Mr. Mel Reynolds:

To drill down into that and put a number on it, in Dublin city centre, which is an area where Dublin City Council is very active, the local authority did its vacant site study in 2015 and knows where all the vacant sites are. There are 298 ha of zoned residential land. The value per hectare is approximately €10 million. That is €3 billion worth of land currently in Dublin city only. If Deputy Wallace's proposal is correct and it brings more land into this, for example, if half of that land was brought under the levy and the levy was raised to 20%, that would be €300 million a year in Dublin City Council alone which could be ring-fenced for affordable housing. On the flip side, the value of loans attached to the State's landbank in local authorities to which Professor Michelle Norris referred are approximately €450 million and the counter-cyclical potential for this measure to deliver affordable housing is very strong. The most compelling aspect about this for me is that this is not merely about beating somebody with a stick. It is about the State pulling back and stating that the market has gone bananas and we should harvest some of it. The State has no capital gains. It has no way to increase revenue. This is a quick and easy way to harvest some of the gain. In some locations in Dublin, site prices have gone up fivefold.

Landowners will not like it. Those involved in land speculation will not like it. As Deputy Wallace stated, developers and builders have nothing to fear here because if they intend on building, this will have a mitigating effect on price rises. If any changes to the vacant site levy are introduced in a consistent and clear way and are telegraphed in advance, the market will not mind that because it will be reflected in land values. Ultimately, what we want is to see the land market calming down.

One could find that the entire loans associated with local authority housing could be extinguished in the first year of operation of this enhanced levy. That would allow local authorities with landbanks and no loans attached to them to pass on those sites to ordinary buyers at the discounts that we are seeing Ó Cualann provide. One of the challenges in the affordable housing model is who pays for the site. If the purchaser pays for the site, it is not affordable and a local authority is left with a hole on its balance sheet, but if the local authority was able to ring-fence the levy for that purpose and pay off the loans, this is a compelling countercyclical measure that would in some way start to unpick what we see going on in the wider housing sector, which was mentioned earlier.