Oireachtas Joint and Select Committees

Tuesday, 23 September 2014

Joint Oireachtas Committee on Environment, Culture and the Gaeltacht

Commercial and Domestic Property Supply and Demand: Property Industry Ireland

2:50 pm

Mr. Tom Phillips:

I want to mention financial contributions. I believe it is right that developers should pay a levy, because development must be paid for. During the Celtic tiger years we had developer-led planning, but my concern is that we now have a push for plan-led development. I argue we should have viable plan-led development. We should have a situation where the planning system is aware of the market, because there is quite a push among my fellow planners to ignore the market, as if it is irrelevant, and to look only at proper planning. We must look at both together and ensure we have viable plan led development.

If we produce a planning scheme, the financial contributions should be tested to ensure the scheme is capable of being delivered. Certain lands have been zoned for particular purposes, but they are non viable because the financial contributions that would be payable are so large one could not carry out a viability test. Therefore, at the time of the writing of a local area plan, financial contributions should be provided for it.

Let me give two prime examples. Both Dublin Docklands and Cherrywood strategic development zones have provisions in the planning schemes for developers to contribute towards the delivery of infrastructure to ensure these developments happen. However, in last year's development levy guidelines, the then Minister for the Environment, Community and Local Government, said that development levies should be reduced by 50% in strategic development zones, SDZs, to incentivise development in these areas where a plan has been agreed as to what happens. However, in both Dublin city and in Cherrywood, the planning authorities, which act as development agencies, have increased the levies because so much infrastructure is required to make them happen. While the Minister has said that we will reduce the levies in an SDZ and make developers outside that area contribute more to incentivise development in these places, delivery is going in the opposite direction. We cannot, for example, open a book and find out the development levy in the case of every one of the 31 areas in the country. One can do this as a personal exercise, but there is no central record of the information where we can see what we actually need.

In regard to the question on social housing, a report by DKM Economic Consultants looked at how the issue of social housing could be addressed. The development market is still waiting for delivery of the planning Bill to see how it will be addressed.

One of the options DKM put forward - the public was invited to make submissions - was inclusory zoning whereby a local authority would determine where social housing was required and zone land there to incentivise the bringing forward of development schemes. Of the six options, that is a very good one. It would be good to determine where housing is needed and how its development could be expedited. This could be done by incentivising developers to develop the lands identified, not necessarily by tax breaks but by reducing financial contributions in the areas. It would make development not only attractive but also viable.

Last week, the chief executive of NAMA was quoted as having said at the meeting in the Convention Centre that NAMA did not really develop between 2010 and 2013 because it was non-viable. It is only now becoming viable for people to carry out appraisals on land. We must ask what it takes to make the delivery of housing viable. It is not achieved by going back to the old days but by making sure that the financial contributions lead to viable plan-led development. I repeat the example of Kilternan. Having to pay €54,000 to a local authority to contribute for infrastructure for one apartment makes it completely and utterly non-viable.

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