Day Two of Development Economics, on Appraisals, by trainer Andrew Drury
It is a rare quality in an economics consultant to be able to speak simply and eloquently about the development economics, and their impact on affordable housing. Andrew held the attention of the audience for the entire day. The sessions were not only informative, but gave practical insights into the thinking behind development appraisals, of great use to housing association members and development officers alike. His knowledge was extensive, and he effortlessly dived into detail – such as alternative sources of funding the short-term deficit on leveraged loans – while maintaining a clear and logical sequence to his presentation.
One key question that Andrew returned to throughout the day was “what is an acceptable loss?” Premised on the fact that affordable housing appraisals will not be profit-making (else they would be standard developers), he demonstrated how inputs ranging from the cost of land to the source and nature of the housing grant/benefit could impact on the viability of schemes, and their ‘attractiveness’. His ability to wear a ‘developer’s hat’ and ‘chairman of a Housing Association hat’ to contrast views on viability / discounted cashflow were insightful, and clearly brought out the choices made by development managers in presenting schemes to others.
Additionally, by explaining the history of affordable housing and looking at new and emerging trends, he was able to explain, and sometimes predict, how the latest changes in the regulatory framework for new housing may impact on developers and tenants alike.