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Planning Essentials – Planning Calculations, 13th February 2014
This practical session gave advice on calculations used for key scheme data and how to
scrutinise technical information on daylight and sunlight requirements, viability,
density, and BREEAM scores for building sustainability.
Presentation summaries:
1. Welcome and Introductions – Vincent Goodstadt, past president RTPI
Vincent stressed it is critical planners fully understand the methodologies and formulas that
inform their decisions. The government often claims that planners’ default position is to say
‘no’. In reality, 80% of applications are approved and 90% of commercial ones are.
Businesses often value continuity and consistency that comes from the planning system,
which enables them to invest with confidence in certain areas. In 5 years, Vincent believes
that his planning labour generated £2bn of inward investment. Facts, measurements and
calculations are critical to challenging prejudices about planning. The National Planning
Policy Framework (NPPF 2012) demands that policymaking is derived from a proportionate
evidence base. This can mean that many documents must be consulted in order to authorize
just a few hundred houses.
What is cited? Often it is job creation and economic benefit. Vincent argued that few retail
developments really create additional jobs in the regional or national economy. In response,
planners need to apply economic arguments including consideration of diversionary and
displacement effects. Vincent cautioned against ‘the black box effect’. He encouraged
planners to question assumptions and not to treat calculations as gospel. Planners can be
over-reliant on the knowledge and expertise of others. Calculations are particularly
problematic if the person doing them has a vested interest in development (eg. if they have
been hired by a supermarket).
Retail Impact Assessments tend to underestimate potential impact(s) on existing shops. In
one instance, Vincent double checked figures and found that the turnover projections
provided for a new supermarket were lower than the turnover of the applicant’s least
successful store in the UK. Transport models like DELTA similarly rely on what assumptions
are put in as variables in the first place. Planners often simply accept the results but should
be very careful about this. They should instead take ownership of the process by questioning
data. As a Chief Officer, Vincent and his staff established the capacity to revise all
calculations in-house. This changed the dynamic of negotiations as they became better
informed than applicants.
2. Viability & Density Assessments – Dr Anthony Lee, BNP Paribas Real Estate
Anthony drew attention to the impact of growth on planning negotiations. We are in a
rising market again, which many developers and planners ignore. How can planning
authorities reflect growth in their practice and policies? He explained that the uplift in
value of a site that arises from a change in use is the key thing to keep in mind during
negotiations.
Planners try to capture some of that value uplift for the community in the form of
affordable housing (AH) and Section 106 (S106) payments. If land values go down, profit
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should be squeezed to keep the private and public proportions of a scheme’s budget in
equilibrium. But how far can you push the landowner before they refuse to take a
development forward because it’s not profitable enough? And who gets the lion’s share of
the land value that’s created by a scheme? When a scheme’s value drops, often the public
portion of the value takes the hit. In fact, landowners should share that burden.
Developers risk the same as before due to the costs of doing work but landowners do
nothing actively to bring a scheme forward. Developers claiming S106 should be cut to
make a scheme viable are usually assuming a fixed land value.
Anthony illustrated this with a worked example of urban extension to a commuter town
West of London in the M4 corridor. In the example, the key stance taken by the
landowners was that planning was causing viability issues. However, the benchmark land
value they were using took no account of site-specific factors and instead referred to
precedents from a borough-wide policy assessment. It’s often very difficult for developers
to convince landowners of true land values. Landowners seem to prefer battling the local
planning authority. They look at recent sales in the area rather than using a residual land
model that takes into account planning obligations.
In the absence of official guidance on land values, the Royal Institute of Chartered
Surveyors (RICS) has filled the vacuum. Anthony stated that although they claim to have
consulted with the planning system, what’s come out is very driven by landowner interests
and prejudices the LA position during S106 negotiations. RICS judge ‘market value’ by
examining as few as 2 or 3 recent site sales nearby. This ignores context – those sites may
have provided no AH or developers may have overpaid for them and made no profit. It also
doesn’t control for costs on the planning application for some sites that don’t apply
elsewhere. A basic residual appraisal will often show the land is worth far less.
Anthony suggested that planners avoid the RICS guidance completely when negotiating
obligations for schemes. Landowners will refuse to recognize market cycles and tend to
hold out for a value that’s unrealistic. But valuing land according to what the market
currently pays is back to front! Land’s value should depend on what can be developed
there with full policy compliance. Anthony also explained how growth can be used in
negotiations. For example, delaying the 106 payment can reduce finance costs for a
developer; they needn’t borrow money to pay before units are sold and occupied. This
saving can then be factored into the residual land model. Other options available include:
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Developer settles now with an offer above the current ‘viable’ position in
acknowledgement the land value will probably grow
Review actual viability outcomes – however, this hangs everything on the outcome
of the scheme and puts the 106 and AH ‘at risk’
Developer ‘buys out’ the principle of review - they offer to pay more up front now
and both parties walk away. Then if the market goes up the developer keeps more
profit
Various types of review can be structured into a Section 106 agreement:
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Pre-implementation review
Phase by phase viability review (with possible increases or reduction in onsite AH)
Retrospective review (prior to 95% of sales)
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Taking a firm position on land value and using growth to negotiate compromises in S106
agreements can strengthen the case for denying requests by developers to add more units
and increase density on viability grounds. Increasing density also takes advantage of
economies of scale that apply to a number of policy requirements (eg. schools, arterial
roads etc). They are usually able to adequately serve more units but shouldn’t be forced
to for the sake of landowners’ profit margins.
KEY MESSAGES:
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Cutting S106 and AH is not the only way to improve viability
Developers need to re-think their land values and use profit to hedge against risk
Use growth in discussions with developers; don’t just look at the market now
Avoid the RICS guidance route at all costs
During questions, attendees noted that landowners and developers use growth in their own
calculations. Agents publish forecasts of land values for residential and industrial land (eg.
Savills, Jones Laing LaSalle) that planners can consult. The move away from S106 toward
the Community Infrastructure Levy (CIL) will also change the nature of density
renegotiations as it levies schemes per square foot of residential or commercial provision.
Trading land on a gross hectare basis rather than net buildable hectare is bizarre;
landowners behave as if entire sites have value regardless of how much of a site can
accommodate development.
Density thresholds that affect viability were also discussed. In London, this normally
relates to height. There are key trigger points for schemes that add density but not
viability. For example at 6, 16 and 40 stories, build costs rise substantially. For tall
buildings, there are diminishing returns from density. The Three Dragons Toolkit
developed for the GLA is easy to use and calculates residual land value to accurately
gauge where site-specific costs (eg. decontamination) will make a scheme unviable unless
planning contributions are reduced.
3. Environmental Assessments - Jane Cassidy, Peter Brett Associates
Jane discussed BREEAM (Building Research Establishment Environmental Assessment
Methodology) assessments, which are increasingly important for planners as the NPPF has
introduced a presumption in favor of sustainable development. Attainment of sufficient
BREEAM score can be specified as a condition for planning permission. She argued that
BREEAM is inattentive to site-specific conditions and ignores context. Although sustainability
should be economic, social and environmental, BREEAM focuses exclusively on the
environmental sustainability of buildings rather than a development as a whole.
BREEAM measures the contributing factors in a building’s environmental performance,
which are weighted into a composite score to a give a rating from ‘unclassified’ to
‘outstanding’. Building Research Establishment (BRE) has decided the criteria in advance;
contextual factors are not taken into account. A developer then audits their design against
BRE assessment criteria. It’s a voluntary scheme with no obligation to take part, which
distinguishes it from the Code for Sustainable Homes. However, it is widely used and has
good buy-in amongst the construction industry.
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BREEAM assessment can be carried out for new buildings, major refurbishments of existing
buildings, new build extensions and fit-out of existing buildings. It has three stages: Preassessment estimate, Design (interim certificate) and Post-occupation (final certificate).
There are different versions of it for different uses (residential, office, retail etc). From
the BRE’s point of view, the BREEAM score should help sell a building – energy bills will be
low, people will like being in it and businesses will value its contribution to their
corporate social responsibility.
However, as it is an audit against set criteria rather than a judgment call, BREEAM allows
for no discretion or common sense. It was designed to reward the best buildings not to be
used as a standard. Furthermore, it often doesn’t assess actual use. For example, a
biomass heater may be unused post-occupation but still have contributed to the earlier
BREEAM rating. BREEAM does not necessarily result in the most sustainable building for a
specific location or use.
Additionally, BREEAM was not designed as a planning tool. After something’s built, there is
no sanction for violating an agreement to reach a certain BREEAM rating. Planners should
consequently make ‘excellent’ or ‘good’ a condition of permission for development at a
stage early enough that permission can be revoked – either pre-assessment or design. Jane
recommended doing this at the design (interim certificate) stage. Planning policy is now
leading to most buildings now being constructed with a BREEAM score of ‘very good’ at
least. Berkshire Council tried to insist on ‘excellent’ for all new development but found it
unworkable.
Planners should be careful of over-reliance on BREEAM and would be better off seeking
appraisal/assessment against all the NPPF’s principles for delivering sustainable
development where possible.
4. Sunlight & Daylight Assessments – Jonathan Lonergan, EB7 Ltd
Jonathan’s aim was to help make sense of the reams of analysis that are submitted to
planners in daylight / sunlight reports. Daylight is indirect sunlight reflected and scattered
by the earth’s atmosphere – in other words, general ambient light from the sky. Sunlight is
understood as direct sunlight availability to a window or amenity space.
Daylight and sunlight targets are required for most planning applications in urban areas.
Most LAs assess requirements by reference to BRE document 209: Site layout planning for
daylight and sunlight – A guide to good practice. The BRE guidance was originally aimed at
2 story residential environments. In 2011 it was updated to help LAs set targets more
appropriate for the urban context. The BRE guidance on site layout planning sets a
framework for interpreting daylight and sunlight test reports.
Most LAs are concerned only with impacts on residential neighbours. However, some do
consider impacts on commercial uses and uses in between commercial and residential like
hotels and student accommodation. It is important to consider the use within neighbouring
properties and their sensitivity to daylight and sunlight reduction when assessing a
planning application. This has to be on the agenda from day 1 as there are implications in
terms of the height and mass of buildings that can be permitted. A 25 degree ‘rule’ can be
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used as an initial scoping assessment and will sometimes enable decisions to be taken
about smaller developments (see below).
For larger developments, 3 technical assessments of daylight are used, which can be
modeled in a CAD test environment.
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Vertical Sky Component (VSC) - the daylight allowed in at the window face. This
does not require knowledge of internal layout (sill heights etc). It is relatively
simplistic and the strictest test. For this, the BRE suggests an absolute target of
27%, which is already rare in cities (where VSC is usually 10 - 23%). Losses of over
20% are noticeable so targets often adopt 20% as a maximum change threshold.
Crucially, the lower the starting levels of VSC, the more drastic the effect of
blocking more incoming daylight.
No-Sky Line (NSL) – measures indoor sky visibility at desk height (0.85m for
residential). This takes into account room size and multiple windows/aspects. BRE
suggests a 20% reduction is permitted and gives no absolute target.
Average Daylight Factor (ADF) - takes into account multiple variables – VSC, room
usage, room size, window transmittance, reflectance from walls/ceilings. It is
utilised for assessing internal amenity within a scheme. This is only recommended
for assessment of neighbouring properties in specific circumstances (eg. for
consecutive developments forming part of wider masterplan). Targets for this are
expressed as a percentage ratio of internal to external illuminance and depend on
the type of room (kitchen, bathroom, bedroom etc)
For daylight, NSL and VSC are the 2 main tests used. The guidelines encourage use of ADF
but it requires knowledge of the dimensions of an affected property. For sunlight, Annual
Probable Sunlight Hours (APSH) is used:
APSH
=
total possible sunlight
received sunlight
Windows within 90 degrees of due South should achieve 25% APSH in summer and 5%
during the winter months. BRE suggests that reductions to APSH of no more than 20%
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(summer) and 4% (winter) should be caused by new development. BRE targets are
guidelines rather than binding and setting alternative target values may be appropriate.
The principle of mirrored neighbour assessment can be applied, which says neighbours
shouldn’t develop too close to a shared boundary taking more than their fair share of
light. BRE 2011 suggests that existing properties should also respect neighbouring
development land. Therefore, new developments should be allowed a reciprocal impact
(see below).
For outdoor amenity areas, BRE 2011 states that at least 50% of amenity space should
receive 2 hours of sunlight on March 21st each year. The overshadowing impact of larger
buildings on wider areas (eg. skyscrapers on neighbourhoods) is usually evaluated
subjectively with the help of simulated models.
Jonathan also explained that Rights of Light (ROL) issues are separate from planning. ROL
concerns are more onerous for developers than daylight/sunlight targets as for relatively
minor infringements legal injunctions can be sought that prevent construction or require
demolition. ROL can be bought out but this can be expensive. ROL consequently shapes
design and design responses to a context for many developments. Section 237 of the Town
and Country Planning Act 1990 gives LAs power akin to a CPO in ROL disputes and is often
threatened. However, the LA has to have an interest in the site or take one on
temporarily, which has transaction costs. Significant regeneration benefit is required for
this route to be viable and the potential legal ramifications make that rare.
Overall, the context of a proposal is key to the level of flexibility that can be applied.
Planners should keep in mind:
• What rooms are adversely affected?
• The presence of balconies/buildings close to boundaries
• Precedent set by urban context and previously consented height/mass/shading
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5. Transport Assessments – Anne Crane, TfL
The focus of Anne’s presentation was the policy side of transport planning and the interface
between transport planning and the planning system. She explained the PTAL (public
transport accessibility level) measure used in many planning decisions. The methodology for
PTAL is explained on TfL’s website. PTAL reflects:
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Walking time to the public transport;
Reliability of the services
Number of services available within reasonable walking distance
The average waiting time for public transport.
But does not consider:
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The speed or utility of services;
Crowding, including the ability to board services; or,
Ease of interchange.
Generally speaking, the higher the PTAL, the better the access to public transport. The
link in planning decisions between PTAL and density stems from policy 3.4 of the London
Plan, which states that density should be related to how accessible a site is in terms of
public transport. It also encourages increasing density in situations where transport
proposals will improve public transport accessibility in the future.
Anne also raised a number of other issues around transport provision and housing
densities. A key issue is car parking and whether we should aim for car-lite or car-free
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schemes. These usually enable a higher density to be achieved. High end developers are
willing to pay for a lot of expensive basement car parking in order to give wealthy
purchasers a space, whereas developers doing less expensive schemes are much more
willing to cut back on parking for the extra room.
Using PTAL simplistically in planning decisions may encourage density to cluster where
transport provision is currently strong, renewing pressure on transport infrastructure
that’s already under strain. Anne suggested this should be factored into S106 negotiations,
citing the examples of Lend Lease paying for the expansion of Elephant & Castle tube
station’s ticket hall and planning contributions to Crossrail. High density proposals in outer
boroughs must also pay attention to how people reach public transport (often on foot) and
consider making improvements to the built environment around access nodes (bus stops,
train stations etc). Recently announced Alterations to the London Plan also insist on high
levels of cycle parking provision for all new developments:
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1 cycle space per 1 or 2 bedroom dwelling
2 cycle spaces per 3+ bedroom dwelling for residents
An additional 1 cycle space per 40 units for visitors
This is easy to comply with in outer London but it is a major challenge including the
required provision at more central sites. In response, Anne suggested developers should
make cycle parking flexible so it can also be used for other things like storage.
END
Disclaimer: Informal intern notes. Any errors and omissions are my own. Please email any
corrections to [email protected].

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