Economic viability - Revision history

Designing Buildings at 12:52, 7 September 2020

2020-09-07T12:52:39Z

← Older revision		Revision as of 12:52, 7 September 2020
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	Viability is a measure of the likely success of a particular action or set of actions. An assessment of economic viability is an evaluation of the various economic effects that may result from the implementation of a particular project. This assessment will help decision makers decide whether a project is feasible or not.		Viability is a measure of the likely success of a particular action or set of actions. An assessment of economic viability is an evaluation of the various economic effects that may result from the implementation of a particular project. This assessment will help decision makers decide whether a project is feasible or not.

−	Assessing economic viability is informed by financial analysis and the main tool which is usually used for this is cost benefit analysis (CBA). This involves expressing costs and benefits in monetary terms to allow comparisons to be made. But other non-financial benefits may also be explored. If at the end of the exercise the benefits exceed the costs, the project may be considered to be economically viable.s	+	Assessing economic viability is informed by financial analysis and the main tool which is usually used for this is cost benefit analysis (CBA). This involves expressing costs and benefits in monetary terms to allow comparisons to be made. But other non-financial benefits may also be explored. If at the end of the exercise the benefits exceed the costs, the project may be considered to be economically viable.

	For example, assessing the economic viability of a stadium might include both direct and indirect considerations such as:		For example, assessing the economic viability of a stadium might include both direct and indirect considerations such as:
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	* The Community Infrastructure Levy (Amendment) Regulations 2014.		* The Community Infrastructure Levy (Amendment) Regulations 2014.
	* Community infrastructure levy commencement notice.		* Community infrastructure levy commencement notice.
		+	* Contingent obligation.
	* Developer contributions.		* Developer contributions.
	* Infrastructure.		* Infrastructure.
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	* What approvals are needed before construction begins.		* What approvals are needed before construction begins.

−	[[Category:Cost_/_business_planning]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_Legislation]] [[Category:DCN_Policy]] [[Category:Cost_/_business_planning]]

90.248.170.53 at 22:17, 11 December 2019

2019-12-11T22:17:03Z

← Older revision		Revision as of 22:17, 11 December 2019
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	Viability is a measure of the likely success of a particular action or set of actions. An assessment of economic viability is an evaluation of the various economic effects that may result from the implementation of a particular project. This assessment will help decision makers decide whether a project is feasible or not.		Viability is a measure of the likely success of a particular action or set of actions. An assessment of economic viability is an evaluation of the various economic effects that may result from the implementation of a particular project. This assessment will help decision makers decide whether a project is feasible or not.

−	Assessing economic viability is informed by financial analysis and the main tool which is usually used for this is cost benefit analysis (CBA). This involves expressing costs and benefits in monetary terms to allow comparisons to be made. But other non-financial benefits may also be explored. If at the end of the exercise the benefits exceed the costs, the project may be considered to be economically viable.	+	Assessing economic viability is informed by financial analysis and the main tool which is usually used for this is cost benefit analysis (CBA). This involves expressing costs and benefits in monetary terms to allow comparisons to be made. But other non-financial benefits may also be explored. If at the end of the exercise the benefits exceed the costs, the project may be considered to be economically viable.s

	For example, assessing the economic viability of a stadium might include both direct and indirect considerations such as:		For example, assessing the economic viability of a stadium might include both direct and indirect considerations such as:

Designing Buildings at 11:39, 4 October 2019

2019-10-04T11:39:16Z

← Older revision		Revision as of 11:39, 4 October 2019
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	* Allow comparison of alternative proposals.		* Allow comparison of alternative proposals.

−	~~Section 106 agreements are legal agreements between local authorities and developers. They are linked to~~ planning applications ~~and aim to make proposed developments more beneficial to the~~ local ~~community~~. ~~So, if for example, a local authority considers a housing scheme involves negative impacts~~, it ~~may impose section 106 obligations on~~ the ~~developer which must be fulfilled if~~ planning ~~is to be granted~~. ~~These obligations may include things such as:~~	+	The economic viability of a project has traditionally not been a consideration in the assessment of planning applications by local authorities. However, it is now considered in relation to the imposition of planning obligations, planning conditions and community infrastructure levy contributions.

−	* Extra public open space	+	Developers may commission viability assessments that appraise the economic case for a scheme. This will demonstrate whether after all the development costs (including those imposed by the local authority) have been met, there is an acceptable margin of profit relative to the level of risk associated with the development.
−	* Town centre improvements	+
−	* A higher ratio of ~~affordable housing units~~.	+

−	~~Developers may commission section 106 viability assessments from private specialists that appraise~~ the ~~economic case for~~ a ~~scheme~~. ~~This will demonstrate whether after all the~~ development costs ~~have been met~~, ~~there~~ is ~~an acceptable margin~~ of ~~profit relative~~ to the ~~level~~ of ~~risk associated with~~ the development.	+	In addition, the NPPF introduced a viability test for local plans and for decision making. The NPPF states that ‘Pursuing sustainable development requires careful attention to viability and costs in plan-making and decision-taking. Plans should be deliverable. Therefore, the sites and the scale of development identified in the plan should not be subject to such a scale of obligations and policy burdens that their ability to be developed viably is threatened. To ensure viability, the costs of any requirements likely to be applied to development, such as requirements for affordable housing, standards, infrastructure contributions or other requirements should, when taking account of the normal cost of development and mitigation, provide competitive returns to a willing land owner and willing developer to enable the development to be deliverable.’
		+
		+	For more information see: Viability test.

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

Designing Buildings at 11:33, 4 October 2019

2019-10-04T11:33:07Z

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−	Viability ~~involves assessing~~ the ~~outcomes~~ of a particular action or set of actions. An assessment of economic viability is an evaluation of the various economic effects that may result from the implementation of a particular project. This assessment will help decision makers decide whether a project is feasible or not.	+	Viability is a measure of the likely success of a particular action or set of actions. An assessment of economic viability is an evaluation of the various economic effects that may result from the implementation of a particular project. This assessment will help decision makers decide whether a project is feasible or not.

−	Assessing economic viability is informed by financial analysis and the main tool which is usually used for this is cost benefit analysis (CBA). This involves expressing costs and benefits in monetary terms to allow comparisons to be made. But other non-financial benefits may also be explored. If at the end of the exercise the benefits exceed the costs, the project may be ~~seen as~~ economically viable.	+	Assessing economic viability is informed by financial analysis and the main tool which is usually used for this is cost benefit analysis (CBA). This involves expressing costs and benefits in monetary terms to allow comparisons to be made. But other non-financial benefits may also be explored. If at the end of the exercise the benefits exceed the costs, the project may be considered to be economically viable.

−	So, assessing the economic viability of a ~~proposed~~ stadium ~~can~~ include both direct and indirect considerations such as:	+	For example, assessing the economic viability of a stadium might include both direct and indirect considerations such as:

	* The total cost of the project.		* The total cost of the project.
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	* Uplift in local land and property values.		* Uplift in local land and property values.
	* Potential new jobs created in the community.		* Potential new jobs created in the community.
−	* Impacts ~~on the local community eg,~~ increased congestion.	+	* Impacts such as increased congestion, noise, dust and so on.
−	* Local opposition to the scheme and possible ~~disruptions.~~	+	* Local opposition to the scheme and possible disruption.
−	* Effect of the long construction period on the community.	+
	* How sustainable is the project?		* How sustainable is the project?
−	* Will climate change threaten the ~~assets~~?	+	* Will climate change threaten the building?
	* Will it be flexible enough to adjust to future changes, regulations, ownership, user needs?		* Will it be flexible enough to adjust to future changes, regulations, ownership, user needs?

−	Depending on the size of the project, the economic viability analyses may examine ~~local and~~ regional implications.	+	Depending on the size of the project, the economic viability analyses may also examine regional, national or global implications.

−	Economic viability typically evaluates a project concept, ie, at the plan-making stage and before implementation. ~~Doing this retrospectively would be a pointless undertaking as~~ it ~~would be too late to take any corrective action.~~	+	Economic viability typically evaluates a project concept, ie, at the plan-making stage and before implementation. However, it may also assess the ongoing viability of an existing project / building etc.
−		+
−	~~When evaluating the project concept, teams~~ may ~~embark on exercises to identify the economic factors that will affect~~ the project ~~and make appropriate policy recommendations from their findings~~. ~~When such factors are assessed and found overall to be economically beneficial, the project may be given the green light. Otherwise it will not go ahead.~~	+
−		+
−	~~== Why conduct economic viability assessments (EVA)? ==~~	+

	Conducting EVA’s can:		Conducting EVA’s can:

−	* Help confirm a solid basis for ~~public~~ investment.	+	* Help confirm a solid basis for investment.
	* Fulfil regulatory requirements.		* Fulfil regulatory requirements.
	* Help justify a project to shareholders and other stakeholders.		* Help justify a project to shareholders and other stakeholders.
−	* ~~Provide an economic justification for future critics~~ of ~~a scheme~~.	+	* Allow comparison of alternative proposals.

−	~~=== Section 106 (economic) viability assessments ===~~	+	Section 106 agreements are legal agreements between local authorities and developers. They are linked to planning applications and aim to make proposed developments more beneficial to the local community. So, if for example, a local authority considers a housing scheme involves negative impacts, it may impose section 106 obligations on the developer which must be fulfilled if planning is to be granted. These obligations may include things such as:
−		+
−	Section 106 agreements are legal agreements between local authorities and developers. They are linked to planning applications and aim to make proposed developments more beneficial to the local community. So, if for example, a local authority considers a housing scheme involves negative impacts, it may impose section 106 obligations on the developer which must be fulfilled if planning is to be granted. These obligations may include ~~adding~~:	+

	* Extra public open space		* Extra public open space
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	* A higher ratio of affordable housing units.		* A higher ratio of affordable housing units.

−	Developers may commission section 106 viability assessments from private specialists that appraise the economic case for a scheme. This will demonstrate whether after all the development costs have been met, there is an acceptable margin of profit ~~relevant~~ to the level of risk associated with the development~~. Usually, if the developers’ profit is below 20% of total costs, the development will not be considered viable.~~	+	Developers may commission section 106 viability assessments from private specialists that appraise the economic case for a scheme. This will demonstrate whether after all the development costs have been met, there is an acceptable margin of profit relative to the level of risk associated with the development.
−		+
−	~~An explanation of section 106 agreements can be found in the Town and Country Planning Act~~.	+

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

Designing Buildings at 07:15, 28 September 2019

2019-09-28T07:15:31Z

← Older revision		Revision as of 07:15, 28 September 2019
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	* Provide an economic justification for future critics of a scheme.		* Provide an economic justification for future critics of a scheme.

−	=== ~~S106~~ (economic) viability assessments ===	+	=== Section 106 (economic) viability assessments ===

−	~~S106~~ agreements are legal agreements between local authorities and developers. They are linked to planning applications and aim to make proposed developments more beneficial to the local community. So, if for example, a local authority considers a housing scheme involves negative impacts, it may impose ~~S106~~ obligations on the developer which must be fulfilled if planning is to be granted. These obligations may include adding:	+	Section 106 agreements are legal agreements between local authorities and developers. They are linked to planning applications and aim to make proposed developments more beneficial to the local community. So, if for example, a local authority considers a housing scheme involves negative impacts, it may impose section 106 obligations on the developer which must be fulfilled if planning is to be granted. These obligations may include adding:

	* Extra public open space		* Extra public open space
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	* A higher ratio of affordable housing units.		* A higher ratio of affordable housing units.

−	Developers may commission ~~s106~~ viability assessments from private specialists that appraise the economic case for a scheme. This will demonstrate whether after all the development costs have been met, there is an acceptable margin of profit relevant to the level of risk associated with the development. Usually, if the developers’ profit is below 20% of total costs, the development will not be considered viable.	+	Developers may commission section 106 viability assessments from private specialists that appraise the economic case for a scheme. This will demonstrate whether after all the development costs have been met, there is an acceptable margin of profit relevant to the level of risk associated with the development. Usually, if the developers’ profit is below 20% of total costs, the development will not be considered viable.

−	An explanation of ~~s106~~ agreements can be found in the Town and Country Planning Act.	+	An explanation of section 106 agreements can be found in the Town and Country Planning Act.

−	Related articles on Designing Buildings Wiki	+	= Related articles on Designing Buildings Wiki =

	* The Community Infrastructure Levy (Amendment) Regulations 2014.		* The Community Infrastructure Levy (Amendment) Regulations 2014.

Editor at 16:57, 27 September 2019

2019-09-27T16:57:48Z

← Older revision		Revision as of 16:57, 27 September 2019
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	* Provide an economic justification for future critics of a scheme.		* Provide an economic justification for future critics of a scheme.

−	S106 (economic) viability assessments	+	=== S106 (economic) viability assessments ===

	S106 agreements are legal agreements between local authorities and developers. They are linked to planning applications and aim to make proposed developments more beneficial to the local community. So, if for example, a local authority considers a housing scheme involves negative impacts, it may impose S106 obligations on the developer which must be fulfilled if planning is to be granted. These obligations may include adding:		S106 agreements are legal agreements between local authorities and developers. They are linked to planning applications and aim to make proposed developments more beneficial to the local community. So, if for example, a local authority considers a housing scheme involves negative impacts, it may impose S106 obligations on the developer which must be fulfilled if planning is to be granted. These obligations may include adding:

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2019-09-27T16:56:09Z

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Viability involves assessing the outcomes of a particular action or set of actions. An assessment of economic viability is an evaluation of the various economic effects that may result from the implementation of a particular project. This assessment will help decision makers decide whether a project is feasible or not.

Assessing economic viability is informed by financial analysis and the main tool which is usually used for this is cost benefit analysis (CBA). This involves expressing costs and benefits in monetary terms to allow comparisons to be made. But other non-financial benefits may also be explored. If at the end of the exercise the benefits exceed the costs, the project may be seen as economically viable.

So, assessing the economic viability of a proposed stadium can include both direct and indirect considerations such as:

* The total cost of the project.
* Will the project secure adequate financing?
* Will profits cover operating costs over the project’s lifetime?
* Uplift in local land and property values.
* Potential new jobs created in the community.
* Impacts on the local community eg, increased congestion.
* Local opposition to the scheme and possible disruptions.
* Effect of the long construction period on the community.
* How sustainable is the project?
* Will climate change threaten the assets?
* Will it be flexible enough to adjust to future changes, regulations, ownership, user needs?

Depending on the size of the project, the economic viability analyses may examine local and regional implications.

Economic viability typically evaluates a project concept, ie, at the plan-making stage and before implementation. Doing this retrospectively would be a pointless undertaking as it would be too late to take any corrective action.

When evaluating the project concept, teams may embark on exercises to identify the economic factors that will affect the project and make appropriate policy recommendations from their findings. When such factors are assessed and found overall to be economically beneficial, the project may be given the green light. Otherwise it will not go ahead.

== Why conduct economic viability assessments (EVA)? ==

Conducting EVA’s can:

* Help confirm a solid basis for public investment.
* Fulfil regulatory requirements.
* Help justify a project to shareholders and other stakeholders.
* Provide an economic justification for future critics of a scheme.

S106 (economic) viability assessments

S106 agreements are legal agreements between local authorities and developers. They are linked to planning applications and aim to make proposed developments more beneficial to the local community. So, if for example, a local authority considers a housing scheme involves negative impacts, it may impose S106 obligations on the developer which must be fulfilled if planning is to be granted. These obligations may include adding:

* Extra public open space
* Town centre improvements
* A higher ratio of affordable housing units.

Developers may commission s106 viability assessments from private specialists that appraise the economic case for a scheme. This will demonstrate whether after all the development costs have been met, there is an acceptable margin of profit relevant to the level of risk associated with the development. Usually, if the developers’ profit is below 20% of total costs, the development will not be considered viable.

An explanation of s106 agreements can be found in the Town and Country Planning Act.

Related articles on Designing Buildings Wiki

* The Community Infrastructure Levy (Amendment) Regulations 2014.
* Community infrastructure levy commencement notice.
* Developer contributions.
* Infrastructure.
* Microeconomics.
* Social Value Act.
* National Planning Policy Framework.
* Planning Act 2008.
* Planning permission.
* Planning conditions.
* Planning obligations.
* Review announced of the Community Infrastructure Levy.
* Section 106 agreement.
* Section 106 exemption.
* Viability test.
* What approvals are needed before construction begins.

[[Category:Cost_/_business_planning]]