Mr. Conor O'Connell:

Lands zoned for housing purposes are based on population projections from 2011 to 2016, one of the lowest population growth periods in recent Irish history. The headroom allowance has been narrowed to 25% when it should be 100%. Household formation size is not reflective of European norms of 2.3 persons per household and is currently at 2.7 persons in Ireland. There is an unrealistic target of 50% of the residential provision on brownfield lands or existing built environments in our main urban centres. Site viability and ownership can be key issues and State support will be needed for apartment construction. There is an unrealistically low projected growth target for Dublin and the mid-east in particular, and an unrealistic timeframe for development plans of six years.

Unfortunately, local and county development plans have now adopted and built in these unrealistic aspirations towards land management and there are many examples of settlement caps or even the de-zoning of residential lands previously zoned for housing purposes. In many locations, lands have been zoned for housing which are difficult and expensive to service and, in other locations, serviced or easily serviced lands have been de-zoned or not zoned. Our land management process for housing delivery is, therefore, fundamentally flawed and almost applies a “just in time” process for delivery rather than a predictive model based on realistic timeframes for the delivery of infrastructure to facilitate housing.

It is for this reason that house builders warmly welcome the review of the national planning framework and the change from a six-year to a ten-year timeframe for development plans in the planning and development Bill. We must stress that the business model for builders is based on delivering housing by the most efficient and sustainable means possible. Land is simply a builder’s raw material but one of the most important. Given the timeframes for the delivery of infrastructure and planning on lands, it is simply not possible for a country to adopt a model of “just in time” delivery for the zoning and servicing of residential lands. It must be a predictive and flexible model, based on future needs, which recognises the timeframes involved in the planning and construction of enabling infrastructure.

Of course, we cannot discuss the provision of public infrastructure without discussing the cost of infrastructure and who pays for infrastructure. In Ireland, we do not have, for example, water charges or a significant local property tax whereby the whole of society pays for public infrastructure that benefits everyone. All too often, a significant part of the cost, if not the total cost, of providing public infrastructure rests with first-time buyers and those purchasing new homes. Our water connection charges and upgrades to water services networks, wastewater and electricity infrastructure are borne by those who can least afford it, new home buyers. It is not equitable that first-time buyers or other purchasers of new homes may have to shoulder a considerable amount of the cost of public infrastructure.

A classic example is the section 49 levies that are paid for the purchase of new homes along the Luas line. When a new home is purchased in certain locations, a levy is attached to the cost of providing a new home yet someone selling a second-hand home nearby who benefits from the Luas pays little or nothing in public development levies while benefiting significantly in the sales price of the second-hand home. A vast array of public infrastructure is paid for in this way. Another recent example is the decision by the Commission for Regulation of Utilities, CRU, that the cost of upgrades in a first mover disadvantage situation must be paid for by the first houses in a large residential tract of land.

In relation to the provision of infrastructure generally, our members report that the timeframes for connection decisions are too lengthy and cumbersome, the cost can be prohibitive to the orderly development of a site and, for many infrastructural projects, there is no ability for the house builder to build and provide the infrastructure themselves in a more cost-effective way due to regulatory or procedural issues. We must find a better way of paying for the timely construction of public infrastructure and it must be based on a predictive and flexible model planned well in advance, rather than the current demand-led approach.

If we plan for ten years, then we must provide the infrastructure for that period as well, and the infrastructure plans must marry with the development plans.

As of now, development levies account for a significant portion of the uplift percentage of land zoned for housing purposes and the State already captures a significant gain from zoning decisions. Levies and charges for public infrastructure upgrades cannot be borne by new homebuyers alone.