Mr. Terry Sheridan:

I thank the Vice Chairman and committee members for offering us the opportunity to contribute to the pre-legislative scrutiny of the general scheme of the planning and development (No. 1) Bill. As the Vice Chairman indicated, the Minister, Deputy Kelly, is keen to progress the Bill and have it enacted as soon as possible.

The primary background to the general scheme is the housing supply shortage issue, one of the most political and high-priority challenges faced by Government. The supply shortage is particularly acute in Dublin, where demand far outstrips supply, with consequential effects on house prices and rents.

Let us put the issue in context. At the height or peak of construction activity in 2006, over 93,000 houses were built nationally. The figure plummeted to a little over 8,000 units in 2013. There is a real need to increase the number of house completions gradually over several years to return to market equilibrium where supply equals demand.

The measures in the general scheme emanate largely from the Government's Construction 2020 strategy. These measures alone will not resolve the housing supply problems, which are multifaceted and require a broad–ranging co-ordinated approach. However, the intention is that they will help to make a start in addressing these problems.

The measures proposed in the general scheme include the amendment of the Part V provisions on social and affordable housing; the introduction of a vacant site levy aimed at incentivising the development of vacant and under-utilised sites in central urban areas; revised arrangements to enable the application of reduced development contribution levies by planning authorities; and the introduction of a mechanism to enable planning authorities to reduce the duration of planning permission in specific circumstances.

I will address these issues individually, starting with the proposed amendment to the Part V provisions. The general scheme proposes that the current obligation on developers to provide up to 20% of the land in a development for social and affordable housing be reduced to 10%, and that this be now apportioned for social housing only. The existing Part V arrangements, involving a 20% requirement for social and affordable housing, are a significant burden for developers in the current economic climate and one of the factors rendering many developments financially non-viable at present. It is further proposed that the affordability aspect of the current Part V arrangements should instead be pursued through other wider policy areas and, therefore, be removed from Part V, with only the social housing provisions being retained.

In addition, it is proposed that the on-site provision of social housing will become the predominant or default option for developers and local authorities under the new Part V provisions, with the alternative off-site option, for example, dwellings on other sites, only possible in specific exceptional circumstances, for example, where there is insufficient social housing demand at the location of the proposed development or where there is greater demand at another location. Furthermore, it is proposed that the option under the current Part V arrangements of developers making cash contributions to local authorities instead of providing housing units be discontinued.

It militates against the immediate delivery of social housing units and the mixed tenancy model which was one of the positive outcomes of Part V as it was originally constituted. In effect, it is proposed that the provision of housing units on-site or off-site will become the only possibilities under the new Part V arrangements.

The second main proposal in the general scheme relates to the proposed application of a vacant site levy by local authorities, if they wish to do so, to incentivise the development of vacant under-utilised sites in central urban areas, thereby ensuring such sites are brought into beneficial use. This is in line with action 23 in the Government’s Construction 2020 strategy. It is proposed that the levy will be applied on the registered owners of vacant and under-utilised sites in cities and towns with populations of more than 3,000 at a rate of 3% of the market valuation of the site, increasing by 1% per year up to a maximum of 6% in any individual year. These rates are broadly in line with those already applied under the derelict site levy. There are numerous vacant under-utilised urban sites throughout the length and breadth of the country. Dublin City Council has advised that approximately 600 sites in the area between the Grand Canal and the Royal Canal are lying dormant and undeveloped but are capable of being developed. If local authorities are to be entitled to apply the levy, in the first instance they will be required to provide for the development of vacant sites in specific locations within urban areas as a specific objective in their local development plans. This proposed measure would be supplemented by the application of reduced development contributions on such sites when planning permission is granted, having regard to the likelihood that when such sites are developed, their central locations will mean they will be able to avail of existing infrastructure rather than rely on the provision of new infrastructure at extra cost.