ESP shares development risk and profit in a practical distributed model
The ESP cost model can be understood by firstly considering a speculative developer’s planned profit and subdividing this amongst a number of partners. Profit is always required by developers to match the development risk. The ESP model is about sharing this risk and accordingly sharing the profit or savings amongst early adopters and enabled self builders.
As part of the UrbanBuzz funded project we completed an early economic appraisal for a site in the North East and concluded there are a number of projected long term cost benefits of ESP for its different stakeholders.
ESP has the potential to raise residual land values (tested in the North East by Three Dragons)
Buying an option as an early adopter can deliver the greatest savings where individuals collaborate with the design professionals to develop the urban design codes and pattern books.
Enabled Self Builders are offered choice in the level to which they fit out their homes. Interior comnpletion can be phased to suit indivudal budgets, and the capital cost of development spread over a longer period. There is afterall no need to fit out the second bathroom just yet.
Enabling Developers reduce their risk in planning and market, by bringing on early adopters as partners in the planning submission and supporting enabled self builders. Capital costs, financing and marketing costs are therefore greatly reduced.