Economic Appraisal of 230 Belmont Road, Belfast. Carry out Residual valuation to

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Economic Appraisal of 230 Belmont Road, Belfast. Carry out Residual valuation to determine developer profit and see if the scheme is viable under 4 options + Cash flow approach Option 1: Status Quo – see if scheme is viable through residual method Option 2: On site provision Option 3: Off-site contribution @% of Gross Development Value Option 4: Social Housing Levy The viability of development depends on the economic return for the developer. That said, any scheme is meant to adhere to planning conditions and materiality in order to achieve wider environmental, ecological, social and public goals and interests. There remains contention as to the introduction of developer contributions (as per S76) within planning policy in Northern Ireland, and whether these negotiable ‘taxes’ on development will impact upon the economic feasibility of a site (scheme) and ultimately the provision of much needed housing. The introduction of such ‘contributions’ are perceived to be necessary for the delivery of much needed social and affordable housing for which the private market system is to ‘bear the cost’. There is considerable debate that Housing Associations should be the core supplier of such product and that the private sector should only provide costs associated with infrastructure. In light of this, you are tasked with producing a report on the economic viability of a particular development scheme currently on the open market. In order to do so, you should apply a residual valuation approach which accounts for the various developer contribution options whilst ensuring the requisite developer return/profit. Recently, the testing of developer (affordable housing) contributions has demonstrated that the introduction of S76 policy is ‘generally’ viable, nonetheless, the findings of the study also illustrated that this is a broad brush approach which neglects ‘site specific’ feasibility and ‘site-by-site’ economic assessment. You are therefore to advise in your report if any of the developer contribution options are ‘economically’ realisable and fully discuss and debate the nature of the ‘negotiation’ for the level of provision or financial payment related to the market evidence.

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