New report urges greater transparency in development viability across Wales

A new report examines how Wales can secure more public benefit from development, focusing on the link between land value capture and development viability in planning.

Written by Dr Edward Shepherd and Sahiti Bhalla, Land value capture and viability in Wales combines an overview of the policy context with insights from a workshop held at the School of Geography and Planning with 19 practitioners from across the public and private sectors.

Land value capture refers to the idea that when public development decisions and investment increase land values, a share of that uplift should help fund affordable homes and the infrastructure that supports new places to live.

Development viability for planning is the process by which development proposals are assessed for their potential to deliver such public benefits. The report links the debate to persistent pressures on affordable housing supply and the Welsh Government’s target to deliver 20,000 low-carbon social homes by 2026.

The report shows how development viability appraisal often becomes the point where developer and local authority expectations can clash. The authors argue that distrust can grow when assumptions about build costs, sales values and land values are not shared, and when different parties rely on different models or benchmarks.

Participants in the workshop also pointed to power imbalances in negotiations and differences in skills and access to market evidence. Landowner expectations regarding benchmark land value in viability assessment emerged as a recurring flashpoint, because it shapes how much development value is available for policy requirements such as affordable housing.

This suggests a need for national policy to provide clearer and better guidance regarding how benchmark land values should be determined in planning viability assessments so that landowner expectations do not unduly suppress the delivery of affordable housing.

The report sets out further steps to make outcomes more consistent and equitable. It emphasises the need for clear expectations in Local Development Plans, with renegotiation kept genuinely exceptional, and highlights how delays in plan preparation or site delivery can increase the risk of viability being reopened later.

It also calls for viability calculations and evidence to be made publicly available, and for the government to introduce a requirement for a central land market and viability database to improve transparency.

The authors also argue that Wales would benefit from comprehensive viability guidance set out in a Technical Advice Note developed through consultation, alongside further research to strengthen the evidence base on viability practice and delivery models.

The report suggests that longer-term progress towards solving the housing crisis also depends on delivery models with greater public sector leadership in land assembly and development.

The work was supported by the ESRC Impact Accelerator Account Strategic Impact Fund and builds on earlier ESRC-funded research led by Dr Shepherd.