughout London, town planners use S106 planning obligations to enforce planning policies that call for new affordable housing. The aim is to maximize the provision of affordable housing in line with planning policy, whilst ensuring that the development is financially viable and sustainable into the future.
The opposing forces in a S106 Viability Assessment are the commercial interests, and the affordable housing interests. Where there is a departure from planning policy, planners will insist on a Viability Assessment to show why, in particular circumstances, the quantity of affordable housing needs to be reduced, and in exceptional circumstances why a financial payment in lieu of affordable housing might be the best way to proceed. There are substantial case law precedents.
In London the Mayor sets conditions where planning applications either take a Fast Track Route (without the need for a Viability Assessment), or take the Viability Tested Route and require Viability Assessments at different stages of the scheme. We specialize in Viability Assessments for the Viability Tested Route. Please call for an informal discussion to see how we can best help you.
The Planning Act 2008 introduced the Community Infrustructure Levy ('CIL'). These are financial charges are attached to Planning Consents, and are also used by Loacl Authorities to pay for infrastructure development. The CIL operates under The Community Infrastructure Levy Regulations 2010 and is generally applied to the non-affordable housing components of a development. CIL must be included as a development cost within S106 Viability Assessments. In London the GLA charges a Mayoral Infrastructure Levy (MCIL #1), and is assessed using Jones Lang LaSalle's Mayoral CIL Rate Calculator.
S106 obligations are not simply about safeguarding affordable housing. They are a powerful tool used by town planners to structure planning consents that might otherwise be refused.
We will agree with you at the outset of your instruction, our Terms of Engagement, and our Professional Fees. We are independant, objective, and may not have a conflict of interest.
We utilize our bespoke Discounted Cash Flows, and the Homes England Development Appraisal Tool which is a site specific development viability tool.
We accept S106 Viability Assessment instructions from Developers, Land Owners, Funds, Banks, Building Societies, Councils, Registered Providers, Homes England, and GLA.