Part of morehousing.ca/proforma.

A "pro forma" is basically a business case, showing whether a housing project is economically viable or not. The basic idea is that land value is the expected selling price of the new building, minus all the costs of building it. If the land value is significantly greater than the current value of the property with its existing building, then the landowner will be willing to consider selling the property to a builder, or hiring a builder and redeveloping it themselves.

This interactive spreadsheet (created with Jspreadsheet CE v4) is an extremely simple pro forma which illustrates some key assumptions:

• Total floor space
• Selling price per square foot
• Total cost to build per square foot
• How much the landowner wants before considering redevelopment

Even small changes to the assumed selling price or costs will have a major impact on the economic viability of the project. So it's important to have room to accommodate these changes.