Islington Council publish Development Viability guidance

Islington is one of the most densely populated London boroughs with a large number of redevelopment projects. Islington Council said that it is "committed to increasing the delivery of affordable housing as set out in the Islington Corporate Plan and Islington Housing Strategy 2014-2019." The document will not form part of the Council's Development or Local Plan but "it is a material consideration dependent on the circumstances of individual applications."

The Council has set out rules in relation to providing greater clarity to both the applicants and members of the public which will allow them to scrutinise the viability appraisals when the affordable housing target has not been met. The SPD requires applicants to provide more detailed information than previously required in order to help the Council in deciding the appropriate levels of planning obligations, including affordable housing.

Applicants are now required to justify their level of profitability and submit supporting evidence to validate their calculations. This should take into account the development's risk, development-specific characteristics, market conditions and comparable schemes.  The document also offers more detailed guidance in relation to affordable housing. It outlines the process for obtaining development appraisals and reviews for viability when determining the level of affordable housing.

The SPD offers comprehensive guidance on the "deliverability and transparency" of the viability assessment. The Council want more transparency and it recognises the importance of public participation.  The document provides that applicants should submit information with "the knowledge that this would be made publically available alongside other application documents, apart from in exceptional circumstances."

If the applicant would like to keep the viability assessment confidential, they will have to prove that disclosure of such information causes harm that outweighs the public interest. They cannot keep it private purely based on commercial interests.

The document also offers detailed guidance on viability at the pre-application and application stage, build costs, and methodology.

Islington councillor James Murray said: " There is growing evidence some developers use 'viability assessments' to their advantage, such as inflating land costs to say they can't afford to build affordable housing ...we’re setting out new rules to make sure that developers can’t game the system. We want to make the system transparent, clear, and fair, to help ensure that the affordable housing we badly need is built."

Planning expert Marcus Bate of Pinsent Masons, the law firm behind Out-Law.com, said: "This is a much more intelligent response to the viability disclosure conundrum than Greenwich's ill-conceived plans to deal with this through the validation process. Council members need to understand the gist of applicants' viability appraisals in order to make robust planning decisions. Islington is looking to take this a step further. By seeking even more financial information from applicants, Islington is aligning its planning process more closely with the separate FOI and EIR regimes and giving the public more transparency by doing so."

Planning expert Susanne Andreasen, said: “With continued pressure on local authorities to meet targets for the provision of affordable homes, it is not surprising that Islington Council is seeking to obtain as much information as possible from developers to ensure development proposals contain sufficient affordable housing".

“Viability assessments may contain commercially sensitive information and the Environmental Information Regulations 2004 and the Freedom of Information Act 2000 provide exemptions from disclosure requirements on grounds of confidentiality. Islington’s focus on transparency in the draft SPD is a clear reflection of a number of recent decisions by the Information Commissioner’s Office and the First Tier Tribunal which have shown a tendency to make it harder for developers to prove that disclosure of viability information would harm their commercial interests” said Andreasen.