Oireachtas Joint and Select Committees

Thursday, 30 March 2017

Joint Oireachtas Committee on Housing, Planning, Community and Local Government

Quarterly Progress Report Strategy for Rented Sector: Department of Housing, Planning, Community and Local Government (Resumed)

2:00 pm

Mr. John McCarthy:

I thank the Chairman, Deputies and Senators. I will take some of these questions and I might ask Mr. Walsh to come in on some elements of LIHAF and on the fast-track planning process. In terms of the fast-track planning process, when I was last here, we had some discussion on this. There were a number of things that needed to be done and there are a few bits that still need to be done in terms of regulations and other issues. The final, critical piece in that was the completion of the work being done by An Bord Pleanála. There is an eight-week period that kicks on from that. That work has been done, so the intention at this stage is that process will kick off in the second week of May. Mr. Walsh might comment on some of the issues relating to fees in a moment.

In terms of the e-planning action to which Senator Boyhan referred, this is tied in to the other planning Bill before the Dáil, rather than the legislation that was dealt with before Christmas. The one that was dealt with before Christmas sort of bumped the other one back. It is a matter of legislation and getting time to move that Bill through, but I think Committee Stage is to be taken before Easter, I believe on 12 April. The intention is to try to have that legislation through the Houses by the summer so that we will be in a position to still deliver e-planning in accordance with the timeline we had envisaged.

We are trying to ensure the delay in the legislation does not give rise to a delay in the timeline for implementation of e-planning, which was going to be in quarter 3 or quarter 4 anyway. We are continuing to work on that and I know An Bord Pleanála is very active in the space and is aiming for quarter 3 for its online capacity.

On the costs issue raised by Deputy Ó Broin, two pieces of work are running in parallel and are designed to be completed by the end of quarter 2. One is being led by the Department and involves a range of stakeholders. It is looking at the range of the key component costs of housing construction, all the way from land through to different planning standards and design standards, the impact levies can have and, crucially, the whole issue of the cost of financing. We are trying to look at it in as rounded a way as possible because there can sometimes be an element in the debate on the cost of construction whereby different parties will say, "It is not us; it is that other element", and it tends to bounce around the place. This is an effort to try to look at all of the key elements so we can come to conclusions. We want to look at it in different contexts because the costs and the other elements can be different in city centre contexts, where there is more apartment-type development as opposed to more traditional housing duplex-type arrangements in suburban areas. It will look at those two different contexts as well. The second piece of work is being led by the Housing Agency, which is looking at the Irish cost position versus the position in some other countries, so we have some sort of international benchmark with which to compare.

The intention is that both pieces of work will be concluded by the end of quarter 2. Our intention after that is to take the lessons and issues coming out of that work and to move them into the policy consideration space very quickly so we can come to conclusions. It is important to say we are not starting from point zero. Some of the initiatives that have been taken, including the local infrastructure housing activation fund, LIHAF, scheme, are designed to take out some of the cost elements that would otherwise arise and have to be ultimately factored in to house prices - for example, the apartment guidelines that have been introduced will certainly have a positive impact on cost without impacting on quality. There is a lot of work in train that will have an impact but, as I said, the purpose is to look at this in as rounded a way as we possibly can in quarter 2 and we will certainly be aiming to act very quickly on whatever emerges from those two related pieces of work.

With regard to the house completion figures, as we said in our monthly reports, which put out a range of housing-related statistics, house completion statistics for the past 40 years or more have been based on ESB connections. While that is a long-standing proxy we have used, it is not the only indicator of activity we rely on. The building control management system, BCMS, is now very helpful in terms of giving us commencement data. It is not so helpful at this stage in terms of giving us completion data by virtue of how notices can be filed and how they can relate to different developments, but we are examining whether we can develop it further in order to provide additional data. As I said, we have used ESB connections as a proxy for completions for 40 years and we have good commencement data coming from the BCMS system. We also have planning permission data compiled by the CSO and, moving one stage further back in the pipeline, there is the whole land issue, on which we have some data. We have not presented that data well at times, so over the next three months we will be going through three or four layers of mapped data that will help to put a better sense on the process, and this will be publicly available on a web browser. Therefore, we have a range of indicators.

There has been a lot of talk around completions, including some units that might have started perhaps five ago but have been stalled because of the economic situation. We have been publishing data on that as well. We have done an annual survey every year for the last six years on unfinished housing developments to track how such unfinished housing developments have been progressively becoming more completed. Similarly, that sort of data will be reflected in the completions. When we started putting out the new monthly reports, one of the critical points we included was that we wanted to hear from people who have views in regard to our statistics, for example, if they have issues or if they think there is a way in which we could present the statistics better. We certainly want to hear from people and we have had engagement with a range of parties, including some of the commentators who have been critical in regard to the statistics. That is a process we are committed to continuing because, at the end of the day, data and information are crucial for getting us to where we want to be in terms of ensuring we have the right policies and are drawing the right conclusions.

I will ask Mr. David Walsh to come in shortly to address some of the questions on LIHAF and the fast-track planning process. Deputy Ellis raised issues in regard to CPOs. The use of CPOs varies between different local authorities. For example, Louth County Council has used CPOs quite effectively in compulsorily acquiring not quite, but maybe not far off, derelict properties that are the precursor to our buy-and-renew scheme. Very often, the CPO process can be effective from a legal point of view in regularising messy issues around title. In terms of housing acquisitions, to the extent we have had them and to the extent they are programmed into activity over the next while, I am not hearing from local authorities that they need to resort to CPOs to underpin that level of acquisition activity. In the same way we have given funding to Louth County Council for acquisitions it has made through CPOs, we are not hugely hung up on whether a local authority uses a CPO or just enters into a normal transaction. If it is an acquisition and it makes sense, we will provide the funding for it.

In terms of public-private partnerships, some 1,500 units will be delivered by 2021 under the public-private partnership programme. In order to be able to progress it in chunks, we have split that 1,500 into three different bundles. The Deputy will be familiar with bundle 1, which Dublin City Council is leading on behalf of the relevant local authorities, and for which the National Development Finance Agency is the financial adviser and will be the procuring authority. That is the most advanced bundle and the intention is that the procurement process will kick off in quarter 2 this year - my colleague might correct me if I am wrong on that. Bundle 2 is a little further behind and we are working on identifying the sites for bundle 3, which will move on after that.

It is a different PPP approach to the type of PPP approach that would have been used and that perhaps fell apart back in 2008-09, when the economy went downhill. It is designed as an off-balance sheet approach which provides us with the capacity to move beyond the constraints of the Government's balance sheet, so we can actually deliver more social housing units than would otherwise be the case. That is the prime intention behind it.

Senator Murnane O'Connor and the Chairman raised the issue of land and, in particular, the de-zoning of land.

One of the data sets that I mentioned, which we will be putting out on our map system over the next three months, is what we call the outcome of the land availability survey. That will show how much area is zoned residential and what is the housing capacity attaching to that across the country. When the economy went downhill, there was gross over-zoning and what was coming down the tracks potentially was a certain amount of leapfrogging, as the Senator described it. The urban form might get to a particular point, followed by a sudden gap and with housing development taking place further out with all of the infrastructural cost associated with it, not to mention the less than perfect planning.

There was an engagement with local authorities on the need to reduce the amount of zoned land and to strike the right balance between trying to ensure there is enough zoned land and that there can be a competitive land environment without being in an over-zoning space. I do not have the data in front of me but my recollection is that nationally, the residential land availability survey is telling us that there is enough zoned land for about 440,000 or 450,000 units which, if the housing supply that we want to get to is about 25,000 units per annum, is approximately 20 years' worth of supply. This will all be mapped and be highly visible. There is currently more than enough land zoned to meet short and medium-term housing needs. I might ask my colleague Mr. Walsh to come in on some of the more on both fast-track planning and on the local infrastructure housing activation fund, LIHAF.

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