Rural exception developments make a valuable contribution to their locations. There is a formal process that starts with the needs assessment survey you mentioned. This identifies current and future potential demand, without which a scheme cannot continue. Once the demand has been ascertained, the promoter, usually a housing association, but occasionally a social developer, will sit down with the Parish Council to discuss a range of options. This is what they are asking you to do now.
The survey will have indicated the required number, size and tenure of the properties required, although there may be some flexibility for negotiation, i.e. rental only, part buy/part rent, open market sale etc. The decisions about occupational eligibility rest with the Parish Council. The usual parameters are current residents of the parish, their immediate family (whether currently resident or not), former residents of the parish, people working in the parish, people attending full-time education in the parish, residents of neighbouring parishes who meet any of the agreed criteria etc. You can pick and choose from this list or add your own (within the requirements of housing and equal opportunities legislation!) Once agreed, the occupancy criteria remain valid in perpetuity, so you will always retain these properties as local homes for local people.
Why do we need rural exception schemes? They provide affordable high quality living at social rents well below the private rental market. They offer opportunities for young people to remain within their communities but fly the parental nest. Current housing legislation requires social landlords to allocate properties according to a points-based priority system that takes no account of issues such as "I was born here and have lived here all my life" "my entire family lives here" "I work here" etc. The schemes offer an easy downsizing opportunity for older people who no longer need a large family home, freeing up these family homes for those who do need them. They offer a cheaper alternative to poor-quality private rental properties for people on low incomes.
I have been involved in the delivery of two rural exception schemes and am about to embark upon my third.