Economic Viability

Abstract

The developer should by now have established whether he is likely to get planning permission for his development and whether there are any factors that may hinder his ability to carry it out. There is also the question of whether the developer will secure an adequate financial return and it is this question which will be considered in the following pages. It is no good identifying a site which in town planning terms is fine for a particular scheme if it fails the test of economic viability. This happened in the docklands area of London in the 1970s when local authorities produced a Master Plan for redevelopment of the area, showing the development potential for each and every parcel of land. They then sat back and nothing happened—one of the reasons being that the cost of making the sites developable rendered the resulting schemes uneconomic. The London Docklands Development Corporation has subsequently invested substantially in the area through the provision of infrastructure in order to balance the economic equation. It has also adopted a very market-responsive approach to the development of the area rather than seeking to imprint its own master plan on the area.