Mick Wallace (Wexford, Independent) | Oireachtas source

When I received planning permission, I would not have had the working drawings made because I was afraid I would not receive planning permission because changes would have had to be made. Collaboration in advance of seeking planning permission would be a good way of avoiding this issue, but it is not perfect. With my builder’s hat on, insisting on all of the working drawings being made in advance would place a serious expense on the builder or developer.

Deputy Casey asked if a period of 12 months was enough after a developer received planning permission. In my experience, it was always enough. I was able to have the working drawings made in a maximum period of about three months. After receiving planning permission, I never sat on a site for more than 12 months because I was not a landbanker. I had to buy land from landbankers and paid a lot of money for it. Accordingly, I had a big incentive to build as quick as possible. For example, I bought a site of one fifth of an acre on Dominick Street for €4.8 million. By the time I had designed the site, obtained planning permission and started construction, two years had elapsed. The interest rate was 6.5% which resulted in a total site purchase cost of €6 million. It cost me the same amount to build on the site. I was paying so much money to the banks from the day I had bought the site that I could not get onto it quickly enough to have the work finished quickly enough to stop paying so much money in interest. When I was about three quarters of the way through the work, I was paying €80,000 a month in interest. It is nuts, but there is an incentive to start work. I am confident that developers who genuinely want to build will get onto a site within 12 months. However, if a developer has problems, for example, with working drawings, and cannot get onto a site for 18 months, there will be an appeals mechanism. If the problems are genuine, the developer will be listened to and treated fairly.

On the 36-month provision, it is unusual for it to happen with a development. Building 20 or 100 units can take almost the same length of time. Rather than provide that a development must be completed within 36 months, it should be substantially completed within that period. Again, there will be an appeals mechanism. It will be obvious if a developer is trying to finish the development. If anyone completes half of the work, I can guarantee that he or she will keep going because of the price of money. One would be mad to stop because it would just be too expensive to do so.

On selling a site to the State at 40% or 60% of its market price, we have tied down the definition more finely. For example, Mr. Jones has a site with planning permission to build 100 houses, but he does not feel like building them just yet because he knows that prices are going up, meaning he will make more money if he holds off. We propose imposing a 25% levy on Mr. Jones which will be a serious disincentive to hold onto a site. What if he has difficulties in selling the site on the private market? What if he is in trouble because he owes a lot of money on it and will now have to pay a 25% levy every year? That will put him to the pin of his collar.

What we are doing is like a sop to developers or landholders. We are giving them an out or an opportunity, if it suits them and if it suits the local authority, to sell for 60% of an agreed market value in year one. If they do not take it up and pay the tax in the first year, we are giving them a chance in the second year to sell it at 40% of the agreed value. Obviously, it is far more attractive for them not to pay the 25% in the first year and sell it to the local authority at 60%. Really, this is an opportunity for them to get out without being skint. It gives them an out if they have problems selling the land or cannot get the funding to build it out. Some people cannot get funding to build out projects.

As Mr. Oonan pointed out to me this morning, Dublin City Council has just prepared a report in its problems with the vacant site levy. The report points out that 162 sites were found that could have qualified except that they were smaller than the size stipulated in the legislation. I know that Senator Grace O'Sullivan tried to bring that down when the legislation was being debated. It was originally set at 0.1 ha but I successfully tabled an amendment to change it to 0.05 ha. The council has pointed out that there were 162 sites which were just under 0.05 ha, which is actually 500 sq. feet. There is an argument for bringing it down further to 0.03 ha because one could fit 12 or 13 apartments on sites that are just below 0.05 ha. Obviously, one cannot build on the entire space because that will pose public space challenges and one must adhere to the rules in that regard. However, there is an argument for reducing the site size further. Many of those smaller sites are not owned by big players who do not bother with small sites. The smaller sites are generally owned by smaller entities and they may struggle to get the funding to build on their sites. At the moment it is difficult to get funding to build out sites.