Community Infrastructure Levy (CIL) Preliminary Draft Charging Schedule and Regulation 123 List
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Community Infrastructure Levy (CIL) Preliminary Draft Charging Schedule and Regulation 123 List
Q9. Do you have any further comments on the PDCS?
Representation ID: 21741
Received: 26/09/2014
Respondent: McCarthy and Stone
Agent: The Planning Bureau Limited
We consider that it is of vital importance that the emerging CIL does not prohibit the development of specialist accommodation for the elderly at a time when there is an existing and urgent need for this form of development and that by not properly assessing this form of development the proposed CIL rate would threaten the delivery of the relevant Development Plan contravening Government Guidance.
We therefore commend the Council on their decision to provide a Viability Assessment of Sheltered / Retirement housing and Extra Care accommodation.
This is a representation on behalf of McCarthy & Stone Retirement Lifestyles Ltd. As the market leaders in the provision of retirement housing for sale to the elderly, McCarthy & Stone Retirement Lifestyles Ltd considers that with its extensive experience and expertise in providing development of this nature it is well placed to provide informed comments on the emerging Rother District Council Community Infrastructure Levy insofar as it affects or relates to housing for the elderly.
The CIL Guidance published in February 2014 by the Department for Communities and Local Government (DCLG) states consistently that 'In proposing a levy rate(s) charging authorities should show that the proposed rate o(or rates) would not threaten delivery of the relevant Plan as a whole' (Paragraph 29).
The CIL Guidance also stresses the importance of this principle to individual market sectors that play an important role in meeting housing need, housing supply and the delivery of the Development Plan, such as specialist accommodation for the elderly. This is relevant in the context of Paragraph 37 of the Guidance:
"... However, resulting charging schedules should not impact disproportionately on particular sectors or specialist forms of accommodation and charging Authorities should consider views of developers at an early stage".
Where the provision of specialist accommodation for the elderly plays a clear role in meeting housing needs in the emerging or extant Development Plan, as it does in the context of the Rother Local Development Framework, by not properly considering the effect of CIL on this form of development the Council would be putting the objective of the Development Plan at risk and thereby contravening Government Guidance.
Growing Elderly Population
The National Planning Policy Framework stipulates that the planning system should be 'supporting strong, vibrant and healthy communities' and highlights the need to 'deliver a wide choice of high quality homes, widen opportunities for home ownership and create sustainable, inclusive and mixed communities. Local planning authorities should plan for a mix of housing based on current and future demographic trends, market trends and the needs of different groups in the community...such as...older people' [emphasis added].
The recently published National Planning Practice Guidance reaffirms this in the guidance for assessing housing need in the plan making process entitled 'How should the needs for all types of housing be addressed?' (Paragraph: 021 Reference ID: 2a-021-20140306) and a separate subsection is provided for 'Housing for older people'. This stipulates that "the need to provide housing for older people is critical given the projected increase in the number of households aged 65 and over accounts for over half of the new households (Department for Communities and Local Government Household Projections 2013). Plan makers will need to consider the size, location and quantity of dwellings needed in the future for older people in order to allow them to move. This could free up houses that are under occupied. The age profile of the population can be drawn from the Census data. Projections of population and households by age group should also be used. The future needs of older persons housing broken down by tenure and type (e.g. Sheltered, enhanced sheltered, extra care, registered care) should be assessed and can be obtained from a number of online tool kits provided by the sector. The assessment should set out the level of need for residential institutions (use class C2). But identifying the need for particular types of general housing, such as bungalows, is equally important."
The "What Homes Where Toolkit" developed by the Home Builders Federation uses statistical data and projections from the Office of National Statistics (ONS) and the Department for Communities and Local Government (DCLG) to provide useful data on current and future housing needs. The table below has been replicated from the toolkit and shows the projected change to the demographic profile of Rother between 2008 and 2033
In line with the rest of the country, this toolkit demonstrates that the demographic profile of the Authority is projected to age. The proportion of the population aged 60 and over is projected to increase from 36.7% to 47.5% between 2008 and 2033. It should be taken into account that this is a significantly higher proportion of people over the age of 60 compared to average trends across the UK (27.8%). The largest proportional increases in the older population are expected to be of the 'frail' elderly, those aged 75 and over, who are more likely to require specialist care and accommodation provided by Extra Care accommodation.
The emerging Rother Core Strategy (20014) reflects this by identifying the demographic profile of the area is ageing, raising concerns over the future provision of adequate support and accommodation for the growing elderly population. The provision of suitable housing to meet the diverse needs of the population is addressed in Policy CO5: Supporting Older People which states that 'Initiative and developments will be supported which... Increases the range of available housing options with care and support services in accessible locations.' It is therefore clear that the development of specialist accommodation for the elderly is a priority for the Council.
In light of the above, we consider that it is of vital importance that the emerging CIL does not prohibit the development of specialist accommodation for the elderly at a time when there is an existing and urgent need for this form of development and that by not properly assessing this form of development the proposed CIL rate would threaten the delivery of the relevant Development Plan contravening Government Guidance.
We therefore commend the Council on their decision to provide a Viability Assessment of Sheltered / Retirement housing and Extra Care accommodation.
Several aspects of said appraisals however deeply concerning, these issues this will be covered in the remainder of this letter:
Land Values
A crucial element of such a CIL viability appraisal will be to ensure that the baseline land value against which the viability of the retirement scheme is assessed properly reflects the spatial pattern of land use in the locality
The average age of residents in retirement housing is around 79 years old, they are likely to have abandoned car ownership, be of lower mobility and/or rely on close proximity to public transport. For this reason retirement housing developers will not consider sites that are over a walking distance of approximately half a mile from a town or local centre with a good range of shops and services to meet a resident's daily needs. The result is that retirement housing can only be built on limited range of sites, typically high value, previously developed sites in close proximity to town centres. It is worth noting that the Community Infrastructure Levy Guidance recognises that previously developed sites are those where the CIL charge is likely to have the most effect, stating; The exercise should focus on strategic sites on which the relevant Plan (the Local Plan in England, Local Development Plan in Wales, and the London Plan in London )] relies, and those sites where the impact of the levy on economic viability is likely to be most significant (such as brownfield sites) (Paragraph 5, Chapter 2:2:2:4 How should development be valued for the purposes of the levy?).
A Viability Assessment for specialist accommodation for the elderly should therefore provide a development scenario on a previously developed site within 0.4 miles of a town centre. This is recognised in the Retirement Housing Group's briefing note (attached).
McCarthy and Stone typically develop sheltered /retirement housing schemes of between 40-50 units and Extra Care accommodation schemes at circa50-60 units as a critical mass of units is required to make the communal facilities and care provision feasible. Developments tend to be circa 3 storeys given the urban and suburban locations, surrounding storey heights and the needs of the user. We typically expect to see c40-50dph per floor of development for these schemes.
A 60 unit development as tested in the Peter Brett Associates Viability Assessment would therefore require a site of 0.5 hectares.
We have prepared the following table which compares the land cost of a typical 0.5ha site using the benchmark land values detailed in Viability Assessment.
Bexhill Urban Extension - (Benchmark Land Value per ha) £700,000
Bexhill Urban Extension - (Cost of a 0.5 ha site) £350,000
Bexhill / Hastings Fringe (Greenfield) - (Benchmark Land Value per ha) £725,000 Bexhill / Hastings Fringe (Greenfield) - (Cost of a 0.5 ha site) £362,500
West Bexhill - (Benchmark Land Value per ha) £850,000
West Bexhill - (Cost of a 0.5 ha site) £425,000
East Bexhill - (Benchmark Land Value per ha) £700,000
East Bexhill - (Cost of a 0.5 ha site) £350,000
Battle - (Benchmark Land Value per ha) £1,000,000
East Bexhill - (Cost of a 0.5 ha site) £500,000
Rye - (Benchmark Land Value per ha) £1,000,000
East Bexhill - (Cost of a 0.5 ha site) £500,000
Based on the above, it would appear that the land costs used in this appraisal have been significantly underplayed.
In our experience the land prices proposed significantly underplay the cost of a 0.5 hectare site in close proximity to a town centre. Sites located in these areas would inevitably benefit from an existing use, for example a commercial or residential property that is no longer fit for purpose, and the cost of land proposed would not in most instance meet the existing use value on such a use, let alone provide a reasonable uplift for a developer.
McCarthy and Stone have recently achieved planning permission at Hillborough House, Little Common, Bexhill (Application Ref: RR/2014/687/P) on the 14th July 2014. During viability negotiations for this scheme the DVS agreed that a suitable Benchmark Land Value for the scheme was £1,050,000 for the 0.49hectare site. This is comfortably double the Benchmark Land Values for West Bexhill detailed in the Viability appraisal.
Based on the above, it would appear that the land costs used for previously developed land have been significantly underplayed.
Site Abnormals
Previously developed sites regularly require extensive remediation / demolition works that are provided at an extra cost to developers. These do not appear to have been factored into the viability appraisals.
External costs are usually in the range of 10-15% so it would be appropriate to allow for an additional 5% on previously developed land to factor in abnormals.
Sustainability
We note the PBA viability appraisal utilises residential build costs derived from the Build Cost Information Service (BCIS). We have no objection to the use of this database.
We do dispute however that the BCIS cost are fully inclusive of Code for Sustainable Homes requirement (CfSH). This is because the BCIS figures are based on data collected over a 15 year period. We dispute that the market has been widely building to CfSH Levels 3 and 4 since 2009, in particular CfSH Level 4. It cannot therefore be the case that such costs fall within the BCIS figure.
We consider a 4% uplift on the BCIS costs is required to meet current building regulations. This was accepted by the DVS in the viability discussions on the Little Common site.
We also note that as of April 2014 the Building Regulations have effectively incorporated the enhanced energy requirements equivalent to CfSH Level 4.
Summary
In light of the above McCarthy and Stone are deeply sceptical about the results asserted by PBA in their Viability Assessment. Internal viability appraisals put forward by McCarthy and Stone demonstrate that the level of CIL proposed would render both Extra Care and Sheltered / Retirement housing unviable.
The Viability Appraisal provides scant details on the viability assumptions used for Sheltered / Retirement housing and in particular Extra Care accommodation we would appreciate the opportunity to examine the viability appraisals in greater detail and request that these are made publicly available.
Supporting documents submitted with the representations:
Final Assessment Report: http://www.rother.gov.uk/CHttpHandler.ashx?id=22394&p=0
RHG CIL Briefing Note: http://www.rother.gov.uk/CHttpHandler.ashx?id=22395&p=0
Rother BCIS June 2014: http://www.rother.gov.uk/CHttpHandler.ashx?id=22396&p=0
Object
Community Infrastructure Levy (CIL) Preliminary Draft Charging Schedule and Regulation 123 List
Q9. Do you have any further comments on the PDCS?
Representation ID: 21742
Received: 26/09/2014
Respondent: McCarthy and Stone
Agent: The Planning Bureau Limited
A crucial element of a CIL viability appraisal is to ensure baseline land values reflect the spatial pattern of land-use in the locality
Retirement housing developers will not consider sites of more than half a mile from a town/local centre with a good range of shops/services to meet a resident's daily needs. The result is that retirement housing can only be built on a limited range of sites.
A Viability Assessment for specialist elderley accommodation should therefore provide a development scenario on a pdl site within 0.4 miles of a town centre.
The land costs used have been significantly underplayed.
This is a representation on behalf of McCarthy & Stone Retirement Lifestyles Ltd. As the market leaders in the provision of retirement housing for sale to the elderly, McCarthy & Stone Retirement Lifestyles Ltd considers that with its extensive experience and expertise in providing development of this nature it is well placed to provide informed comments on the emerging Rother District Council Community Infrastructure Levy insofar as it affects or relates to housing for the elderly.
The CIL Guidance published in February 2014 by the Department for Communities and Local Government (DCLG) states consistently that 'In proposing a levy rate(s) charging authorities should show that the proposed rate o(or rates) would not threaten delivery of the relevant Plan as a whole' (Paragraph 29).
The CIL Guidance also stresses the importance of this principle to individual market sectors that play an important role in meeting housing need, housing supply and the delivery of the Development Plan, such as specialist accommodation for the elderly. This is relevant in the context of Paragraph 37 of the Guidance:
"... However, resulting charging schedules should not impact disproportionately on particular sectors or specialist forms of accommodation and charging Authorities should consider views of developers at an early stage".
Where the provision of specialist accommodation for the elderly plays a clear role in meeting housing needs in the emerging or extant Development Plan, as it does in the context of the Rother Local Development Framework, by not properly considering the effect of CIL on this form of development the Council would be putting the objective of the Development Plan at risk and thereby contravening Government Guidance.
Growing Elderly Population
The National Planning Policy Framework stipulates that the planning system should be 'supporting strong, vibrant and healthy communities' and highlights the need to 'deliver a wide choice of high quality homes, widen opportunities for home ownership and create sustainable, inclusive and mixed communities. Local planning authorities should plan for a mix of housing based on current and future demographic trends, market trends and the needs of different groups in the community...such as...older people' [emphasis added].
The recently published National Planning Practice Guidance reaffirms this in the guidance for assessing housing need in the plan making process entitled 'How should the needs for all types of housing be addressed?' (Paragraph: 021 Reference ID: 2a-021-20140306) and a separate subsection is provided for 'Housing for older people'. This stipulates that "the need to provide housing for older people is critical given the projected increase in the number of households aged 65 and over accounts for over half of the new households (Department for Communities and Local Government Household Projections 2013). Plan makers will need to consider the size, location and quantity of dwellings needed in the future for older people in order to allow them to move. This could free up houses that are under occupied. The age profile of the population can be drawn from the Census data. Projections of population and households by age group should also be used. The future needs of older persons housing broken down by tenure and type (e.g. Sheltered, enhanced sheltered, extra care, registered care) should be assessed and can be obtained from a number of online tool kits provided by the sector. The assessment should set out the level of need for residential institutions (use class C2). But identifying the need for particular types of general housing, such as bungalows, is equally important."
The "What Homes Where Toolkit" developed by the Home Builders Federation uses statistical data and projections from the Office of National Statistics (ONS) and the Department for Communities and Local Government (DCLG) to provide useful data on current and future housing needs. The table below has been replicated from the toolkit and shows the projected change to the demographic profile of Rother between 2008 and 2033
In line with the rest of the country, this toolkit demonstrates that the demographic profile of the Authority is projected to age. The proportion of the population aged 60 and over is projected to increase from 36.7% to 47.5% between 2008 and 2033. It should be taken into account that this is a significantly higher proportion of people over the age of 60 compared to average trends across the UK (27.8%). The largest proportional increases in the older population are expected to be of the 'frail' elderly, those aged 75 and over, who are more likely to require specialist care and accommodation provided by Extra Care accommodation.
The emerging Rother Core Strategy (20014) reflects this by identifying the demographic profile of the area is ageing, raising concerns over the future provision of adequate support and accommodation for the growing elderly population. The provision of suitable housing to meet the diverse needs of the population is addressed in Policy CO5: Supporting Older People which states that 'Initiative and developments will be supported which... Increases the range of available housing options with care and support services in accessible locations.' It is therefore clear that the development of specialist accommodation for the elderly is a priority for the Council.
In light of the above, we consider that it is of vital importance that the emerging CIL does not prohibit the development of specialist accommodation for the elderly at a time when there is an existing and urgent need for this form of development and that by not properly assessing this form of development the proposed CIL rate would threaten the delivery of the relevant Development Plan contravening Government Guidance.
We therefore commend the Council on their decision to provide a Viability Assessment of Sheltered / Retirement housing and Extra Care accommodation.
Several aspects of said appraisals however deeply concerning, these issues this will be covered in the remainder of this letter:
Land Values
A crucial element of such a CIL viability appraisal will be to ensure that the baseline land value against which the viability of the retirement scheme is assessed properly reflects the spatial pattern of land use in the locality
The average age of residents in retirement housing is around 79 years old, they are likely to have abandoned car ownership, be of lower mobility and/or rely on close proximity to public transport. For this reason retirement housing developers will not consider sites that are over a walking distance of approximately half a mile from a town or local centre with a good range of shops and services to meet a resident's daily needs. The result is that retirement housing can only be built on limited range of sites, typically high value, previously developed sites in close proximity to town centres. It is worth noting that the Community Infrastructure Levy Guidance recognises that previously developed sites are those where the CIL charge is likely to have the most effect, stating; The exercise should focus on strategic sites on which the relevant Plan (the Local Plan in England, Local Development Plan in Wales, and the London Plan in London )] relies, and those sites where the impact of the levy on economic viability is likely to be most significant (such as brownfield sites) (Paragraph 5, Chapter 2:2:2:4 How should development be valued for the purposes of the levy?).
A Viability Assessment for specialist accommodation for the elderly should therefore provide a development scenario on a previously developed site within 0.4 miles of a town centre. This is recognised in the Retirement Housing Group's briefing note (attached).
McCarthy and Stone typically develop sheltered /retirement housing schemes of between 40-50 units and Extra Care accommodation schemes at circa50-60 units as a critical mass of units is required to make the communal facilities and care provision feasible. Developments tend to be circa 3 storeys given the urban and suburban locations, surrounding storey heights and the needs of the user. We typically expect to see c40-50dph per floor of development for these schemes.
A 60 unit development as tested in the Peter Brett Associates Viability Assessment would therefore require a site of 0.5 hectares.
We have prepared the following table which compares the land cost of a typical 0.5ha site using the benchmark land values detailed in Viability Assessment.
Bexhill Urban Extension - (Benchmark Land Value per ha) £700,000
Bexhill Urban Extension - (Cost of a 0.5 ha site) £350,000
Bexhill / Hastings Fringe (Greenfield) - (Benchmark Land Value per ha) £725,000 Bexhill / Hastings Fringe (Greenfield) - (Cost of a 0.5 ha site) £362,500
West Bexhill - (Benchmark Land Value per ha) £850,000
West Bexhill - (Cost of a 0.5 ha site) £425,000
East Bexhill - (Benchmark Land Value per ha) £700,000
East Bexhill - (Cost of a 0.5 ha site) £350,000
Battle - (Benchmark Land Value per ha) £1,000,000
East Bexhill - (Cost of a 0.5 ha site) £500,000
Rye - (Benchmark Land Value per ha) £1,000,000
East Bexhill - (Cost of a 0.5 ha site) £500,000
Based on the above, it would appear that the land costs used in this appraisal have been significantly underplayed.
In our experience the land prices proposed significantly underplay the cost of a 0.5 hectare site in close proximity to a town centre. Sites located in these areas would inevitably benefit from an existing use, for example a commercial or residential property that is no longer fit for purpose, and the cost of land proposed would not in most instance meet the existing use value on such a use, let alone provide a reasonable uplift for a developer.
McCarthy and Stone have recently achieved planning permission at Hillborough House, Little Common, Bexhill (Application Ref: RR/2014/687/P) on the 14th July 2014. During viability negotiations for this scheme the DVS agreed that a suitable Benchmark Land Value for the scheme was £1,050,000 for the 0.49hectare site. This is comfortably double the Benchmark Land Values for West Bexhill detailed in the Viability appraisal.
Based on the above, it would appear that the land costs used for previously developed land have been significantly underplayed.
Site Abnormals
Previously developed sites regularly require extensive remediation / demolition works that are provided at an extra cost to developers. These do not appear to have been factored into the viability appraisals.
External costs are usually in the range of 10-15% so it would be appropriate to allow for an additional 5% on previously developed land to factor in abnormals.
Sustainability
We note the PBA viability appraisal utilises residential build costs derived from the Build Cost Information Service (BCIS). We have no objection to the use of this database.
We do dispute however that the BCIS cost are fully inclusive of Code for Sustainable Homes requirement (CfSH). This is because the BCIS figures are based on data collected over a 15 year period. We dispute that the market has been widely building to CfSH Levels 3 and 4 since 2009, in particular CfSH Level 4. It cannot therefore be the case that such costs fall within the BCIS figure.
We consider a 4% uplift on the BCIS costs is required to meet current building regulations. This was accepted by the DVS in the viability discussions on the Little Common site.
We also note that as of April 2014 the Building Regulations have effectively incorporated the enhanced energy requirements equivalent to CfSH Level 4.
Summary
In light of the above McCarthy and Stone are deeply sceptical about the results asserted by PBA in their Viability Assessment. Internal viability appraisals put forward by McCarthy and Stone demonstrate that the level of CIL proposed would render both Extra Care and Sheltered / Retirement housing unviable.
The Viability Appraisal provides scant details on the viability assumptions used for Sheltered / Retirement housing and in particular Extra Care accommodation we would appreciate the opportunity to examine the viability appraisals in greater detail and request that these are made publicly available.
Supporting documents submitted with the representations:
Final Assessment Report: http://www.rother.gov.uk/CHttpHandler.ashx?id=22394&p=0
RHG CIL Briefing Note: http://www.rother.gov.uk/CHttpHandler.ashx?id=22395&p=0
Rother BCIS June 2014: http://www.rother.gov.uk/CHttpHandler.ashx?id=22396&p=0
Object
Community Infrastructure Levy (CIL) Preliminary Draft Charging Schedule and Regulation 123 List
Q9. Do you have any further comments on the PDCS?
Representation ID: 21743
Received: 26/09/2014
Respondent: McCarthy and Stone
Agent: The Planning Bureau Limited
Site Abnormals
Previously developed sites regularly require extensive remediation / demolition works that are provided at an extra cost to developers. These do not appear to have been factored into the viability appraisals.
External costs are usually in the range of 10-15% so it would be appropriate to allow for an additional 5% on previously developed land to factor in abnormals.
This is a representation on behalf of McCarthy & Stone Retirement Lifestyles Ltd. As the market leaders in the provision of retirement housing for sale to the elderly, McCarthy & Stone Retirement Lifestyles Ltd considers that with its extensive experience and expertise in providing development of this nature it is well placed to provide informed comments on the emerging Rother District Council Community Infrastructure Levy insofar as it affects or relates to housing for the elderly.
The CIL Guidance published in February 2014 by the Department for Communities and Local Government (DCLG) states consistently that 'In proposing a levy rate(s) charging authorities should show that the proposed rate o(or rates) would not threaten delivery of the relevant Plan as a whole' (Paragraph 29).
The CIL Guidance also stresses the importance of this principle to individual market sectors that play an important role in meeting housing need, housing supply and the delivery of the Development Plan, such as specialist accommodation for the elderly. This is relevant in the context of Paragraph 37 of the Guidance:
"... However, resulting charging schedules should not impact disproportionately on particular sectors or specialist forms of accommodation and charging Authorities should consider views of developers at an early stage".
Where the provision of specialist accommodation for the elderly plays a clear role in meeting housing needs in the emerging or extant Development Plan, as it does in the context of the Rother Local Development Framework, by not properly considering the effect of CIL on this form of development the Council would be putting the objective of the Development Plan at risk and thereby contravening Government Guidance.
Growing Elderly Population
The National Planning Policy Framework stipulates that the planning system should be 'supporting strong, vibrant and healthy communities' and highlights the need to 'deliver a wide choice of high quality homes, widen opportunities for home ownership and create sustainable, inclusive and mixed communities. Local planning authorities should plan for a mix of housing based on current and future demographic trends, market trends and the needs of different groups in the community...such as...older people' [emphasis added].
The recently published National Planning Practice Guidance reaffirms this in the guidance for assessing housing need in the plan making process entitled 'How should the needs for all types of housing be addressed?' (Paragraph: 021 Reference ID: 2a-021-20140306) and a separate subsection is provided for 'Housing for older people'. This stipulates that "the need to provide housing for older people is critical given the projected increase in the number of households aged 65 and over accounts for over half of the new households (Department for Communities and Local Government Household Projections 2013). Plan makers will need to consider the size, location and quantity of dwellings needed in the future for older people in order to allow them to move. This could free up houses that are under occupied. The age profile of the population can be drawn from the Census data. Projections of population and households by age group should also be used. The future needs of older persons housing broken down by tenure and type (e.g. Sheltered, enhanced sheltered, extra care, registered care) should be assessed and can be obtained from a number of online tool kits provided by the sector. The assessment should set out the level of need for residential institutions (use class C2). But identifying the need for particular types of general housing, such as bungalows, is equally important."
The "What Homes Where Toolkit" developed by the Home Builders Federation uses statistical data and projections from the Office of National Statistics (ONS) and the Department for Communities and Local Government (DCLG) to provide useful data on current and future housing needs. The table below has been replicated from the toolkit and shows the projected change to the demographic profile of Rother between 2008 and 2033
In line with the rest of the country, this toolkit demonstrates that the demographic profile of the Authority is projected to age. The proportion of the population aged 60 and over is projected to increase from 36.7% to 47.5% between 2008 and 2033. It should be taken into account that this is a significantly higher proportion of people over the age of 60 compared to average trends across the UK (27.8%). The largest proportional increases in the older population are expected to be of the 'frail' elderly, those aged 75 and over, who are more likely to require specialist care and accommodation provided by Extra Care accommodation.
The emerging Rother Core Strategy (20014) reflects this by identifying the demographic profile of the area is ageing, raising concerns over the future provision of adequate support and accommodation for the growing elderly population. The provision of suitable housing to meet the diverse needs of the population is addressed in Policy CO5: Supporting Older People which states that 'Initiative and developments will be supported which... Increases the range of available housing options with care and support services in accessible locations.' It is therefore clear that the development of specialist accommodation for the elderly is a priority for the Council.
In light of the above, we consider that it is of vital importance that the emerging CIL does not prohibit the development of specialist accommodation for the elderly at a time when there is an existing and urgent need for this form of development and that by not properly assessing this form of development the proposed CIL rate would threaten the delivery of the relevant Development Plan contravening Government Guidance.
We therefore commend the Council on their decision to provide a Viability Assessment of Sheltered / Retirement housing and Extra Care accommodation.
Several aspects of said appraisals however deeply concerning, these issues this will be covered in the remainder of this letter:
Land Values
A crucial element of such a CIL viability appraisal will be to ensure that the baseline land value against which the viability of the retirement scheme is assessed properly reflects the spatial pattern of land use in the locality
The average age of residents in retirement housing is around 79 years old, they are likely to have abandoned car ownership, be of lower mobility and/or rely on close proximity to public transport. For this reason retirement housing developers will not consider sites that are over a walking distance of approximately half a mile from a town or local centre with a good range of shops and services to meet a resident's daily needs. The result is that retirement housing can only be built on limited range of sites, typically high value, previously developed sites in close proximity to town centres. It is worth noting that the Community Infrastructure Levy Guidance recognises that previously developed sites are those where the CIL charge is likely to have the most effect, stating; The exercise should focus on strategic sites on which the relevant Plan (the Local Plan in England, Local Development Plan in Wales, and the London Plan in London )] relies, and those sites where the impact of the levy on economic viability is likely to be most significant (such as brownfield sites) (Paragraph 5, Chapter 2:2:2:4 How should development be valued for the purposes of the levy?).
A Viability Assessment for specialist accommodation for the elderly should therefore provide a development scenario on a previously developed site within 0.4 miles of a town centre. This is recognised in the Retirement Housing Group's briefing note (attached).
McCarthy and Stone typically develop sheltered /retirement housing schemes of between 40-50 units and Extra Care accommodation schemes at circa50-60 units as a critical mass of units is required to make the communal facilities and care provision feasible. Developments tend to be circa 3 storeys given the urban and suburban locations, surrounding storey heights and the needs of the user. We typically expect to see c40-50dph per floor of development for these schemes.
A 60 unit development as tested in the Peter Brett Associates Viability Assessment would therefore require a site of 0.5 hectares.
We have prepared the following table which compares the land cost of a typical 0.5ha site using the benchmark land values detailed in Viability Assessment.
Bexhill Urban Extension - (Benchmark Land Value per ha) £700,000
Bexhill Urban Extension - (Cost of a 0.5 ha site) £350,000
Bexhill / Hastings Fringe (Greenfield) - (Benchmark Land Value per ha) £725,000 Bexhill / Hastings Fringe (Greenfield) - (Cost of a 0.5 ha site) £362,500
West Bexhill - (Benchmark Land Value per ha) £850,000
West Bexhill - (Cost of a 0.5 ha site) £425,000
East Bexhill - (Benchmark Land Value per ha) £700,000
East Bexhill - (Cost of a 0.5 ha site) £350,000
Battle - (Benchmark Land Value per ha) £1,000,000
East Bexhill - (Cost of a 0.5 ha site) £500,000
Rye - (Benchmark Land Value per ha) £1,000,000
East Bexhill - (Cost of a 0.5 ha site) £500,000
Based on the above, it would appear that the land costs used in this appraisal have been significantly underplayed.
In our experience the land prices proposed significantly underplay the cost of a 0.5 hectare site in close proximity to a town centre. Sites located in these areas would inevitably benefit from an existing use, for example a commercial or residential property that is no longer fit for purpose, and the cost of land proposed would not in most instance meet the existing use value on such a use, let alone provide a reasonable uplift for a developer.
McCarthy and Stone have recently achieved planning permission at Hillborough House, Little Common, Bexhill (Application Ref: RR/2014/687/P) on the 14th July 2014. During viability negotiations for this scheme the DVS agreed that a suitable Benchmark Land Value for the scheme was £1,050,000 for the 0.49hectare site. This is comfortably double the Benchmark Land Values for West Bexhill detailed in the Viability appraisal.
Based on the above, it would appear that the land costs used for previously developed land have been significantly underplayed.
Site Abnormals
Previously developed sites regularly require extensive remediation / demolition works that are provided at an extra cost to developers. These do not appear to have been factored into the viability appraisals.
External costs are usually in the range of 10-15% so it would be appropriate to allow for an additional 5% on previously developed land to factor in abnormals.
Sustainability
We note the PBA viability appraisal utilises residential build costs derived from the Build Cost Information Service (BCIS). We have no objection to the use of this database.
We do dispute however that the BCIS cost are fully inclusive of Code for Sustainable Homes requirement (CfSH). This is because the BCIS figures are based on data collected over a 15 year period. We dispute that the market has been widely building to CfSH Levels 3 and 4 since 2009, in particular CfSH Level 4. It cannot therefore be the case that such costs fall within the BCIS figure.
We consider a 4% uplift on the BCIS costs is required to meet current building regulations. This was accepted by the DVS in the viability discussions on the Little Common site.
We also note that as of April 2014 the Building Regulations have effectively incorporated the enhanced energy requirements equivalent to CfSH Level 4.
Summary
In light of the above McCarthy and Stone are deeply sceptical about the results asserted by PBA in their Viability Assessment. Internal viability appraisals put forward by McCarthy and Stone demonstrate that the level of CIL proposed would render both Extra Care and Sheltered / Retirement housing unviable.
The Viability Appraisal provides scant details on the viability assumptions used for Sheltered / Retirement housing and in particular Extra Care accommodation we would appreciate the opportunity to examine the viability appraisals in greater detail and request that these are made publicly available.
Supporting documents submitted with the representations:
Final Assessment Report: http://www.rother.gov.uk/CHttpHandler.ashx?id=22394&p=0
RHG CIL Briefing Note: http://www.rother.gov.uk/CHttpHandler.ashx?id=22395&p=0
Rother BCIS June 2014: http://www.rother.gov.uk/CHttpHandler.ashx?id=22396&p=0
Object
Community Infrastructure Levy (CIL) Preliminary Draft Charging Schedule and Regulation 123 List
Q9. Do you have any further comments on the PDCS?
Representation ID: 21744
Received: 26/09/2014
Respondent: McCarthy and Stone
Agent: The Planning Bureau Limited
We note the viability appraisal utilises residential build costs derived from the Build Cost Information Service (BCIS). We have no objection to the use of this.
We do dispute that the BCIS cost are fully inclusive of Code for Sustainable Homes requirement. This is because BCIS figures are based on data collected over a 15-year period. We dispute the market has been widely building to CfSH Levels 3 and 4 since 2009. It cannot therefore be that such costs fall within the BCIS figure.
We consider a 4% uplift on the BCIS costs is required to meet current building regulations.
This is a representation on behalf of McCarthy & Stone Retirement Lifestyles Ltd. As the market leaders in the provision of retirement housing for sale to the elderly, McCarthy & Stone Retirement Lifestyles Ltd considers that with its extensive experience and expertise in providing development of this nature it is well placed to provide informed comments on the emerging Rother District Council Community Infrastructure Levy insofar as it affects or relates to housing for the elderly.
The CIL Guidance published in February 2014 by the Department for Communities and Local Government (DCLG) states consistently that 'In proposing a levy rate(s) charging authorities should show that the proposed rate o(or rates) would not threaten delivery of the relevant Plan as a whole' (Paragraph 29).
The CIL Guidance also stresses the importance of this principle to individual market sectors that play an important role in meeting housing need, housing supply and the delivery of the Development Plan, such as specialist accommodation for the elderly. This is relevant in the context of Paragraph 37 of the Guidance:
"... However, resulting charging schedules should not impact disproportionately on particular sectors or specialist forms of accommodation and charging Authorities should consider views of developers at an early stage".
Where the provision of specialist accommodation for the elderly plays a clear role in meeting housing needs in the emerging or extant Development Plan, as it does in the context of the Rother Local Development Framework, by not properly considering the effect of CIL on this form of development the Council would be putting the objective of the Development Plan at risk and thereby contravening Government Guidance.
Growing Elderly Population
The National Planning Policy Framework stipulates that the planning system should be 'supporting strong, vibrant and healthy communities' and highlights the need to 'deliver a wide choice of high quality homes, widen opportunities for home ownership and create sustainable, inclusive and mixed communities. Local planning authorities should plan for a mix of housing based on current and future demographic trends, market trends and the needs of different groups in the community...such as...older people' [emphasis added].
The recently published National Planning Practice Guidance reaffirms this in the guidance for assessing housing need in the plan making process entitled 'How should the needs for all types of housing be addressed?' (Paragraph: 021 Reference ID: 2a-021-20140306) and a separate subsection is provided for 'Housing for older people'. This stipulates that "the need to provide housing for older people is critical given the projected increase in the number of households aged 65 and over accounts for over half of the new households (Department for Communities and Local Government Household Projections 2013). Plan makers will need to consider the size, location and quantity of dwellings needed in the future for older people in order to allow them to move. This could free up houses that are under occupied. The age profile of the population can be drawn from the Census data. Projections of population and households by age group should also be used. The future needs of older persons housing broken down by tenure and type (e.g. Sheltered, enhanced sheltered, extra care, registered care) should be assessed and can be obtained from a number of online tool kits provided by the sector. The assessment should set out the level of need for residential institutions (use class C2). But identifying the need for particular types of general housing, such as bungalows, is equally important."
The "What Homes Where Toolkit" developed by the Home Builders Federation uses statistical data and projections from the Office of National Statistics (ONS) and the Department for Communities and Local Government (DCLG) to provide useful data on current and future housing needs. The table below has been replicated from the toolkit and shows the projected change to the demographic profile of Rother between 2008 and 2033
In line with the rest of the country, this toolkit demonstrates that the demographic profile of the Authority is projected to age. The proportion of the population aged 60 and over is projected to increase from 36.7% to 47.5% between 2008 and 2033. It should be taken into account that this is a significantly higher proportion of people over the age of 60 compared to average trends across the UK (27.8%). The largest proportional increases in the older population are expected to be of the 'frail' elderly, those aged 75 and over, who are more likely to require specialist care and accommodation provided by Extra Care accommodation.
The emerging Rother Core Strategy (20014) reflects this by identifying the demographic profile of the area is ageing, raising concerns over the future provision of adequate support and accommodation for the growing elderly population. The provision of suitable housing to meet the diverse needs of the population is addressed in Policy CO5: Supporting Older People which states that 'Initiative and developments will be supported which... Increases the range of available housing options with care and support services in accessible locations.' It is therefore clear that the development of specialist accommodation for the elderly is a priority for the Council.
In light of the above, we consider that it is of vital importance that the emerging CIL does not prohibit the development of specialist accommodation for the elderly at a time when there is an existing and urgent need for this form of development and that by not properly assessing this form of development the proposed CIL rate would threaten the delivery of the relevant Development Plan contravening Government Guidance.
We therefore commend the Council on their decision to provide a Viability Assessment of Sheltered / Retirement housing and Extra Care accommodation.
Several aspects of said appraisals however deeply concerning, these issues this will be covered in the remainder of this letter:
Land Values
A crucial element of such a CIL viability appraisal will be to ensure that the baseline land value against which the viability of the retirement scheme is assessed properly reflects the spatial pattern of land use in the locality
The average age of residents in retirement housing is around 79 years old, they are likely to have abandoned car ownership, be of lower mobility and/or rely on close proximity to public transport. For this reason retirement housing developers will not consider sites that are over a walking distance of approximately half a mile from a town or local centre with a good range of shops and services to meet a resident's daily needs. The result is that retirement housing can only be built on limited range of sites, typically high value, previously developed sites in close proximity to town centres. It is worth noting that the Community Infrastructure Levy Guidance recognises that previously developed sites are those where the CIL charge is likely to have the most effect, stating; The exercise should focus on strategic sites on which the relevant Plan (the Local Plan in England, Local Development Plan in Wales, and the London Plan in London )] relies, and those sites where the impact of the levy on economic viability is likely to be most significant (such as brownfield sites) (Paragraph 5, Chapter 2:2:2:4 How should development be valued for the purposes of the levy?).
A Viability Assessment for specialist accommodation for the elderly should therefore provide a development scenario on a previously developed site within 0.4 miles of a town centre. This is recognised in the Retirement Housing Group's briefing note (attached).
McCarthy and Stone typically develop sheltered /retirement housing schemes of between 40-50 units and Extra Care accommodation schemes at circa50-60 units as a critical mass of units is required to make the communal facilities and care provision feasible. Developments tend to be circa 3 storeys given the urban and suburban locations, surrounding storey heights and the needs of the user. We typically expect to see c40-50dph per floor of development for these schemes.
A 60 unit development as tested in the Peter Brett Associates Viability Assessment would therefore require a site of 0.5 hectares.
We have prepared the following table which compares the land cost of a typical 0.5ha site using the benchmark land values detailed in Viability Assessment.
Bexhill Urban Extension - (Benchmark Land Value per ha) £700,000
Bexhill Urban Extension - (Cost of a 0.5 ha site) £350,000
Bexhill / Hastings Fringe (Greenfield) - (Benchmark Land Value per ha) £725,000 Bexhill / Hastings Fringe (Greenfield) - (Cost of a 0.5 ha site) £362,500
West Bexhill - (Benchmark Land Value per ha) £850,000
West Bexhill - (Cost of a 0.5 ha site) £425,000
East Bexhill - (Benchmark Land Value per ha) £700,000
East Bexhill - (Cost of a 0.5 ha site) £350,000
Battle - (Benchmark Land Value per ha) £1,000,000
East Bexhill - (Cost of a 0.5 ha site) £500,000
Rye - (Benchmark Land Value per ha) £1,000,000
East Bexhill - (Cost of a 0.5 ha site) £500,000
Based on the above, it would appear that the land costs used in this appraisal have been significantly underplayed.
In our experience the land prices proposed significantly underplay the cost of a 0.5 hectare site in close proximity to a town centre. Sites located in these areas would inevitably benefit from an existing use, for example a commercial or residential property that is no longer fit for purpose, and the cost of land proposed would not in most instance meet the existing use value on such a use, let alone provide a reasonable uplift for a developer.
McCarthy and Stone have recently achieved planning permission at Hillborough House, Little Common, Bexhill (Application Ref: RR/2014/687/P) on the 14th July 2014. During viability negotiations for this scheme the DVS agreed that a suitable Benchmark Land Value for the scheme was £1,050,000 for the 0.49hectare site. This is comfortably double the Benchmark Land Values for West Bexhill detailed in the Viability appraisal.
Based on the above, it would appear that the land costs used for previously developed land have been significantly underplayed.
Site Abnormals
Previously developed sites regularly require extensive remediation / demolition works that are provided at an extra cost to developers. These do not appear to have been factored into the viability appraisals.
External costs are usually in the range of 10-15% so it would be appropriate to allow for an additional 5% on previously developed land to factor in abnormals.
Sustainability
We note the PBA viability appraisal utilises residential build costs derived from the Build Cost Information Service (BCIS). We have no objection to the use of this database.
We do dispute however that the BCIS cost are fully inclusive of Code for Sustainable Homes requirement (CfSH). This is because the BCIS figures are based on data collected over a 15 year period. We dispute that the market has been widely building to CfSH Levels 3 and 4 since 2009, in particular CfSH Level 4. It cannot therefore be the case that such costs fall within the BCIS figure.
We consider a 4% uplift on the BCIS costs is required to meet current building regulations. This was accepted by the DVS in the viability discussions on the Little Common site.
We also note that as of April 2014 the Building Regulations have effectively incorporated the enhanced energy requirements equivalent to CfSH Level 4.
Summary
In light of the above McCarthy and Stone are deeply sceptical about the results asserted by PBA in their Viability Assessment. Internal viability appraisals put forward by McCarthy and Stone demonstrate that the level of CIL proposed would render both Extra Care and Sheltered / Retirement housing unviable.
The Viability Appraisal provides scant details on the viability assumptions used for Sheltered / Retirement housing and in particular Extra Care accommodation we would appreciate the opportunity to examine the viability appraisals in greater detail and request that these are made publicly available.
Supporting documents submitted with the representations:
Final Assessment Report: http://www.rother.gov.uk/CHttpHandler.ashx?id=22394&p=0
RHG CIL Briefing Note: http://www.rother.gov.uk/CHttpHandler.ashx?id=22395&p=0
Rother BCIS June 2014: http://www.rother.gov.uk/CHttpHandler.ashx?id=22396&p=0
Object
Community Infrastructure Levy (CIL) Preliminary Draft Charging Schedule and Regulation 123 List
Q9. Do you have any further comments on the PDCS?
Representation ID: 21745
Received: 26/09/2014
Respondent: McCarthy and Stone
Agent: The Planning Bureau Limited
McCarthy and Stone are deeply sceptical about the results asserted by PBA in their Viability Assessment. Internal viability appraisals put forward by McCarthy and Stone demonstrate that the level of CIL proposed would render both Extra Care and Sheltered / Retirement housing unviable.
The Viability Appraisal provides scant details on the viability assumptions used for Sheltered / Retirement housing and in particular Extra Care accommodation we would appreciate the opportunity to examine the viability appraisals in greater detail and request that these are made publicly available.
This is a representation on behalf of McCarthy & Stone Retirement Lifestyles Ltd. As the market leaders in the provision of retirement housing for sale to the elderly, McCarthy & Stone Retirement Lifestyles Ltd considers that with its extensive experience and expertise in providing development of this nature it is well placed to provide informed comments on the emerging Rother District Council Community Infrastructure Levy insofar as it affects or relates to housing for the elderly.
The CIL Guidance published in February 2014 by the Department for Communities and Local Government (DCLG) states consistently that 'In proposing a levy rate(s) charging authorities should show that the proposed rate o(or rates) would not threaten delivery of the relevant Plan as a whole' (Paragraph 29).
The CIL Guidance also stresses the importance of this principle to individual market sectors that play an important role in meeting housing need, housing supply and the delivery of the Development Plan, such as specialist accommodation for the elderly. This is relevant in the context of Paragraph 37 of the Guidance:
"... However, resulting charging schedules should not impact disproportionately on particular sectors or specialist forms of accommodation and charging Authorities should consider views of developers at an early stage".
Where the provision of specialist accommodation for the elderly plays a clear role in meeting housing needs in the emerging or extant Development Plan, as it does in the context of the Rother Local Development Framework, by not properly considering the effect of CIL on this form of development the Council would be putting the objective of the Development Plan at risk and thereby contravening Government Guidance.
Growing Elderly Population
The National Planning Policy Framework stipulates that the planning system should be 'supporting strong, vibrant and healthy communities' and highlights the need to 'deliver a wide choice of high quality homes, widen opportunities for home ownership and create sustainable, inclusive and mixed communities. Local planning authorities should plan for a mix of housing based on current and future demographic trends, market trends and the needs of different groups in the community...such as...older people' [emphasis added].
The recently published National Planning Practice Guidance reaffirms this in the guidance for assessing housing need in the plan making process entitled 'How should the needs for all types of housing be addressed?' (Paragraph: 021 Reference ID: 2a-021-20140306) and a separate subsection is provided for 'Housing for older people'. This stipulates that "the need to provide housing for older people is critical given the projected increase in the number of households aged 65 and over accounts for over half of the new households (Department for Communities and Local Government Household Projections 2013). Plan makers will need to consider the size, location and quantity of dwellings needed in the future for older people in order to allow them to move. This could free up houses that are under occupied. The age profile of the population can be drawn from the Census data. Projections of population and households by age group should also be used. The future needs of older persons housing broken down by tenure and type (e.g. Sheltered, enhanced sheltered, extra care, registered care) should be assessed and can be obtained from a number of online tool kits provided by the sector. The assessment should set out the level of need for residential institutions (use class C2). But identifying the need for particular types of general housing, such as bungalows, is equally important."
The "What Homes Where Toolkit" developed by the Home Builders Federation uses statistical data and projections from the Office of National Statistics (ONS) and the Department for Communities and Local Government (DCLG) to provide useful data on current and future housing needs. The table below has been replicated from the toolkit and shows the projected change to the demographic profile of Rother between 2008 and 2033
In line with the rest of the country, this toolkit demonstrates that the demographic profile of the Authority is projected to age. The proportion of the population aged 60 and over is projected to increase from 36.7% to 47.5% between 2008 and 2033. It should be taken into account that this is a significantly higher proportion of people over the age of 60 compared to average trends across the UK (27.8%). The largest proportional increases in the older population are expected to be of the 'frail' elderly, those aged 75 and over, who are more likely to require specialist care and accommodation provided by Extra Care accommodation.
The emerging Rother Core Strategy (20014) reflects this by identifying the demographic profile of the area is ageing, raising concerns over the future provision of adequate support and accommodation for the growing elderly population. The provision of suitable housing to meet the diverse needs of the population is addressed in Policy CO5: Supporting Older People which states that 'Initiative and developments will be supported which... Increases the range of available housing options with care and support services in accessible locations.' It is therefore clear that the development of specialist accommodation for the elderly is a priority for the Council.
In light of the above, we consider that it is of vital importance that the emerging CIL does not prohibit the development of specialist accommodation for the elderly at a time when there is an existing and urgent need for this form of development and that by not properly assessing this form of development the proposed CIL rate would threaten the delivery of the relevant Development Plan contravening Government Guidance.
We therefore commend the Council on their decision to provide a Viability Assessment of Sheltered / Retirement housing and Extra Care accommodation.
Several aspects of said appraisals however deeply concerning, these issues this will be covered in the remainder of this letter:
Land Values
A crucial element of such a CIL viability appraisal will be to ensure that the baseline land value against which the viability of the retirement scheme is assessed properly reflects the spatial pattern of land use in the locality
The average age of residents in retirement housing is around 79 years old, they are likely to have abandoned car ownership, be of lower mobility and/or rely on close proximity to public transport. For this reason retirement housing developers will not consider sites that are over a walking distance of approximately half a mile from a town or local centre with a good range of shops and services to meet a resident's daily needs. The result is that retirement housing can only be built on limited range of sites, typically high value, previously developed sites in close proximity to town centres. It is worth noting that the Community Infrastructure Levy Guidance recognises that previously developed sites are those where the CIL charge is likely to have the most effect, stating; The exercise should focus on strategic sites on which the relevant Plan (the Local Plan in England, Local Development Plan in Wales, and the London Plan in London )] relies, and those sites where the impact of the levy on economic viability is likely to be most significant (such as brownfield sites) (Paragraph 5, Chapter 2:2:2:4 How should development be valued for the purposes of the levy?).
A Viability Assessment for specialist accommodation for the elderly should therefore provide a development scenario on a previously developed site within 0.4 miles of a town centre. This is recognised in the Retirement Housing Group's briefing note (attached).
McCarthy and Stone typically develop sheltered /retirement housing schemes of between 40-50 units and Extra Care accommodation schemes at circa50-60 units as a critical mass of units is required to make the communal facilities and care provision feasible. Developments tend to be circa 3 storeys given the urban and suburban locations, surrounding storey heights and the needs of the user. We typically expect to see c40-50dph per floor of development for these schemes.
A 60 unit development as tested in the Peter Brett Associates Viability Assessment would therefore require a site of 0.5 hectares.
We have prepared the following table which compares the land cost of a typical 0.5ha site using the benchmark land values detailed in Viability Assessment.
Bexhill Urban Extension - (Benchmark Land Value per ha) £700,000
Bexhill Urban Extension - (Cost of a 0.5 ha site) £350,000
Bexhill / Hastings Fringe (Greenfield) - (Benchmark Land Value per ha) £725,000 Bexhill / Hastings Fringe (Greenfield) - (Cost of a 0.5 ha site) £362,500
West Bexhill - (Benchmark Land Value per ha) £850,000
West Bexhill - (Cost of a 0.5 ha site) £425,000
East Bexhill - (Benchmark Land Value per ha) £700,000
East Bexhill - (Cost of a 0.5 ha site) £350,000
Battle - (Benchmark Land Value per ha) £1,000,000
East Bexhill - (Cost of a 0.5 ha site) £500,000
Rye - (Benchmark Land Value per ha) £1,000,000
East Bexhill - (Cost of a 0.5 ha site) £500,000
Based on the above, it would appear that the land costs used in this appraisal have been significantly underplayed.
In our experience the land prices proposed significantly underplay the cost of a 0.5 hectare site in close proximity to a town centre. Sites located in these areas would inevitably benefit from an existing use, for example a commercial or residential property that is no longer fit for purpose, and the cost of land proposed would not in most instance meet the existing use value on such a use, let alone provide a reasonable uplift for a developer.
McCarthy and Stone have recently achieved planning permission at Hillborough House, Little Common, Bexhill (Application Ref: RR/2014/687/P) on the 14th July 2014. During viability negotiations for this scheme the DVS agreed that a suitable Benchmark Land Value for the scheme was £1,050,000 for the 0.49hectare site. This is comfortably double the Benchmark Land Values for West Bexhill detailed in the Viability appraisal.
Based on the above, it would appear that the land costs used for previously developed land have been significantly underplayed.
Site Abnormals
Previously developed sites regularly require extensive remediation / demolition works that are provided at an extra cost to developers. These do not appear to have been factored into the viability appraisals.
External costs are usually in the range of 10-15% so it would be appropriate to allow for an additional 5% on previously developed land to factor in abnormals.
Sustainability
We note the PBA viability appraisal utilises residential build costs derived from the Build Cost Information Service (BCIS). We have no objection to the use of this database.
We do dispute however that the BCIS cost are fully inclusive of Code for Sustainable Homes requirement (CfSH). This is because the BCIS figures are based on data collected over a 15 year period. We dispute that the market has been widely building to CfSH Levels 3 and 4 since 2009, in particular CfSH Level 4. It cannot therefore be the case that such costs fall within the BCIS figure.
We consider a 4% uplift on the BCIS costs is required to meet current building regulations. This was accepted by the DVS in the viability discussions on the Little Common site.
We also note that as of April 2014 the Building Regulations have effectively incorporated the enhanced energy requirements equivalent to CfSH Level 4.
Summary
In light of the above McCarthy and Stone are deeply sceptical about the results asserted by PBA in their Viability Assessment. Internal viability appraisals put forward by McCarthy and Stone demonstrate that the level of CIL proposed would render both Extra Care and Sheltered / Retirement housing unviable.
The Viability Appraisal provides scant details on the viability assumptions used for Sheltered / Retirement housing and in particular Extra Care accommodation we would appreciate the opportunity to examine the viability appraisals in greater detail and request that these are made publicly available.
Supporting documents submitted with the representations:
Final Assessment Report: http://www.rother.gov.uk/CHttpHandler.ashx?id=22394&p=0
RHG CIL Briefing Note: http://www.rother.gov.uk/CHttpHandler.ashx?id=22395&p=0
Rother BCIS June 2014: http://www.rother.gov.uk/CHttpHandler.ashx?id=22396&p=0
