Oireachtas Joint and Select Committees
Wednesday, 12 October 2016
Joint Oireachtas Committee on Housing, Planning, Community and Local Government
General Scheme of Housing (Miscellaneous Provisions) Bill 2016: Discussion
I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
The opening statements submitted to the committee will be published on the committee website after this meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. At the request of broadcasting and recording services, witnesses and those in the Public Gallery are asked to ensure their mobile phones are switched off completely or switched to airplane safe or flight mode, depending on the device, for the duration of the meeting.
On behalf of the committee, I welcome Mr. David Walsh, Mr. Niall Cussen, Mr. Terry Sheridan and Mr. Earnán Ó Cléirigh from the Department of Housing, Planning, Community and Local Government; Mr. Brendan Allen, Mr. Brian Keaney, Mr. Seán O'Leary and Mr. John Spain from the Irish Planning Institute; and Dr. Aideen Hayden and Mr. Diarmaid O'Sullivan from Threshold. The committee has decided that it will take the first part of the Bill with the Irish Planning Institute and the Department of Housing, Planning, Community and Local Government up to 11 a.m. and then proceed to the rental section of that Bill until 11.45 a.m. Is it agreed that we will take the statements as read and allow witnesses from the Department to say a few opening words? Agreed.
Mr. David Walsh:
I thank Chairman for the opportunity to elaborate on some elements of the Bill as currently drafted. In order to deal with this element in respect of fast-track planning and other elements, we thought it might be helpful to provide some evidence and a walk through of the timelines and process relating to what is proposed in the general scheme of the Bill. We have circulated a short presentation to members. Mr. Cussen will go through the issues. The experts are here with me, so there is no point in me hogging the limelight.
Mr. Niall Cussen:
The presentation submitted to the committee gives it some background in respect of the fast-track aspect of the legislation. All of this flows from pillar 3 of the action plan for housing and homelessness which correctly identifies land supply, land management and the availability of ready to go sites with planning permission as very important parts of ensuring there is a well-functioning development sector and market for land, which obviously feeds back into affordability and supply. Banks and financial institutions tend not to lend to persons intending to develop land without live planning permission with some time to go. The only lenders to purchasers seeking to purchase land to seek permission to build on are private equity, high interest lenders or people with a lot of cash to deploy. If one looks at the property press and sources of information about development sites that are trading and so on, one can see that there is quite a shortage of ready to go sites that have been through the planning process and have recent permission with several years to run. This is a very strong message coming from the sector. The information available to us is that the length and risk involved with the planning application process are becoming major deterrents to lenders. It is the scarcity of ready to go sites with permission rather than the raw amount of zoned land that is an important issue in terms of ensuring the affordable supply of land, etc. There has been much comment about the duration or efficacy of the planning process at the moment, which very much comes from the legislation and what is theoretically possible.
As we review planning applications that are being handled by local authorities, principally in Dublin and other major urban areas, we are looking at how this pans out on the ground. The second slide summarises the typical process duration for large applications. In respect of the pre-application consultation process, it can take up to six weeks to get an appointment. There may be several meetings involved and someone could arguably be looking at two or three months going through that phase before they get into a position to have enough information to hand to finalise and submit their planning application. As many commentators have said, local authorities can determine a planning application within eight weeks but we would see that most planning applications for large housing applications are subject not only to additional information requests but clarification of additional information requests. This tends to drag out the process to six months or more. This begs the question as to how efficiently the pre-application consultation process is working in the first place if all of these issues have not been ironed out at that stage.
As our opening statement concludes, the vast majority of large housing applications are appealed to An Bord Pleanála so that is another four to five months. To give members a better flavour of what is happening on the ground, we asked our colleagues in An Bord Pleanála to look at a batch of large applications - 100 plus applications - that were considered and decided by Bord Pleanála in 2016. We could have gone back a bit further but there have been very few applications of that scale because of the economic crash in previous years. There were about 18 cases we were able to look at in 2016. It is quite a complex process because one is literally opening up files and trying to go through the chronology of all the steps that led to a file. This is an initial and ongoing analysis so we may need to come back and vary some of this. What jumps out at us is that the average period taken to get permission, taking into account the planning authority and An Bord Pleanála phases, is about a year. The best case scenario would be a bit better than that at 26 weeks for the planning authority and 18 weeks for An Bord Pleanála. It is important to stress that An Bord Pleanála achieves pretty much all its statutory objective period, SOP, objectives in terms of housing applications. It prioritises planning appeals for large housing applications. The longest case, to which I will return, took 82 weeks, or 18 months, to get through the process. What is also striking is that most local authority decisions on large housing applications are invariably upheld. Some are varied. What is also striking in terms of the analysis is that An Bord Pleanála tends to dramatically reduce the number of conditions attaching so that comments on whether or not local authorities are getting into excessive detail on the matters they regulate by way of condition.
Our view would be that the current two stage process is taking 12 to 18 months or longer in some cases.
We believe the current two-stage process is taking 12 to 18 months or, in some cases, longer. This brings limited added value because effectively applicants get the same decision at the end of the process. This really starts to hit home when we look at the financial implications. Let us assume a site cost of €40,000 per home, which is an average site cost - obviously, some will be lower and some considerably higher. Anyway, purchasing a site for 200 homes on that basis would cost approximately €8 million. The holding cost of that if we work on an assumption of 10% interest and so on is, approximately, €4,000 per home per year. It is the home purchaser or renter who picks up the holding cost at the end of the day, because that is the way of it in the context of a viable development. This really has and can have a significant impact on affordability.
We picked out two case studies. They are represented by the first of the bar charts on display. The bar chart is self-explanatory. It has a development of 284 units and a development of 410 units. What is striking about these two schemes is that they are effectively NAMA-backed projects. They are well funded and have well-organised design teams and so on. The committee will see that the 284 unit development spent approximately 14 weeks in the pre-application stage. Then it was in the local authority for 50 weeks. Then, the An Bord Pleanála process dealt with it in 18 weeks. In the case of the other development the period was 53 weeks. These may be at the outer end, but these are exactly the scale of projects that we need to deal with the housing crisis, but they are taking in effect 18 months or more to get through the process.
The next bar chart compares averages that we might look at in the context of the batch of 18 or so cases. We have more work to do to finesse this, but upon initial analysis we can see that the comparison between this process and the fast-track process is stark, with a difference between 18 months on the one hand and a guaranteed process of determination within 25 weeks on the other hand, albeit in a straight "Yes" or "No" situation. This highlights the importance of the pre-application process, getting it right, getting everyone around the table, understanding the issues and positioning in order that a final decision can be made.
The map on the next slide shows the general shape of and how large cases before the board have been dealt with over the past decade. We are grateful to our colleagues in the board for providing us with this information. Again, it has a metropolitan focus. This is really an issue for Dublin, Cork and other large urban centres such as Galway. To some extent it applies to the Dublin commuter belt as well.
I will hand over to my colleague, Mr. Sheridan. There are two slides that go through the main processes of the An Bord Pleanála direct process.
Mr. Terry Sheridan:
The slide on the display screen adverts to a pre-application process with a nine-week timeframe for the initial pre-application consultation between the board, the local authority and the developer. There is a one-and-a-half to two week period for validation of the application. Then there is a four-week period for the planning authority to submit a report on the pre-application. Following that, An Bord Pleanála will organise a meeting between the relevant parties. Furthermore, during that timeframe the inspector will initiate preparation of his pre-application report. Then, finally, it is for the board to outline and make its decision on whether the application is sufficiently comprehensive to proceed. A mandatory maximum nine-week period applies under this process. Normally, the timeframes provided for in the planning Acts are statutory objective periods, SOPs, which can go beyond the periods set out in the legislation. However, in this case there is a mandatory guaranteed nine-week timeframe.
There is a 16-week period for the application phase. In this phase, the normal public consultation overseen by local authorities takes place in planning applications. There is a five-week period for the public, elected members, interested parties and prescribed bodies to make their submissions to the board. The planning authority then has an additional three weeks to submit its report to the board on the proposed development. That will take account of the public submissions received during the public consultation phase. Then, we move on to the inspector's report after receipt of the local authority report on the proposed development. Finally, the board has a couple of weeks to make its final decision. In this case, we are talking about a maximum of 16 weeks for the board to make a decision on an application. It is important to point out that an application will not get through to the board unless everything is ironed out at pre-application stage. A number of requirements apply. For example, the site must be serviced by the necessary infrastructure, with roads, water, etc. All the documentation, including layout plans, house types, density and all of required information to make a decision on a planning application has been provided. Only at that stage, when an application gets the green light after the pre-application consultation stage, can the planning application be submitted to the board. Effectively, as Mr. Cussen has pointed out, we are talking about cutting down and condensing the decision-making process for large-scale housing developments from 70 or 80 weeks plus to a maximum of 25 weeks. This will shorten the decision timeframe substantially.
Mr. David Walsh:
I wish to flag that what is proposed in the legislation with regard to planning and other issues is simply the first tranche. It is only part of what we envisage as a wider suite of planning reforms in respect of exempted regulations, new ways to bring units back in and the broader suite. There is very much a targeted aspect to this but it needs to be read in the broader context of the action plan.
Mr. Brendan Allen:
I thank the committee for the invitation. The team has been introduced already. The Irish Planning Institute represents approximately 700 professional planners across the public, private, semi-state and academic sectors. At the outset I am keen to say that we recognise the current housing situation. The institute assists in delivering the housing units required to try to resolve the situation. However, we have queries on a number of aspects of the proposed legislation.
In Dublin there is potential to deliver approximately 46,000 homes on lands zoned where essential services already exist. Approximately nine in ten applications were granted by local authorities last year. Two thirds of these were decided within eight weeks. That is based on our basic research.
The An Bord Pleanála 2015 report notes that all appeals involving larger multi-unit housing developments have been decided within the statutory compliance time limit of 18 weeks. We question how it can be said that the planning system is targeted or frequently cited as the main constraint on supply. Permission is not always the issue. It is a question of activating the permission. Once an applicant gets permission, how does the applicant build out the plans in terms of dealing with compliance submissions and having houses in place? It is all very well getting planning permission, but delivery is really the issue.
A threshold of 100 homes is referred to in the legislation. We have a query in this regard. The current system allows for third-party planning appeals.
Given that the centralisation of the planning system in terms of taking more applications directly into An Bord Pleanála is not set out in any Government policy, we are unclear as to where it sits. Will there be more applications or strategic infrastructure development, SID, type legislation be introduced to deal with other aspects of planning?
The IPI believes spatial planning is a fundamental local government function which should be primarily delivered at local level with reference to the principle of subsidiarity. Again, we made the point a number of years ago regarding the Department in its recent statement of strategy consultation. Other than anecdotal evidence that the housing action plan has not identified any systematic difficulties associated with the development management system which might form a basis for requiring all applications for 100-plus residential units being made directly to An Bord Pleanála, we need information that can be given, including details of the evidence basis for choosing the threshold of 100 units. Has research demonstrated this is a particular threshold at which applications are consistently coming into the planning system, or is it less or more? We also need information on the evidence basis for the cumulative floor space threshold of other uses in mixed-use schemes and clarity on how it is proposed to deal with, for example, student accommodation.
There is a presumption against further information requests in the proposed legislation and oral hearings. An analysis of the issues that necessitate further information requests and oral hearings would be welcomed. The housing action plan has set a timeline for a root-and-branch review of the planning system to be undertaken by the first quarter of 2017. We are unclear as to the format this might take and whether it can be accomplished in the timeframe. It was referred to in the previous presentation.
We represent planning practitioners at a variety of levels and our members have reviewed the proposed legislation. There are several issues regarding its practical implementation. It is vital that we encourage rather than reduce public involvement at all stages of the planning process. This would be a key role of the office of the planning regulator and is also one the IPI has advocated for many years. The proposed legislation further removes communities from their local authorities and the development plan and decision-making process. The recent review of An Bord Pleanála outlined difficulties with the strategic infrastructure process, which can lead to significant delays in decision making. Having regard to the lack of appeal of such decisions, there is an increased risk of legal challenges. There appears to be a large number of judicial reviews taken on current SID applications. This must be considered in the timeframe of delivering developments and planning permissions.
Without clear anti-avoidance measures, the legislation would not be effective. It is not clear how phased sub-threshold applications would be dealt with. The legislation is not accompanied by commitment for extra resources for An Bord Pleanála to deliver the requirements. The institute suggests strong consideration should be given to ensuring planning authorities are properly resourced in the first place to deal with the issues discussed previously regarding lengthy pre-application planning consultations and how they can be made better and more effective before removing them from the local authorities and diverting them to be dealt with by a different body, which presumably would then require additional resourcing.
The legislation allows for compliance matters with conditions to be dealt with by planning authorities but is silent on the timeframes associated with compliance. The agreement of compliance issues before commencement of development can be a very major issue for the delivery of developments that have planning permissions. The proposed structures could result in increased costs for applicants for housing developments. The cost of third-party submissions to the process is unclear. It is unclear whether it will remain the same as the €20 fee people currently pay or will be the €50 people pay for SID applications. While the Bill names Irish Water, Transport Infrastructure Ireland, TII, and the National Transport Authority as consultees, it is unclear why these bodies are listed. Other prescribed bodies that typically are consulted on applications such as the National Parks and Wildlife Service, the development applications unit and various others are not listed.
More easily, rapid response teams project managed by a professional planner or appropriate individual in a local authority who has responsibility for co-ordinating housing applications within that planning authority from the pre-planning phase through to the compliance stage could be put in place in local authorities. Greater co-ordination between bodies such as TII and local authorities, funding for essential infrastructure, addressing land costs and improved compulsory purchase order, CPO, powers to assemble sites are all factors that could play a part in increasing housing output. Addressing deficiencies in the existing planning code which have been identified as impeding the efficient delivery of housing should be prioritised. For example, statutory timeframes around compliance submissions would be welcomed. The consolidation of planning legislation is difficult for planning practitioners, never mind the public, to understand at times. The onus is on applicants to engage appropriate teams of professionals in order to assemble applications. We encourage the committee to support the institute's call for the regulation of the title "planner" to ensure qualified and trained individuals would offer and lead such planning teams. It could be done by placing a definition of "planner" in the legislation and detailing the role of professional planners.
The IPI wishes to work constructively with the Department. Given the experience of our practitioners in the public and private sector, in the event that the legislation is passed we would like to work through the specifics of the Bill so we do not find ourselves in 12 months' time with a miscellaneous Bill to tidy up glitches we anticipate could happen with the legislation. We are very open to working with the Department through a working group for something like this to occur. I thank committee members for this opportunity.
I thank the representatives of the Department and the IPI for their attendance. I had considered the IPI's correspondence and report to us in advance and am highly impressed with it. It is very important to ask what are the real issues. The report of the housing supply co-ordination task force for Dublin stated there was the potential for 46,000 homes on land zoned, with essential services including roads and supply already in place. More than 33,000 units have permission and 7,000 are in the planning process. The planning system therefore cannot be solely blamed for the shortage of residential properties. These are facts from a report which I received from the Department. I did not make them up.
This week, I wrote to the Minister about a mapping exercise in a small part of south County Dublin, namely, Kiltiernan-Glenamuck. I was supplied with a map identifying the permissions and grants for 2,434 housing units. Some of them have subsequently withered. It is a section 49 catchment area and there are three levies, namely, the B1 Luas levy, the standard section 48 levy and the section 49 levy. The planning levy for a one-bedroom unit is €70,000. I had this confirmed this morning. To produce a five-bedroom unit in the same area the levy is the same: €70,000. Where is the logic? This levy scheme has been in place for eight years. A local authority has not carried out a review of the section 48 levy.
That is an impediment to development and bringing houses on-stream on land that is zoned residential. I dropped that letter into the Minister and I asked him to raise it with the chief executive. I also attached the maps, the folio numbers, the planning reference and everything else. They are facts that need to be investigated by someone in the Department.
I want to touch on a few areas. In 1999, special provision was inserted in Article 28A of the Constitution about democracy and engagement with local authorities. For the first time ever in our Constitution, we provided special status for communication with regard to local councils. In terms of my concern, it is about this appeals process. We operate a very successful third party appeals process. This is a democracy. Yes, there is a crisis. Everyone in this room wants more houses to be built, and we want them delivered quickly and on track. There is no dispute about that, but we cannot compromise the engagement of local elected members who are elected to represented people in communities to articulate their concerns about a whole range of matters. This is one of them. Have the witnesses touched on, or got any legal advice on, that? Do they consider that their proposals water down that in way? I consider that to be the case. I would like to hear what they have to say about that.
With regard to the appeals process, what exactly is the fee? There will be no appeals process, so we are telling citizens they will not be able to appeal. The witnesses should tell that to the county councillors when people come in to complain about a development with which they are unhappy. They say that the parties in Leinster House voted it out and there is no appeals process. That is most unsatisfactory. The question of the fees needs to be addressed.
What resources is the Department giving to An Bord Pleanála for this new imaginative scheme? Have the witnesses considered seconding planners to or taking planners from local authorities into the board or giving them specific roles within the board for a two or three year period? That is the sunset clause they spoke about. What engagement is going on with planners? What do the 31 local authorities think of the watering down of their functions? They are demoralised. I have spoken to a number of planners in local authorities in the past few weeks. That is an important point.
What about resourcing local authorities? They have local knowledge and local expertise, and they develop relationships on a range of issues. That is important.
On the strategic infrastructure development, SID, we know there are projects going on but on one major project in Dún Laoghaire, An Bord Pleanála missed its 18 week schedules on three occasions. It does not seem to have any idea of it. When I rang An Bord Pleanála recently, I was told me it had not even completed its report of an oral hearing that took place last October. It is now October 2016. A month ago the inspector had not been in a position to finalise her report for the board, so there are weaknesses in that process.
I am definitely against this proposal. There has been correspondence from the Minister today on the fast-tracking or waiving the pre-scrutiny legislation. I am against waiving anything if it waters down the participation of the citizens of this country in the planning process. I am all on for fast-tracking projects. I am all on for the plan and for delivering the houses, but I am against any undermining of planners and the citizens in the process. The witnesses are weak on that.
I will make two points to Mr. Walsh. He stated that this was a suite of measures. The Irish Planning Institute witnesses talked about the need for the consolidation of the planning Acts. Mr. Walsh might outline his plans for that. There is real role for the planning regulator, and I would like to hear Mr. Walsh's plans for that.
I thank the witnesses for the presentations. Part of the purpose of today's meeting is because the proposed planning changes represent a profound change to the planning system, particularly for the large developments, so we are looking for as much information as possible before many of us make decisions. While I am intuitively not in favour of the particular proposal, I am open to persuasion, depending on the evidence presented to us. My questions are on that basis.
I have some questions on the PowerPoint presentation and the legislation, and then questions for the Irish Planning Institute witnesses, which I will go through one by one.
The third bullet point on page 1 of the presentation is about a fundamental shortage of ready to go sites. How many ready to go sites with planning permission are there across the State? What number of units does that represent? We would like to know that figure. The first bullet point on page 2 indicates that it takes up to six weeks to get an appointment. Is that an average figure? Is that due to staffing or other reasons? The second bullet point on planning applications is about requests for further information. From my experience in South Dublin County Council, one of the biggest delays in the county council end of a planning application was that process of requesting further information. That is an important process because it is the point at which the planning authority gets to assess compatibility with the development plan, local area plans, etc. Has the Department taken a view on the reason that exchange of information can take so long? Is it poor quality planning applications or that local authorities are being awkward? There must be some reason for that.
I am also unsure as to the logic of the second sub-point under that bullet point, which states that because these mechanisms for further information are available and there is a likelihood of the planning authority requesting them, applicants are encouraged to send in applications in the knowledge that they will be asked to provide further information. I would have thought that everything the Department is saying in this presentation is the very opposite of that because there is a financial cost to delaying it. There will be huge pressure from the developer, the architects and the consultants to make sure the planning application is done to the very best of their ability to ensure there are not further requests for information. I would like to know the basis on which the witnesses are making that statement.
With regard to the initial analysis of the 2016 decided cases, how many cases does that involve and over what period of time? I am confused because we were told in one of the first notes on the general scheme that we were looking at an 18 to 24 months process but the witnesses have told us that the average is a one year process, which is shorter than that. The problem with averages is that they do not necessarily tell us what happens in the majority of cases because a very small number of very big outliers, either short or long, can stretch out the average. Will the witnesses give us the full data on which this PowerPoint is based so that we can drill underneath the figures, so to speak, and make an assessment? Of the total number of cases, how many of those are happening within the 12 month period? Of the cases that are taking between 12 and 18 months, what percentage of the cases the witnesses studied does that affect?
The second last bullet point on that page indicates a potential cost of €4,000 per home, and approximately a 10% interest. Perhaps I do not understand this but I would have presumed that is a 10% interest charge on the loan yet at the start of the presentation the witnesses told us that part of the difficulty for these developers, and one of the reasons they are proposing these changes, is that they cannot get the loans. If they do not have the loans, am I right in thinking there is no interest charge? If I have it wrong, the witnesses might clarify that for me.
I have a couple of additional questions on the legislation. If this proposal goes through, where does enforcement lie? Will enforcement lie with the local authority in the relevant area or will it be similar to strategic infrastructure projects like roads, for example, where there is no statutory enforcement body? Which of those two will be the outcome of this process?
I have a concern about the ability of An Bord Pleanála to make the very detailed assessments of the planning applications. We have 30 or 40 local authorities with different development plans, local area plans, etc., and there is a lot of specialised expertise in the relevant planning authorities. An Bord Pleanála could not be expected to have that same level of information so by removing the local authority from that detailed assessment, are the witnesses confident that the staff, and I am not casting aspersions on the quality of the staff in An Bord Pleanála as their function is different, have the level of expertise in terms of all those development plans and local area plans to make those same assessments that happen in that first phase? I would be concerned about that.
With regard to the pre-application process, which is a really good idea, why was that not considered as a statutory requirement with the local authorities, with statutory timeframes for that? Was that considered and, if so, why was it rejected?
I echo Senator Boyhan's point about third party and community consultation appeals and oral hearings. There is a real concern in that it is already very difficult for third parties to have any meaningful impact on the planning process because it requires such a specialised level of technical expertise. Local councillors and community organisations could make submissions. They are usually subjective opinions and not reasoned, planning based opinions. Are the witnesses satisfied that reducing the ability of third parties to engage, appeal and have oral hearings will not reduce the quality of the final planning decisions?
The heads of the Bill contain a large section on environmental impact assessments and nobody has mentioned them. It is one of the bits of the legislation that concerns me most, particularly with large applications. I would like to hear more about the rationale for trying to reduce the reliance or need for an environmental impact assessment. That is what the legislation seems to suggest. What is the rationale behind the suggestion?
A section of the Bill mentions additional powers for the Minister. I always get nervous when I hear the phrase "additional powers of the Minister", particularly when he or she gets to award himself or herself additional powers. I would like to know more about the provision, what is envisaged and what checks and balances are in place. A small section of the legislation deals with Part V provision. My reading of it is the provision does not affect Part V obligations in those developments but I would like that to be confirmed.
In terms of the legislation, nobody has talked about Part VIII. Can the witnesses confirm if my reading of the head is correct? There will be the regular eight-week consultation and then the local authority must take a decision within six weeks. That means the process will take 14 weeks. If that is the case then it is a good thing.
Yes, that is clear.
I have a question for the Irish Planning Institute. In bullet point 1.6 recent IPI research was mentioned. Can the institute make that research available to the committee as it would help us with our deliberations? At the end of the page, under bullet point 1.9, mention is made that a small but significant number of large multi-unit housing developments were under appeal. How many housing developments are under appeal? Can we have more information on the matter?
Finally, I am interested in hearing the witnesses' comments on the environmental impact assessment part of the heads of the Bill and on the impact of the potential reduction in third-party involvement in the planning process, appeals and oral hearings.
I thank the Department and the institute for their presentations. I would like to tease out a number of the heads of the Bill that have been presented to us, specifically head number 5. I question what has been presented in terms of the 25-week process. Head 5(2) reads, "Notwithstanding the provisions of this section, the prospective applicant shall, in advance of entering into consultations under subsection (1), consult with the appropriate planning authority" under section 247 of the Planning and Development Act.
I apologise. No timeframe has been stipulated for the process that has been presented here today. If I have read the Bill correctly, that process must be gone through before entering section 37S. Following on from that, almost every piece of detail that is required to make a decision must be submitted, including the reports from the local authority. It is most disappointing and frustrating that even when one has gone through the nine-week process, one will still not know whether an environmental impact statement is wanted. One must then request further information, as pointed out in head 5(16), to make a determination on whether development of a class as specified in the regulations made under the section will require an EIS, and that means another four weeks. If a Natura 2000 statement is required then it will be another four weeks, as referred to in head 5(16). That means there is an additional eight-week process before one submits the planning application to the board directly. Equally, is there a process where the board can look for further clarificatory information? If that is available, then there will be a further time delay.
I am slightly concerned about the lack of transparency on fees, as they can be a reason to stop a development commencing. There will be problems down the road until we have a transparent fees system. Finally, I ask the institute to give some examples of what is delaying the process in terms of compliance so that we can try to deal with them in this process.
Mr. David Walsh:
I thank the Chairman. A long list of questions have been asked. I might answer some of them myself and I shall pass the remainder to my colleagues, Mr. Terry Sheridan and Mr. Niall Cussen, as needed.
I shall address some of the points raised by the institute in the first instance. A questions was asked about whether there has been a move towards a centralisation policy. The action plan on housing has identified and acknowledged that we have a dysfunctional market, a crisis and a need to accelerate and expand all forms of delivery. It is solely within that context that the legislation has been framed; it is not a lever to start drawing other things inwards. It is very clearly defined within a band of 100-plus housing units and for a time-limited period as well.
The importance of the local function of spatial planning and policy has been acknowledged. That remains the case because under the system, through the development plan, the local area plan and other processes, it is the function of the local authorities to provide that context. Applications submitted under this system will only be considered where the lands have been zoned or had local area planning within that process. We do not assume that lands will jump and shall not pre-empt any decisions that will be taken as to the appropriateness of those locations for housing development as members and others will have signalled.
Some of the other issues raised are more cogent and relevant to the root-and-branch review, which is obviously a policy issue separate from the Bill. I can assure the committee that as part of this broad review of planning, a lot of the issues that have been flagged will be considered. We have not set the broad terms for planning. The action plan states it will be a root-and-branch review of all aspects of planning. I am sure that the Department would be happy to engage with the institute, other public bodies and this committee in terms of trying to elicit many views on what is working and what can be done to further enhance the system. Perhaps a lot of those issues are not relevant to the core of the legislation.
Having the public involved in decision-making was mentioned and it is a view reflected by other members of the committee. As Mr. Sheridan has outlined, there will be a full opportunity, on the same basis as currently available, for third parties or interested parties to submit their views. The fees will be no more. In fact, fees are not covered in the primary Act and are always covered in regulations. The fees in respect of applications, third-party observations and prescribed bodies all will be dealt with in the regulations that will follow and flow from the Act. We can give assurances that the current rates charged for making a submission to a local authority planning application will be exactly the same, if not less than or no more than, what goes to An Bord Pleanála, which is €20 as it stands.
The delays associated with strategic infrastructure and the controversy and issues that may have been generated at local level have been flagged. We are using, in very broad terms, the structure and process associated with strategic infrastructure but very much recognise these applications are not of the same complexity. In all cases they will not involve an environmental impact assessment, EIA, because it would require a much longer period.
In response to the point made by Deputy Casey, as part of the initial pre-consultation process that will be formalised between the board, the local authority and the proposer of the development, the assessment as to whether an EIA is required will be decided then. If an EIA is required the process will take longer because it would involve a full environmental impact statement, EIS, as required. It means that it would be premature to lodge an application with the board until such time as the EIS and the assessment by the board could be delivered.
In terms of issues around resources for the board, of course that is not a matter for the Bill. The Minister has signalled in the past and in our discussions with the board, it already has signalled the requirements in terms of administrative and technical supports, to create a strategic housing unit. The board is engaged with the Department and as we are prepared to fully stock the board with the necessary skills and supports to ensure it can fulfil the mandatory timeline, that should not be an issue. By the time this Bill is enacted the board will have an operating strategic unit set up and will be ready to deal with all applications from day one.
On the question of compliance and enforcement timeframes, the local authorities will be the enforcement authorities. The timelines that apply elsewhere in the Bill will apply to enforcing developments.
On the question of increased costs for developers, that is a substantial issue that will be dealt with as part of a broader issue of costs in the system and the ability of the system to capture the full costs of dealing with applications. In the context of reform around e-planning and the submission of online applications and appeals, we need to reflect on the real costs to the system but it is important that a portion of any fees that will go to An Bord Pleanála in respect of an application under the strategic housing initiative, will be released to the local authorities to cover the costs they would have incurred in engaging with, supporting and assessing the application during both the pre-application and in its formal assessment of any submissions received and in making its report to the board as part of its decision making. If a local authority can demonstrate that it spend X amount of time and resources to deal with that, it should be entitled to a portion of the costs from the fees that a developer would pay.
As Senator Boyhan is not present, I will deal with the points he raised when he returns. On the question of ready to go sites raised by Deputy Ó Broin, I will pass to Mr. Niall Cussen who may have more information, but I can give general information. There were 18 applications in the course of 2016. We have the information on a spread sheet and we are happy to share that with committee members who can look at the timelines and dates. As Mr. Cussen said, we took a snapshot from 2016, reflecting the most recent activity. If members would like further information from previous years, we will look at that, recognising that the figures would be fewer and fewer as one goes back when there was not a significant level of planning activity.
On the issue of requests for further information, Mr. Niall Cussen will be able to address that issue. It is recognised that it arises from a combination and not just from one issue, whether it is developers who might not be providing the right level of information or, it might be, as reflected in our presentation, that local authorities are assigning conditions, where in many cases the conditions might be too detailed or excessive and when appealed to An Bord Pleanála it may have considered and reduced some of those conditions. It is probably a combination of that but Mr. Cussen has some further information on that issue.
On the issue of the 10% loan charge, it is the last 10% to 15% of the funding that tends to be the higher cost. Of those who have been able to secure planning permission on zoned land, they are still paying for that last bit and it is the final amount of a high value and potentially high risk funding that tends be transferred into the costs, but Mr. Cussen might be able to elaborate on some of those issues.
The ability of An Bord Pleanála to make detailed assessment through the pre-application consultation is the reason we have structured the nine week mandatory period, putting the local authorities which has all that information central, both in terms of engaging with An Bord Pleanála and with the developer but also in providing a report to An Bord Pleanála as to whether what is proposed fits with the regional plans, the developments plans and the local area plans and also aligns with the investment programmes in respect of local road and water services. AsDeputy Ó Broin rightly points out that information is crucial to assessing the viability of a project. If An Bord Pleanála or the local authority feel the project is premature in terms of putting it forward, that is a key consideration and will determine in the first instance whether An Bord Pleanála will accept the application or whether it will say that it will not accept the application because the applicant has not met what are seen as minimum criteria. An Bord Pleanála itself will have expertise and can have many of its planners and administrators have worked for the local authority so they understand the process but that is not to dismiss or undermine what will be a key role for the local planning process which has an expertise.
In terms of third party inputs, the issue is two-fold. There will be an opportunity for all interested parties to make their submissions just as they can in relation to any applications, but maybe more crucially, and what has been factored in asMr. Terry Sheridan has outlined, beyond the initial five week period of the 16 weeks, the local authority has three weeks to make its own submission to An Bord Pleanála as to whether a proposal is correct and in that instance the local authority can access and assess, having regard to local comments that have been made, so not only is the local authority making a submission to An Bord Pleanála on its own views but it can also take account of local members and can also assess whether these are subjective or more fundamental issues associated with it. I will leave the question of environmental impact assessment screening to Mr. Sheridan to deal with.
There are three planning elements in this Bill. There is first, An Bord Pleanála fast track planning, the separate issue of environment impact assessment pre screening process, which we are bringing in to try to facilitate a quicker and more efficient system to deal with issues such as flood relief works, where under EU law there is a requirement to assess whether any project has an environmental impact or a habitats impact and make an appropriate assessment. Within the Irish system if the projects are below a certain threshold they are exempt from planning but they are not exempt from a screening process. By actually bringing in a separate screening process to a planning application, a local authority can assess whether an application does or does not have significant impacts. If it states it does not have then the exempted thresholds apply and a local authority can go and do some works. There is a twofold benefit to this. By confirming and ensuring we are fully compliant with EU law by providing for this screening process, but a screening process that meets the requirements will also enable us to look at the exempted development regulations and the thresholds that currently apply and for the likes of flooding works it is quite a low threshold. lf one can demonstrate there is a system that assesses, whether it is an environment impact assessment requirement or not, then one can raise thresholds in the regulations so that one could allow more not to have to go through the formal planning process. That is a requirement.
If I have not covered all the points, Mr. Terry Sheridan can touch on them. On the question of the Minister's additional powers, I think many of them to relate to regulations and the process as to how the system will work and would be quite standard in terms of other procedures and administrative aspects of the work itself.
The third element of the planning that we have not touched on but I think Deputy Ó Broin raised it was the timelines in regard to the Part 8 process. In summary terms and again we can go through it in more detail, there is an initial six weeks process for a public consultation. It is currently eight weeks. Once a proposal for a local authority's own development, including for houses for social housing or any other housing on local authority lands, there will be an initial six week period, then there is a process which is a manager's report and that has to happen in eight weeks. Under the current system, there is no time limit on a chief executive presenting a report to the elected members. We are setting an eight week time period, that the chief executive has to deliver that to the elected members to consider. The elected members then have six weeks in which to consider whether they accept, reject or vary the proposal. The end stop of that 20 week period is that where the elected members fail to make a resolution on the issue, the chief executive's report is deemed to be accepted. It is a 20 week period for the three phases and that is the maximum period.
I see that Senator Boyhan has returned. I might leave it to Mr. Niall Cussen to deal with the levies. I acknowledge that levies are adopted by the elected members so it may be a matter to look at the scale of them that may be more cogent to colleagues in Dún Laoghaire-Rathdown itself.
In terms of democracy and engagement with the local council, I had outlined previously the system where an individual, a local authority can fully engage. The local authority will have full powers and controls in relation to zoning in terms of local area plans, LAPs and its decisions as to where it sees land appropriate for housing and at certain scales and at certain densities. Applications under this process will only occur within lands that have been zoned and within the parameters and objectives of the development plan or local area plan.
We feel that full accountability for and control of that process remains in the local area. The process for a third party to make submissions is fully enshrined. The local authority in making its own submission can take account of any submissions that have been presented.
Senator Boyhan asked about the appeals process. The evidence we tried to present in our initial presentation outlines that in many cases the outcome of a decision or an appeal is broadly the same in many instances, perhaps with the exception of a reduction or a slight tweak to some of the conditions. The question is whether the system can be made more efficient by having that engagement and ensuring there is that discussion between the local authority, the board and the developer with the right information.
We are trying to shorten the process and make it more efficient. Bringing the board into it provides an opportunity for a greater consistency of application and consideration, but that is not to say that each of the 31 local authorities would make decisions themselves. We feel this is the right balance given the urgency to deliver on the huge number of sites. The Senator makes a very valid point in the context of the lands that are zoned and have planning permission. As I said at the start, this is not the silver bullet that will fix everything in the planning system.
What we are doing elsewhere in pillar 3 and across the five pillars of the action plan is focused on looking at the cost associated with development, releasing and accessing lands through infrastructure provision, looking at making better use of mixed-tenure developments where a local authority and private AHBs may together develop a better integrated project, and engaging with NAMA over lands that are currently tied up. We hope that all of these together will help to release some of those lands that have potential and planning permissions but are not reaching the market for a range of reasons.
The Senator mentioned some broader issues outside the Bill relating to consolidation of the planning Act and the planning regulator. It goes back to the point raised by the institute about the root-and-branch review. The Bill deals with fairly tight issues. Starting a consolidation of the planning Act is not an easy process, but we have tried to make it as simple and accessible as possible by having a formal-informal consolidation, so to speak, that the Law Reform Commission has actually done - it is on our website. Any amendments made to the planning Act or the planning regulations are integrated into a master document. While it might not formally recognise a consolidation or a simplification of the planning Act, we have tried to make it as accessible as possible through the Department's website.
The planning regulator is obviously a key element of the Planning and Development (Amendment) Bill which is on Second Stage in the Dáil. That primarily relates to the Mahon tribunal recommendations and the establishment of the office of the planning regulator. As part of any root-and-branch review that will happen early next year, it will take account of the functions the Department, the board, the planning regulator and the local authorities should have.
Deputy Casey asked about the nine weeks and the consultation. He might have slightly mixed up the EIA for the screening process and what happens within the nine-week period. The nine-week statutory period will involve an assessment of whether a project needs an EIA. That will be determined in consultation with the board and the local authority. So both sides will be able to determine if it is of a scale or a far bigger project. If it is an EIA, it would not even be ready for submission to the board until the EIS has been prepared and further analysis done. It almost kicks a project back. If it is for EIS, it will not actually be ready to go into the system and that is where the pre-consultation is so vital.
As I mentioned the fees are covered in the regulations, so there is no reference to the issues there.
I will let Mr. Cussen deal with some of the items, followed by Mr. Sheridan.
Mr. Niall Cussen:
I thank the committee members for their good questions. Senator Boyhan's point about the Dublin housing supply and co-ordination task force is valid. It is important for the work of the Department that we have a survey of lands that are available for development, have planning permission and so on. The report he mentioned concluded that approximately 26,000 homes in the Dublin area have the benefit of planning permission and a further 20,000 homes worth of land is infrastructurally unconstrained and available for development after that. It is important to remember in whose hands those lands lie in terms of being capable of having development carried out, not being financially impaired, etc.
From the analysis we carried out, it is notable that many of the extant permissions are quite old permissions and very often subject to extensions of duration. They are coming to the end of their lives. Our legislation is borne of the following question. Having been through a development plan process that identified lands as being suitable for residential development in principle in the first place, that taking two years, very often local area plans fleshing out that broad principle in a lot of detail in terms of where the open space is, how the access will be provide, etc., taking a year or 18 months on top of that, as well as the previous permissions on that site, etc., will we still have a process that takes a year, 18 months or longer to effectively refresh or renew those permissions, having been through a load of detail already?
This is a point that comes back very clearly from the industry in terms of the need to continually refresh the permissions and ensure they are attuned to the requirements of the housing market and people who need homes. There are all sorts of changes in terms of design, etc. The planning process at the moment does not distinguish between that and any other planning application - one is back to square 1. We are in the midst of an unprecedented housing crisis. We were obviously keen to see if there was a mechanism whereby we could speed up that process of renewing those permissions and ensuring they were in tune with current requirements and so on.
The Senator made a very good point about Kilternan-Glenamuck. We are acutely aware of the very significant tranche of land available there. He is correct in his calculations of the cumulative impact of the development contributions. The implication of that for the viability of development is plain for all to see, particularly in the context of Central Bank macro-prudential lending rules and what most typical households can afford. As Mr. David Walsh pointed out, this is a function of the elected members in the context of the preparation and adoption of those development-contribution schemes.
In this particular one the development contributions are so high, particularly relating to the roads and other elements, because in effect the local authority has had to factor in a very significant amount of land acquisition cost in the context of putting together estimates for the provision of the infrastructure. Obviously the cost of developing distributor roads and so forth runs to more than the cost of the concrete and tarmac, and also incorporates the cost of the land on which the infrastructure sits. As the Senator well knows that is probably one of the most valuable areas of real estate in the country.
I reassure the committee that this is an issue of which the local authorities and the Department are acutely aware. It is being worked on with the landowners in the context of an alternate arrangement. Rather than the circular arrangement of having a very large contribution which collects a whole load of money, which pays for compulsory acquisition of land which goes back to the developers, could we not have a far simpler system whereby, in effect, the land is proffered at a very low cost or nominal cost and obviously the reduction that would enable would be reflected in terms of the development contribution and so on?
However, there are a number of technical issues relating to the development of that land, the relocation of a 220 kV overhead power line, the development of the stricture road effectively sitting in the footprint of that power line, old landfill and other issues that have to be dealt with in that context in terms of excavations and so on. That is a very active area of investigation and assessment, involving the housing delivery office, the local authority, etc., as well as EirGrid and ESB Networks.
I hope we will get a breakthrough on that shortly because it is a key block of land and progressing it is very important. Land cost is the main reason the contribution is so high but developers are now engaged in finding an alternative way to deal with it.
Mr. Walsh dealt with some of the other questions, including those related to the interest cost. When the conventional pillar banks are not in a position to lend to developers to acquire sites which do not have planning permission, developers have to have recourse to mezzanine or senior debt funders who have a much higher rate of interest than providers of pure development finance. Housing providers on the ground emphasise that, once a site is acquired, the meter is running on the interest cost.
A question was asked about our data on ready-to-go sites. Members will be familiar with Myplan.ieand the Dublin housing task force site viewer, which has a comprehensive database of all lands that are zoned for development, have planning permission or are active and waiting a response. We do not constantly monitor sites which are going for sale but we monitor broad trends on site sales in the commercial press. In the loan portfolio sales we are seeing an increasing supply of sites and strategic development zones, STZs, moving into new ownership.
Deputy Ó Broin asked a very good question about research into requests for further information. We maintain a constant overview of general patterns and trends in local authorities and are constantly looking at cases which come to our attention in the course of our interaction with local authorities. I am a professional planner and I maintain constant contact with all my colleagues in the Dublin local authorities and across the country. Getting everybody around the table, not just planners and architects but roads people, parks people, Irish Water people and all the various players, can be challenging but it is crucial for getting a comprehensive picture of the factors that will be taken into account in the determination of a planning application. Some of those challenges are not met as effectively as they should be and there is a subliminal sense that where one has the facility to deal with or to clarify a request for further information, the application can be let go and we can get the views of the public. However, most large applications go through the clarification of further information process, and there are some very interesting dates among the 15 or 18 cases the board has brought to our attention in 2016. These are not only single requests but multiples and if all this transpires in the course of a planning application it begs the question of what the preplanning application process and the consultation process were about. The discipline inherent in the board having to make a straight decision to grant or refuse forces a big focus, early in the preapplication process, on getting all the stakeholders around the table to ascertain the parameters that will be important in the context of the determination of the application.
The Deputy also asked a question about research into or evidence regarding preapplication consultation requests. We have issued two circulars in the past couple of years, particularly in the context of the Dublin housing task force, in which we emphasised that we would like to see preapplication consultation requests turned around within a fortnight. Despite the circulars, we are constantly getting feedback from practitioners and others who prepare planning applications, such as architects, engineers, planners etc., that many local authorities are struggling to achieve this.
Mr. Niall Cussen:
We are strengthening the staffing of local authorities as part of the broader action plan on housing and other measures and we have approved some 600 posts for a wide range of professional and administrative positions. Local authorities are well engaged in the process and the Deputy will be familiar with this from his own local authority area. It is a constant process. We are very quickly turning around requests from local authorities to fill posts and we constantly interact with local government and support its work to increase staff complements.
There was a question on the capacity of An Bord Pleanála. The board has long had the strength and capacity to handle large planning applications. It used to have a large housing projects team and, given the fact that the vast majority of large housing applications take place in Dublin, there is strong merit in creating such a dedicated team within the board for this purpose. It would know the whole area of housing policy and, rather than be fragmented across four local authorities in the Dublin area and eight in the wider Dublin area, it would have a singular focus on getting high-quality developments in good locations and would ensure a high-quality environment for the people who are most important in all of this, namely, the people who live there. It is about efficiency and economies of scale and the need to make sure that the people who deal with the cases do so on an ongoing basis and are familiar with all the technical issues that may arise.
I understand how difficult it is to break the logjam and to get houses delivered. There is also a need for the public to have a transparent system. In Tipperary it is very difficult to get a preplanning meeting. The system has tightened and tightened and tightened and the role of the public representative has been completely diminished. It is not that they wanted to interfere but they were a conduit for the public. They are, after all, public representatives and they used to tease out the issues over public consultations and give advice. Our county has now decided to stop on-site planning meetings involving public representatives and a client for one-off houses, which have an important role to play in dealing with the housing crisis, though we are not dealing with them today.
We have to do something but there is a number of housing estates in Tipperary which are bombsites. They have just been left there, with people living in darkness and in dangerous conditions. Planning was applied for and given but there has been no enforcement and planners say they can do nothing about it.
It is hell on earth for people. They are facing the winter with no lights or footpaths, and there are holes and dangerous objects. They are living in fear, especially with no lighting. While this matter must be dealt with, I just wonder whether local authorities have the will and way to deal with it.
Reference has been made to the charges. The excessive charges are a cash cow for county councils. They must be examined. They might have been okay in the boom, if they were ever okay. For a private individual or builder building a house, the costs associated with charges, VAT and fees are nearly half the cost of the building. We cannot address the matter without considering this. I realise the Department is doing its best but a lot of soul searching must be done because we have failed miserably. I am talking about my county, a rural county. If we are to fast-track planning, will we have worse circumstances and outcomes, with the public having no say?
EirGrid was mentioned. We have seen officials of An Bord Pleanála ending up in EirGrid. Communities distrust An Bord Pleanála as a result of those issues and others.
I welcome the officials from the Department and the institute. This is an important engagement this morning. We all acknowledge there is a housing crisis. From the outset, we need to ensure we keep intact the integrity of the planning process. I do not doubt but that the new legislation achieves that. The officials might clarify where the integrity is defined in terms of the new legislation. It is important for public representatives and the wider citizenry to have confidence in our planning system.
I acknowledge this is reactionary legislation due to the times we live in. The delegates might comment on some of the proactive planning envisaged. I acknowledge this is a matter for another day but they might comment on it in light of the new national development plan. Mr. Cussen stated the demand is essentially in Dublin and that he expects the large schemes to be rolled out mainly in Dublin. Fundamentally, that is the problem. Dublin is like a vortex for economic activity and, by extension, demand. We do not often see the term "balanced regional development". This term implies the spreading of economic activity across the country to areas that have capacity but which, unfortunately, do not have either the infrastructure or economic activity required to house many of the people we are currently trying to house. The officials might refer to that in their comments. There are many planners present. Until we have the wider holistic view, we will be revisiting this problem in another cycle. The officials might mention in their response that we need a more proactive planning vision for the country. That requires the necessary tools, not only for the policy makers but also for local authorities so they can provide capacity so housing and economic activity can happen in the regions. This would remove some of the considerable pressure in places such as Dublin.
I recognise this legislation is just one lever or tool in responding to the crisis we currently face. The Minister has no option but to examine all options for alleviating the pressure on housing. Planning is obviously one area he must examine. He must also account for viability, land use, etc.
The whole planning process must be taken into account. I take account of what Senator Boyhan said about the Dublin task force on assessing the existing planning applications. Could this be clarified? Some are quite old and may not be viable for one reason or another, be it due to levies, house design, house type or other factors. Could the witnesses respond on that? Is it likely that many will be reviewed under a new process? That is an important point to clarify.
Some people talk about the democratic deficit. For any councillor elected, it is when making a local area plan or county development plan or zoning land that democratic accountability should feature. Many of us were councillors. Could the delegates reaffirm that accountability still remains in the process? I believe they will confirm it but it needs to be reinforced in their response.
Could the delegates clarify that any large-scale housing project with over 100 units or any project for student accommodation will not be applied for in any place that is not accommodated under a local area plan or county development plan? Could they clarify that the local authority members will still have the final say on where future development will happen, and on its scale and density?
I am happy to see a defined timeline or sunset clause in the legislation. The final date is in December 2019. The Minister has flexibility to extend the period for two years. That is appropriate in the times we live in. Could the delegates confirm that when the time comes, be it December 2019 or two years later, at which time I hope the crisis will have passed, the legislation will dissolve and that we will then refer back to the existing position?
I wish to make some points on my experience of the planning process. The Irish Planning Institute has given views from the perspective of planners but there are sometimes conflicting views among planners. I have often noted frustrations emerge when local authority planners held one view and private planners held an opposite one. Ultimately, planners will decide in any case because An Bord Pleanála will hire them. The board will have the overall say in terms of recommending a decision.
The current frustration is over the delays in the local authority system, be it because of resources or other factors. One must be fair to local authorities because they were denuded of considerable expertise and staff over recent years. We need to recognise that as a committee. Many planners resigned or retired within the local authority system. Much experience has been lost. The consequence is that there are now many delays in having preplanning meetings. As I stated, there is frustration over a lack of consistency. The IPI made the good point that if a planner is appointed for a large-scale scheme, that planner should stay with it almost from the preplanning stage to the making of a decision. This is not currently the case. I and, I am sure, many members have seen cases in which the planner who deals with a proposal initially moves on in a couple of months, with his replacement possibly taking a completely different view. The new process might address that and result in more consistency in having dedicated personnel to deal with large-scale applications. The delegation might clarify whether this will be the case.
My other concern is on the appeals process. It is important that the officials clarify whether there is a concern. If An Bord Pleanála ultimately arrives at a decision, where is the right of appeal and who does it go to? Is it another body or somebody within the board? Where is the integrity within that process? It is important that this be addressed if it is not already addressed.
The flood relief measures in this legislation have not been spoken about. I have been working on this for a number of years. I refer to where lands have been damaged or flooded and the planning obligations regarding obtaining the consents, involving the officials from the National Parks and Wildlife Service, heritage officials, the local authorities and many others. It takes months for somebody who wants to repair a river bank to deal with waste permits and planning legislation and land is literally destroyed. We need a streamlined system whereby there can be an urgent response, not only to the OPW but, by extension, landowners, be it through the local authority or advice. Immediate consent should be given to them for the repair of land banks where flooding has occurred. I have seen land-holdings wiped out. Landowners are hamstrung. They cannot respond because they do not have the consents in place. Local authority officials are frustrated also. Could the officials clarify whether this legislation will address that problem?
This Bill contains some very welcome proposals. I have a few questions. I take a different view from Senator Coffey on the flooding of land. I believe that building on flood plains does not make sense. If it does, it makes sense only-----
That is fine. I have no problem with the Deputy disagreeing with me but my constituents would certainly agree with me when I talk about building on flood plains in my area. A flood plain is being built upon right now. It is an extension of an existing flood plain in County Meath-----
I am sorry, but I am not talking about Senator Paudie Coffey at all; rather, I am talking about the reference in the Bill I am reading. I am sorry that he is so sensitive to my comments and disappointed that he will not listen to what I am saying. I will not be shouted down by anybody, no matter what party he or she is in.
What I am saying about addressing a number of urgent issues is that the legislation clearly states there will be new EIA screening arrangements and the undertaking of works, including mercy flood relief works to be carried out by the OPW. This is a huge concern. In my constituency there are hundreds of houses which have been built on flood plains and the OPW is engaged in flood relief works. The point is they should never have been built in the first place. The reason flood plains are being built on is councillors changed the planning zoning. That is the problem. Building on flood plains is unacceptable and I am concerned about the legislation in this regard. I would like to think building on flood plains in east Meath to the detriment of hundreds of householders is absolutely unacceptable and would not like to see it continue.
The legislation refers to the sale of 20 units or more. If I sell 20 units or more, there will be a dispensation.
This is not to do with the rental sector. The Chairman should correct me if I am wrong, but there is a specific reference by the Department in the legislation - if it is to be discussed later, that is fine - to the sale of 20 units or more.
In many respects, there are already houses in Dublin which are empty. Is there any proposal in the legislation to deal with the 36,000 homes in Dublin which are vacant? There are 1,000 families living in hotel accommodation. It is very important that it be included in the legislation - it is the recommendation of the Housing Agency - that the Department have a policy on the management of local authority homes which are empty. If 1,000 of the 36,000 homes in Dublin which are empty could be brought back onto the market, it would make a significant difference. Do the delegates have a view on this?
I accept and acknowledge the importance of fast-tracking planning permission, but my difficulty is that land which has already been zoned in the greater Dublin area is not being built on. Extending the period of planning permission for this land when it is capable of being developed now does not make sense. Perhaps I have a different view from that of others sitting at the table, but I am concerned that a significant number of players who exploited the last boom will exploit the housing crisis by holding onto and not building on land on which they have planning permission to build. I am very cautious about extending planning permissions without very good cause. However, I have no problem with fast-tracking planning applications, as proposed. It is a very important proposal.
I do not see it in the legislation and do not know whether it is included, but, whatever view we hold on the first-time buyer's grant, a very simple way to assist first-time purchasers is through the use of local authority land banks. Local authorities have a lot of land. I do not have the data to hand, but I know that they possess thousands of acres of land throughout the country which is suitable for development, but they do not have the funds to do so. Would it be germane to the Bill to provide an opportunity for local authorities which have identified land suitable for social housing to enter into public private partnerships to develop it? Such houses could be sold at a very reasonable cost because the land is already owned by the State. If local authorities were to enter into a public private partnership with a developer, the price of land could be controlled and we would get houses at a basic cost in central areas in towns and cities. This is an important issue which needs to be addressed.
I thought there was confusion about the fees payable. It was stated half of the fees would go back to local authorities. Where exactly do they go? They should stay with the local authorities as there is a lot of extra work to be done. There is preplanning and all of the planning stages to be gone through. There is a staffing issue in most local authorities as staff have not been replaced. It is a five year process before one can apply to have a housing estate taken in charge. The local authority must take it on and will have ongoing electricity and maintenance bills. Whether this is included in regulations, it should be changed. Every local authority should automatically be given the full amount required for the upkeep of all the estates they take in charge. Can the legislation be changed to ensure this?
The Bill will only affect certain areas in bigger cities and towns. In rural areas local authorities have land on which they might build only 20 or 30 houses. It would be great to see this happen, but their provision need to be fast tracked. We used to have a four stage planning process with the local authorities through the Department. I dealt with the Department on housing issues when I was chairperson of the housing strategic policy committee in Carlow for ten years. Local authorities and the Department wait ages to receive further information. Local authorities will not build 100 units, although I wish they would, but even on a smaller scale, the process should be fast-tracked and the period changed to 2019 to give them a chance to build and have people housed because we are in a crisis.
On the resources available from the Department, it is important that local authorities have sufficient funding. It is important, therefore, that the Department work with local authorities to ensure this will be the case.
Mr. Brendan Allen:
I will try to keep my answers brief. We were asked to respond on three issues - the need for an appropriate environmental impact assessment, EIA, compliance and the research we have carried out. The Department has responded on the EIA issue. Generally, we welcome the proposal on EIA screening on the basis that it will provide a greater degree of certainty for developers in knowing what documents they will need to provide and that it will reduce the risk of applications being subject to judicial review. I presume from the legislation this will apply across the board to all developments, not just housing developments.
Mr. Spain will respond on the issue of compliance, while Mr. O'Leary will respond on the research we have carried out.
Mr. John Spain:
We are speaking about measures to reduce the timescale involved and risks in the planning application process. All such measures are welcome. An area in which further measures could be taken is the compliance process. It has long been recognised that there is a need to have a time-bound compliance process. At present it is not time-bound, which creates considerable difficulties when it comes to undertaking development. This leads to delays in the post-planning permission stage. Perhaps the opportunity could be taken in this legislation to put such a process in place.
There are other elements that can be fine-tuned or further developed within this proposed legislation to further achieve reductions in timescale and risk. For example, Mr. Cussen referred to delays and I certainly concur with his comments about the pre-application stage with local authorities. Again, the opportunity should be taken, we suggest, to put in place a statutory timescale for the local authority pre-application stage, which is the precursor to engaging with the board. It may fall at the first hurdle if significant delays remain, which is the case with some local authorities. The next stage of the process is the validation of an application following the pre-application process. Rather than being sent back to the beginning of the process if there is some shortage of information at that stage, provision should be made for the board to request the missing information from the applicant and keep going without starting again. That is trying to avoid the snake back to the beginning.
Another potential snake is if the board, having gone through the whole process, considers in making a decision that there is an absence of information. If information is missing or if changes in design and layout are required for it to be acceptable, the board should have a specific power to request that information or design changes. Any developer or applicant would much rather get a request for further information from the board than a refusal and a return to the very beginning of the process. I have no doubt the board would use such a power with discretion and only where it is really necessary. That can be addressed by practice guidelines.
There are two other points. Again, an opportunity should be taken to address the issue of amendment applications. Most large-scale housing applications are subject to subsequent amendment applications relating to house types and aspects of layout and design. The legislation makes no specific provision for that. The question arises in the case of an amendment to a permission granted by the board of more 100 units as to whether the amendment application goes to the board or back to the local authority. I suggest it should go to the local authority but that should be explicitly addressed, with specific power to make amendment applications provided for in the legislation.
Mr. Seán O'Leary:
With regard to Deputy Ó Broin's questions, the bullet point No. 1.6 refers to our own research involving a survey of members over the summer. The results of that are available on a blog on our website, www.ipi.ie. I can make the link available to the committee. That threw up land costs, financing and infrastructure as the key issues identified as delaying the obtaining of permission. That also refers to a survey of the profession we did last year, indicating the number of planners in planning authorities dropped by approximately a third over the course of the recession, which is a source of some of the pre-planning delays as well. The figures are from figure eight on page 35 of the board's annual report from 2015. The chairman's introduction states the board has seen an increase in 100-plus unit applications in 2016 but they have all been dealt with within the 18-week period. It does not specify the number of those for 2016 but it also takes in 30-plus unit applications in 2015, and there were approximately 60 of those. All of those are currently prioritised by the board anyway, as set out in the annual report.
It is the really relevant part of the issue. Dr. Hayden and Mr. O'Sullivan have been waiting so I will move to the next section of the Bill and ask witnesses to answer the questions that were asked, if that is okay. I thank the Irish Planning Institute representatives for attending this morning and providing their very valid contributions. They are more than welcome to stay and participate but I am sure we will see them again in the not too distant future anyway. I welcome Dr. Hayden and Mr. O'Sullivan from Threshold. We will take their statement as read but if they want to make a couple of opening comments, we would be delighted to hear them.
Dr. Aideen Hayden:
I thank the chairperson and members of the committee for giving us this opportunity to speak on the forthcoming housing (miscellaneous provisions) Bill 2016. I understand the committee received a copy of our submission in advance and a copy of our pre-budget submission. I will take this opportunity to make a couple of points.
Threshold is a national housing charity that solves housing problems and prevents homelessness. We have regional advice centres in Dublin, Cork and Galway and we provide a front-line service to over 32,000 people annually, primarily but not exclusively in the private rented sector. Many of our clients are paying a very severe price for the current housing shortage, principally due to rising rents, being forced to accept unsuitable housing and living in constant fear of losing their homes. With regard to the committee's previous discussion, anything that works effectively to secure a greater number of homes and social homes in particular through the Part V process must be seriously considered. Improvements to the planning system that will benefit our clients would be welcomed by us.
Most of our comments today will focus on heads 25 to 30 of the draft Bill, which deal with changes to the Residential Tenancies Act 2004, as amended, and changes to improve the functioning of the Residential Tenancies Board. We have some comments on student accommodation as well. Our position is that whereas we recognise the proposed measures bring some level of relief to the sector - which is in crisis and the action is welcome as such - the measures do not go far enough and should be expanded to protect many more vulnerable people who stand at risk of losing their homes. The rise in market rents generally continues to outpace inflation and it will not be long before the protection that was offered by the temporary two-year pause in rent reviews and even the recent rise in rent supplement limits will lose effect. It is urgent that a more permanent and balanced approach to regulating rent increases in particular be put in place.
Rebuilding Ireland, the national housing strategy, is incomplete as yet and does not contain measures to reform the private rented sector. We must have a national strategy for the private rented sector that is adequately resourced with clear targets to address issues like long-term rent certainty, increased affordable supply, improving the quality of rented housing, promoting institutional investment and dealing with the difficulties in the buy-to-let sector. It is more than 15 years since we had the last strategic review of the private rented sector.
I will deal with the individual heads. Head 25 deals with the continuation of tenancy upon the sale of rented property. The number of rented households facing loss of homes due to the proposed sale of a property by a landlord, lending agent or an investment fund is of particular concern. As many members know, Threshold recently provided on-site advice and support to tenants facing mass eviction in Tyrrelstown in north-west Dublin; that issue led to the proposed change to section 34 of the Residential Tenancies Act 2004. This is set to become an even more serious problem over the next number of years as a significant number of distressed mortgage properties have been purchased by non-bank entities such as large investment funds, which have a business model of selling these investments within three to five years.
There are 47,402 mortgage accounts held by non-bank entities and a total of 19,701 mortgages in arrears held by non-bank entities. We welcome the announcement of the Minister for Finance, Deputy Noonan, that he intends to introduce measures in the finance Bill to target vulture funds and introduce restrictions to prevent them from designating profits and paying little or no tax on them. Legal safeguards must be put in place to give residential tenants similar rights to the tenants of commercial properties who remain unaffected by the sale of those properties.
We welcome the proposed legislative change that protects tenants to some extent in cases where 20 or more units in a development are being sold in a six-month period. The proposed change provides that a tenancy should not be terminated but at the same time the proposed protection is too narrow. For example, it does not apply where a landlord can show that the price to be obtained by selling the dwelling is more than 20% below what could be obtained with vacant possession. If enacted, the legislation must be drafted in a manner that ensures the requirement is robust and subject to rigorous proof, as we believe the provision could be open to widespread abuse. The provision applies where 20 or more units are being sold. This stipulation would exclude a great majority of cases where protection is needed. Our view is that the sale of any rented property should not lead to the termination of a tenancy. Section 34 of the Residential Tenancies Act should be reviewed to remove sale as a justification for the termination of a tenancy in any case where the property is in the ownership of an institutional landlord or where the landlord in question works as a property professional and owns, for example, in excess of three properties.
The extent of vacant properties in Ireland has been brought into sharp view recently and it is in clear contrast to the severe shortage of properties to rent as indicated by the Daft rental index. Where vacant possession is obtained for sale purposes and receivers are appointed to properties Threshold's experience has been that these properties have been left unoccupied for a considerable period of time and are adding to the number of vacant properties in Ireland. Failing that, we would suggest at the very least that the requirement that a notice of termination be given only after the sale of a property has been agreed rather than the simple production of a declaration of intent to sale which, at the moment, is grounds under section 34 for the vacation of a property.
We would very much like to see the current legislation introduce an additional amendment to deal with the situation of repossessions and receiverships. Threshold believes there is a very significant opportunity in this legislation to amend the Residential Tenancies Act to extend the definition of landlord to include receivers and lenders in relation to the repossession of property. There is no doubt that a change in the law is required to protect tenants in cases where their landlord's property is being repossessed or where a receiver is appointed to un-mortgaged properties. Due to a legal loophole in the Residential Tenancies Act 2004, lenders or receivers may seek to summarily evict a tenant without giving them the notice required under law. In some extreme cases tenants come home to find their locks changed, effectively making them homeless. Receivers also may refuse to carry out repairs and ask the tenant to pursue their former landlord for the return of the rental deposit. A tenant should not lose his or her basic rights because the landlord is in financial difficulties. We are also seeking the introduction of a code of conduct on buy to let mortgage arrears which would introduce a transparent process for financial institutions, landlords and tenants and set out the required steps for engagement with landlords and tenants, along with forms of communications and ensure that financial institutions respect and uphold tenants' rights, which they currently do not do.
In my presentation I have set out the extent of the difficulties that our clients are experiencing, as illustrated by recent Central Bank figures. There is no question or doubt, looking at the number of buy to let mortgages in arrears of over 720 days, that the issue of receiverships being appointed to buy-to-let properties, and those properties effectively being left vacant and tenants being put out of those properties, is something that must be addressed as a matter of urgency. We are asking the committee to use this legislation as a way to introduce protections for tenants in situations where receivers are appointed to properties.
Head 26 deals with the repeal of section 42 of the Residential Tenancies Act, where a landlord can terminate a further part 4 tenancy without reason during the first six months of the tenancy. The removal of this provision is a positive measure but we do have concerns in that the further part 4 tenancy may be treated as a new tenancy which would allow a landlord to sidestep the current protections in regard to rent increases. We would like the provision to be changed to ensure that does not happen. It is our view that tenants at the moment have insufficient security of tenure. We believe tenants should have indefinite security of tenure. While the removal of the provision is welcome, it does not go far enough to clarify the situation, as things stand at the moment, in relation to security of tenure.
Head 27 amends section 100 of the Residential Tenancies Act. It provides for a reduction in the time-frame for the submission of appeals against a determination of an adjudicator, from 21 days to ten days. Threshold urges caution in respect of this amendment. From our own experience, by the time one of our clients receives a determination which is unfavourable, contacts us, discusses the options and lodges an appeal, a ten day time frame may be very challenging. These are tenants who are getting the benefit of expert advocacy and advice from an expert organisation. There are many tenants out there who are vulnerable and who are not getting that type of advocacy and advice. Even though there are provisions to allow the board to extend the appeal period, Threshold believes that the ten day time frame is too tight. Currently there is no strategic framework for planning, monitoring and funding housing advice and advocacy services. There is plenty of evidence that tenants are not aware of their rights. Threshold believes that there needs to be a dedicated funding mechanism to address this as a matter of urgency as there is significant human suffering to many, many tenants. It should be acknowledged that one in five Irish families in the State are living in private rented housing. We ask the Government to put in place a national awareness campaign to ensure that tenants are made aware of their rights.
Head 28 is an amendment of section 103 of the Residential Tenancies Act 2004 which provides for the holding of one-person tribunals to assist in speeding up the process. If one looks at the level of disputes that come before the Residential Tenancies Board, RTB, we contend that if more time went into the setting up of the deposit protection scheme - which was a commitment of the 2015 legislation - it would have a major effect in freeing up the capacity of the RTB to hear more cases. While Threshold does not believe it would necessarily be an issue, one-person tribunals in cases that can be quite significant to the individuals concerned such as in issues of rent arrears, could lead to situations of bias. For the record, Threshold dealt with 969 cases last year where tenants had difficulty in getting their deposit back from the landlord. The failure to return deposits can place a tenant at risk of homelessness. Threshold agrees that the implementation of the deposit protection scheme in Ireland is something that should be introduced as a matter of urgency and should be a priority for Government.
Head 29 is the amendment of section 121. Threshold sees that this measure will improve the processing times for dispute resolution with the RTB. We are in agreement with the amendment. Head 30, amending section 124 of the Residential tenancies Act, has the effect of allowing the District Court to make an order for possession. The effect of this amendment will be to speed up the process of securing the vacation of dwellings and will have a significant impact on the number of tenants who are at risk of homelessness. In response, Threshold believes that a protocol should be developed between the RTB and the relevant local authorities so that a local authority is alerted where an over-holding case is identified as a bona fide inability to secure alternative accommodation as a source of the dispute. The local authorities should have to assume an obligation to source alternative suitable accommodation either in the private rented sector or in a relevant social housing unit if the person qualifies for social housing, within a specified time frame, through its fast-track accommodation finding service. Such a service could be run in conjunction with the community and voluntary sector and possibly as an extension of Threshold's tenancy protection service. The fact of the matter is that many tenants are over-holding because they cannot find somewhere else to live. That is the reality of the situation.
Section 32, amends the Housing Finance Agencies Act 1981 to provide the Housing Finance Agency with the opportunity to lend to higher education institutions for the purposes of the provision of student accommodation. We think this is an important change. At the moment there are SOME 24,000 students who are renting from private landlords. In the main this accommodation is entirely unsuitable. The style of renting in the private rental sector is not usually suitable for students. There are only about 3,000 purpose-built student accommodation units. Ireland is looking at an increase in student numbers of about 20,000 over the next number of years and therefore it is critically important that third level institutions not only have an ability but a duty to provide third level education accommodation. We would like to see a condition in relation to affordability being introduced. Where State moneys are being made available it is very important that the type of accommodation being provided is affordable for students. As an organisation, Threshold has seen instances where on-campus accommodation has been subjected to significant rent increases over short periods of time , making it unaffordable. If students cannot access accommodation, for many of them they cannot access an education. Where campus extensions are being agreed Threshold would like to see the planning code changed to oblige third level educational institutions to provide for additional student accommodation also. I thank the committee for having us here today. My colleague Mr. Diarmaid O'Sullivan and I are happy to answer any questions the committee might have.
I thank Dr. Hayden for her presentation. I would like to put on the record the particularly effective work done by Threshold in the tenancy sustainment programme. I deal with Laurence Kinch a lot and the service is making a huge difference to a very significant number of people's lives. It is important that we acknowledge that. I have questions on this section for Threshold and for the Department. I will go through them by each head and people can respond as appropriate. For clarification on heads 22 and 23 with regard to the leased approved housing bodies' properties, could the Department give the committee more information as to why that is necessary? Is it just the case that they are not covered under the Residential Tenancies Act currently because they are leased properties or is there some other reason? I would be interested to know.
Is it just a case they are not covered under the RTA currently because they are leased properties or is there some other reason? I would be interested to know that.
The big concern many of us have with head 25, which is the substantive piece of this part of the Bill, is with the figure of 20. If I understand the head right, it means that somebody cannot serve notices to quit on 20 properties within a six-month period but they could serve notice to quit on 19, 18, or 17 of those within the six-month period and then the rest after that. The Department believes this is an appropriate number. Is there research to back that up? On what basis did the Department reach that number? Can it give us more information? The Department also argues that to go for developments of more than 20 units would lead to market distortion. Part of the difficulty is that the market is already very distorted. I find it hard to see how allowing for larger unit developments would be a problem. Will the Department give us more information on that?
The vast majority of people at risk of homelessness as a result of repossession and being served with notices to quit are in properties where the landlord owns a single unit or has a small number of properties. There is also a situation where in defined geographical areas, a bank will repossess multiple properties, sometimes in the region of 20 or more, and will serve notices to quit. They could be all in a number of housing estates in close proximity. The geographical impact of those notices to quit will be identical if they are spread over a relatively confined geographical area as they would be in a multiple unit development. Was any consideration given to that and, if not, why not?
My next point was referenced by Dr. Aideen Hayden and it is the point that Deputy Fergus O'Dowd wanted to raise. I am very concerned that subhead 2 of head 25 will not apply in circumstances where the landlord can show that the price to be obtained by selling the dwelling subject to an existing tenancy is more than 20% below that which could be obtained with vacant possession. What is the rationale for that? On what basis were those figures picked? My real concern here is that while this would be a welcome a development for people living in a Tyrrelstown situation, they represent a tiny number of the people who are now being made homeless as a result of notices to quit on the basis of vacant possession orders. I am keen to understand that properly.
Do I understand head 26 correctly that the intention of this change is to end probationary tenancies after the first tier part 4 tenancy so there is no probationary tenancy in the first six months of year five of the tenancy? One of the issues that has arisen following the incorporation of approved housing bodies into the Residential Tenancies Act is whether somebody who has been a long-term tenant of a voluntary housing association and has now been given their first part 4 tenancy is subject to any undermining of their rights during that six-month probationary period. There are a couple of cases going to the RTB in the next couple of weeks which will test that for the first time. Was there any consideration given to retrospectively applying this change to somebody who is already a long-term tenant, in some cases up to four years in an approved housing body, but all of a sudden is now in a six-month probationary period under this section? What about those people who are stuck on year-to-year tenancies who have never been given a full part 4 tenancy and therefore cannot avail of some of those protections?
On heads 27, 28 and 30, I would like the Department to respond to the specific issues that Dr. Aideen Hayden raised in terms of the concerns because I share them.
On the issue of student accommodation, these loans will still go on the Government balance sheet in terms of impact on the debt because they are Government guaranteed loans. The witnesses should correct me if I am wrong. If I am not wrong, what is the prospect of significant lending? Also, if I am wrong, what is the expectation in terms of the level of lending that might be provided? This is a very good measure if it results in significant increased investment in student accommodation.
I want to make a clarification. I am aware of the great work Threshold does. It is not easy, particularly when dealing with people who will become homeless. Carlow is my area and we are a big IT town. We have St. Patrick's, Carlow College and the Institute of Technology, Carlow so we are very lucky. We find that sometimes landlords will not accept certain tenants into rented accommodation. There is a new HAP scheme which landlords are inclined to refuse. We are getting to a stage where we have people becoming homeless because the landlords will not accept recipients of HAP or because the rent is too high to qualify for the HAP scheme. Is that an issue? One has to be on the local authority housing list to qualify for the new HAP scheme. We used to have what was called the midlands rent unit or Dublin rent unit. One did not have to be on the local authority housing list to qualify for rent allowance. There is an issue that when one is on the HAP scheme, one is also on the local authority housing list. What is the story with the midlands rent unit and other units around the country? Will the Department leave them there?
In terms of the regulation of tenancies, what regulations are there? I constantly have people coming into my clinic because they are being evicted. They are told they could be out within two weeks. What can we do to make sure that a tenant in rented accommodation has at least three to six months' notice? If the tenancy has lasted for five years, I was told that normally the notice period is six months but now the landlord can say he or she is selling the house and the tenant has to be out within a few weeks. We need to make sure there is regulation. What are the witnesses' views on that? It is important that people are left there because we cannot find other accommodation for them. I will come back on that. I have other questions on the HAP scheme and the rent allowance which I will address later.
I am conscious of time so I want to be brief. I thank Dr. Hayden for coming in. She clearly has a huge amount of experience. I am very conscious of her former involvement in the Private Residential Tenancies Board and her work there. She now works in Threshold and has had a long-standing relationship with that body. I have read the 22 recommendations in Dr. Hayden's pre-budget submission and I will take an opportunity later to talk to her about how she got on with that and how happy she is with it. That will become more obvious in time.
I will touch on one item under head 30 which was also referred to in Dr. Hayden's report. She talks about developing a protocol and about the obligations of the local authority. Obligations are one thing but there are also the issues of resources, a whole load of responsibilities, commitments and legislation and giving effect to that. Will Dr. Hayden tease out how we can give effect to that? In my local authority we use and recommend Threshold but some local authorities say they cannot advise or assist and tell people to go to Threshold. People come into a room once a week and it is all a bit vague. They tell people to make an appointment with Threshold. There is a disconnect between the good work of Threshold and other bodies that do similar work and the local authority. Dr. Hayden talked about a protocol being developed. It is a good one. How to give effect to that protocol in a way that is binding and clearly understood by all parties is something I would like to hear more about. Will Dr. Hayden tease out a little bit more what she envisages in respect of that proposal?
I have one supplementary question or comment on student accommodation. To put it into focus, we are all very familiar with the UCD campus. UCD wants to put in a further 3,000 beds. If they can provide 3,000 beds, that is 3,000 students out of rental accommodation in the satellite areas around UCD. I do not want to go into the action plan for housing, but it will help our rental supply in the private sector. I want to put into context how important it is. If we can approve that section it will play a huge role in turning around the supply in the private rental sector. I will go back to Dr. Hayden.
Dr. Aideen Hayden:
I will hand some of these questions over to my colleague, Mr. Diarmaid O'Sullivan. On the question of 20 as a number, we do not believe in it. Our view on it is that where institutional investors are involved we do not care whether the number is 20, 19, 18 or 17 or 1. The bottom line is they are institutional investors and we want to see those properties sold with the tenancy intact. On receiverships and the point that was made about banks having their property scattered in an area, the question arises of what is defined as a geographic area.
In my opinion, it can be a portfolio held by a bank. To my mind, they are institutional investors and should qualify as such.
Our point on receiverships is simple. The property should be sold and, in an ideal world, with the tenancy intact. The issue of buy-to-let receiverships is significant. One issue of concern is that local authorities and voluntary housing bodies have a mandate from the Government to purchase properties on the open market. They are restricted to only buying properties where there is vacant possession. Obviously, this excludes them from buying properties in receivership where a tenancy is in situbecause the purchased property is supposed to be made available to the local authority housing waiting list. Accordingly, if it is bought with a tenancy intact, then in some way that subverts that process. We need to find a vehicle or some manner in which local authorities and voluntary housing associations can buy properties where receivers have been appointed and where tenants are in situ. A significant number of these tenants are already on the local authority housing waiting list and in receipt of rent supplement. A significant number of them are also vulnerable and liable to end up in homeless services. Will this be considered by the Department an important measure to take? We are limiting our capacity to purchase properties by insisting they are left vacant.
Mr. Diarmaid O'Sullivan:
Deputy Ó Broin asked about the tenancies at risk. The majority of tenants who come to Threshold whose tenancies are at risk would be in situations where a receiver has been appointed or a lending institution is seeking repossession of their property. There is little if any guidance as to how this process happens. Due to a loophole in the Residential Tenancies Act, they are not considered to be landlords for the purposes of the Act. This means a landlord's statutory obligations do not apply to either a receiver or a lending institution. This needs to be changed.
Threshold is advocating that the definition of “landlord” under the Residential Tenancies Act 2004 be widened to include a receiver or a lending institution. This would provide some greater security to tenants, particularly to those whose properties have gone into receivership. The receiver or a lending institution would then take on the responsibilities of the landlord.
The deletion of section 42 of the 2004 Act, under head 26, is a welcome development. However, it still does not go far enough in providing for indefinite tenancies for tenants in the private rental sector. The continued existence of Part 4 tenancies means that tenancies at the end of a four-year cycle can be brought to an end. We believe this needs to be removed to ensure indefinite tenancies become the norm, as is the case in mainland Europe. This is a measure also supported by the National Economic and Social Council in a 2015 report. There certainly need to be changes in that area.
On those on year-to-year tenancies, the protection of the Residential Tenancies Act and Part 4 tenancies will actually kick in regardless of whether an individual is signing a succession of one-year leases. It will still have the statutory protections. However, as I have said, they do not go far enough and these tenancies can still become at-risk at the end of a Part 4 cycle.
Perhaps we will not focus on Senator Murnane O'Connor's point about landlords refusing HAP, the housing assistance payment. Recently, however, changes to the Equal Status Act mean that refusal by a landlord to accept a HAP or rent supplement tenant is actually in breach of the legislation. In theory, there is protection under the Equal Status Act. Proving that a landlord is refusing is certainly an issue, however.
On notice periods, particularly when a property is being sold, under the Residential Tenancies Act the amount of notice a tenant is entitled to goes from 28 days to 224 days, depending on the length of the tenancy. In a situation where a landlord tells a tenant that she or he is selling the property and needs them out in two months or two weeks, this would not be valid under the Act. It underlines the real need for a strategic approach to housing advice and advocacy services. There is certainly a need for an awareness campaign to ensure tenants are aware of their rights under the law, as well as making public representatives and statutory and voluntary agencies aware they can refer tenants who face these types of problem to a relevant agency such as Threshold to provide them with advice they need to ensure their rights are upheld under the law.
Dr. Aideen Hayden:
The tenancy protection service run by Threshold in Dublin, Cork, Galway and the Dublin commuter counties is, we hope, due to be extended nationally. We are hoping to announce this shortly. That would be of a particular benefit to counties such as Carlow and Kilkenny.
It is important to understand that people coming to our tenancy protection service are deemed to be at immediate risk of losing their home. About half of them are actually working and are not in receipt of rent supplement or any other benefit. In many instances, they would be eligible for HAP. It is important to understand the payment is progressive.
Yesterday's budget announcement of another 15,000 units of HAP being provided for, underlines the reliance of the State housing programme on houses being provided in the private rental sector. As I said at the very beginning, the private rental sector is not fit for purpose. Up to 35% of all families with preschool children are living in a private rented home. The child care measures announced in yesterday's budget can be wiped out in one fell swoop with a 10% to 20% increase in rent. Up to 30% of those who attend our tenancy protection service have had increases of between 11% and 30%.
While there are welcome measures in this legislation, it is only a small part of the answer. What we really need is a long-term strategy for the rental sector which will make it fit for purpose and answers those questions.
We know a review of the rental strategy is under way and we are too reliant on the private rental sector. This is because of the deficit in direct build and private build. The committee is hoping the fast-tracking of this Bill will facilitate private home building, as well as direct build.
Dr. Hayden made an important point on the sales of properties with tenants in situ. It is important we point it out and get a response on this. What is the barrier to allowing a local authority or an approved housing body buy such properties? Is it the perceived notion that a tenant is seen to having his or her housing needs met ahead of others? Can a mechanism be developed to allow that transfer with the tenant in situ?
These are the things we need to do to think outside the box to alleviate some of the pressure. It will not release all of it, but it is one step we could take, perhaps in this scheme of the Bill or otherwise. It would tick nearly all of the boxes, apart from not being on the list as long as others. We need to do what is logical in our responses to the demand for housing. I would like to focus on that point, if possible.
Mr. David Walsh:
Before I hand over to Mr. Ó Cléirigh and Ms Clifford to deal with some of the issues raised on the rental sector and the provision of student accommodation, I will reflect briefly on the previous round of questions about the planning process.
A number of committee members have flagged the issue of zoning decisions and a diminution of councillors' role in that regard. I confirm that applications to the board will only be made where in the local development plan process in the local authority a clear decision and a requirement for housing has been signalled and the local authority has not zoned the areas in question. I suspect the board will not even accept an application in the first instance where this has not happened.
Senator Paudie Coffey raised an important point that beyond the single prong of assessing individual applications as part of a multi-prong approach by the Government to deal with the housing crisis, there is the more fundamental question of how as a country we plan for the next 20 years as part of the national planning framework and how we can accommodate an additional 750,000 people who are expected to be living in the country and how this will impact on zoning decisions at local and regional level. This is where elected members and local authorities will have a central role to play in assessing requirements and addressing planning issues not only in urban areas where a lot of urgent actions need to be taken, in housing supply, dealing with homelessness and easing pressures on the rental sector, but also in smaller towns and rural areas. That is the key to how we ensure the country will be in a better place in 2040.
On applications being reviewed, in many cases we are seeing them being resubmitted because of economic changes. They might have been for multi-unit apartment blocks, but there is no longer a market for such accommodation and people are looking to do different things within the land involved. In some cases, planning permissions are being extended. There is provision for an extension where circumstances are beyond the control of the developer. We have seen examples of applications for large sites being resubmitted to take account of demand in the market in which circumstances are different from what they were eight or ten years ago.
Senator Victor Boyhan asked how the appeals process would work. It would be a judicial review. The board deals primarily with normal applications and has to be clear in making its decision and its reasons for it. If somebody is unhappy with that decision, it may be appealed by way of a judicial review, as happens in many other cases.
Mr. David Walsh:
It behoves us to ensure an application is correct at the earliest point in the process and we take account of all views.
On flood relief measures, a point was made about about the OPW having access. The thresholds stipulated will also apply to individuals. If a planning matter is screened and under the EIA threshold, it is an opportunity for individuals, as well as the State bodies, to deal with the issues involved.
Deputy Fergus O'Dowd mentioned empty houses. There is nothing in the scheme of the Bill that will address that issue, but I draw the committee's attention to a number of measures in the action plan under which, as part of the announcements made in the budget, there will be a range of schemes in place, for example, the buy-and-renew scheme for which €25 million has been set aside next year and the repair and leasing initiative, for which €6 million has been allocated. More broadly, there is a commitment to have in place by the end of the year a vacant housing reuse strategy which will look at both privately and publicly owned housing to ensure maximum use is made of it. I fully agree that this is where there is potential in the short term to get properties back into use and look at the issues surrounding the provision of student accommodation to be released into the private market.
On the residential land initiative, if local authorities purchase lands, they can go through the Part VIII process which has obviously been streamlined and further reformed.
Senator Jennifer Murnane O'Connor raised the issue of fees. For the purposes of clarification, there are perhaps three sets of fees paid. A developer or a housing provider pays a fee to have his or her application processed. It is apportioned between the board and the local authority. It relates to the time spent by the local authority in assessing and dealing with the application. There is a second set of fees which apply to prescribed bodies.
Mr. Walsh is correct, but the local authority will have the bulk of the work done before it goes to the board, apart from getting a decision on the application. In fairness, this applies to 80% of local authorities. I am saying that in these times when some local authorities are finding it harder, the bulk of the fees paid, not half, should be left with them. We all know that there are staffing and other issues to be dealt with. I firmly believe this issue should be looked at.
Mr. David Walsh:
I take the Senator's point. It is a matter to be dealt with in the regulations. It comes back to the broader issue of a root and branch review, in which perhaps the full cost to local authorities, as well as the board, needs to be looked at in terms of what is required to process applications.
The Senator also referenced the four-stage approval process for funding. The process to obtain planning permission for a development is conducted under Part VIII. It is being addressed and streamlined within the scheme of the Bill.
Can it be changed? As Mr. Walsh will be aware, within a local authority there is a four-stage plan. I have seen it take three years. I have seen a small one take three or four years. Given that there is a housing crisis, until 2019 there should be just one stage. Local authorities and the Department are both capable of making good decisions. Rather than move back and forth repeatedly, everybody should work together to get it done in one stage.
I will not refer to the judicial review, except to repeat the point that it costs a hell of a lot of money.
In head 4 of the document before us on the general scheme of the Bill the Department talks about the development that materially contravenes a plan. This is to allow the board to make decisions on applications that materially contravene county development plans. Will Mr. Walsh confirm this? In one short sharp sentence will he confirm that the legislation will permit the independent appeals board, An Bord Pleanála, to approve applications that contravene county development plans?
I refer to development contribution schemes. I was the pusher of two reviews in County Wicklow. One of the weaknesses of the review of the development contribution scheme is one cannot apply a decision retrospectively to permissions already granted; instead the planning application must go through the entire planning process again. Down the line, is this an issue we can address? If we are to address the unit cost of a house, the development contribution payable has been identified as one of the avenues to be explored. Developers should not have to apply all over again merely to qualify for the reduction.
Mr. David Walsh:
I take that point, perhaps not on the scheme of this Bill but as part of a broad review. As matters stand, a local authority can take account of the county development plan or a local area plan and in its own decision-making decide to materially contravene it. It can assess what is in place.
In making a decision a local authority can state that what is included might not be reflected in the zoning. That also applies to the board. If it has to take account of what the local authority states, that it is completely against it, that will be a major factor in the board determining whether to accept the application, in the first instance, and whether to grant planning, with or without conditions.
Mr. Earnán Ó Cléirigh:
I am aware of the time factor and will be as brief as possible. I will probably not cover all of the questions raised.
As Dr. Hayden mentioned, the legislation does not address all of the problems in the rental sector. Clearly, it does not, but it is not intended to. We are in the process of developing a strategy for the residential rental sector which will be published later this year. It will cover many of the issues raised and there will be an opportunity to engage in consultation in its development and that process will start later this month. All of the issues raised about extending the definition of landlord, dealing with the problem of landlords who are over-leveraged, the owners of buy-to-lets properties who are in arrears and moving towards greater long-term security of tenure for tenants will be addressed in the strategy.
I would like to respond to a number of the specific questions asked. Deputy Eoin Ó Broin asked the reason heads 22 and 23 were needed. It is to reflect the changed reality in which approved housing bodies are leasing properties in the private market. The conditions applying to the registration of these tenancies should be the same as those applying to properties they own.
On head 25, there was a good deal of discussion in arriving at the numbers mentioned. Numbers above and below them were considered. This is an immediate response to a particular problem which we are trying to avoid happening again, but, by the same token, we do not consider the matter closed. We will deal with it in the strategy. We do not want to see properties in the rental sector being sold to avoid that sector shrinking. We do not want to see people losing their homes. There are issues with the removal of a right to terminate a tenancy in order to sell a property. There are property ownership issues in that regard and we are seeking legal advice on the matter. We think the way it is phrased is appropriate for the moment, but we may look at it again in the strategy. Linked with this, the greatest risk of the termination of tenancies lies with landlords who own single units.
With respect to data for those in mortgage arrears, the vast majority are landlords with a small number of properties. That is the issue about which we need to think. More than 85% of tenancy agreements are with landlords who own one or two properties. To respond to the questions raised about the changes to the procedures of the Residential Tenancies Board, the aim in reducing the notice period for appeals, the number of people on tribunals and trying to speed up the process is very much to try to and stop landlords with a single unit or two units from being forced into insolvency. Once a dispute starts and a decision is appealed to the Residential Tenancies Board, in all cases the tenancy cannot be terminated. In a number of cases the rent is not paid, which can push many landlords over the edge into insolvency. The issues involved are very much connected. Again, this is something with which we need to deal. How do we deal with the problem of landlords who are over-leveraged?
On head 26 and whether the condition on the removal of the probation period at the beginning of a Part 4 tenancy applies to approved housing bodies, my understanding is that it does not.
To respond to Senator Jennifer Murnane O'Connor's question on the regulations covering notice periods, the periods are laid down and depend on the length of a tenancy. If notice is not given, a tenant has the right to raise the issue with the Residential Tenancies Board.
On the point raised by Threshold about head 28 and how the deposit scheme will be more effective in speeding up the processes involved, that is probably true, but from the information from it, the greatest number of cases referred to the Residential Tenancies Board concern invalid notice and rent arrears, while deposit retention is No. 3 on the list. It is significant, but there are other issues that occupy much of the board capacity and resources.
The consultation process will be launched later this month and extend for a period of about two weeks. We would welcome inputs and submissions from Threshold and other organisations, as well as committee members.
Ms Lisa Clifford:
I will be extremely brief. On the point about the balance sheet, it is not the only place from where the money comes. It is not lending directly by the State; the position is that it is the entity that is being loaned to and universities are outside general government procedures. For that reason, that lending would be off-balance sheet.
On a point of clarification, many good landlords have come to see me in my clinic. They work well with their tenants. It is important that we say this does not happen to everybody, but it does happen to some. I reiterate that there are good landlords who are very helpful to their tenants and it is good to give them a compliment. However, we have to sort out the ones who are not.
Mr. David Walsh:
There is no block. In many cases, if a local authority or an approved housing body picks up a property in which a tenant is residing and if he or she qualifies for social housing or rent supplement, it can leave him or her in place. In many cases, however, people would be above the threshold and, therefore, not eligible. It is, therefore, a problem where somebody does not qualify for social housing or rent supplement.
To be helpful - it is important to the committee's work - we ask the officials to engage with local authorities to determine the number of such properties being transferred with tenants in situand obtain explanations from them in cases where this is not happening? We could readdress that issue at a future stage.
Mr. David Walsh:
I am conscious of the time, but I thank members for their views. As the Minister signalled a number of weeks ago when he appeared before the committee, this is a Bill with small elements that we in the Department see as urgently needed, ideally to be enacted as soon as possible, to deal with planning issues, as well as to provide other enabling measures. We recognise that, in the context of the wider rental strategy and other aspects under the five pillars, further legislative amendments will be required and they will come through in due course.
We have a planning Bill which is slowly making its way through the system. There may well be opportunities to have issues that are not directly related to the provisions here considered through committee amendments. The Minister also signalled that if reasonable amendments were proposed that added value to the Bill, as drafted, he would be willing to consider them throughout the process.
We are working flat out to get from a general scheme to a published Bill. We hope, with a tailwind, to have the work substantially delivered this month. The committee's decision on whether to have a formal scrutiny process will largely determine whether the Bill is published and potentially enacted this side of Christmas or whether publication will be pushed into the early part of next year. We appreciate this opportunity and if there questions that we have not been able to answer, I will be pleased to submit answers to the clerk and Chairman.
Dr. Aideen Hayden:
I am conscious that we did not respond to an important question asked by Senator Boyhan on the role of local authorities when a tenant overholds because alternative accommodation is not available. Our services regularly encounter such cases. I will ask Mr. O'Sullivan to respond to the question.
Mr. Diarmaid O'Sullivan:
We propose that a protocol be put in place to address this matter. We propose that where a case involving a tenant overholding comes before the Private Residential Tenancies Board, the PRTB will alert the local authority that the tenant is overholding for the legitimate and genuine reason that he or she cannot find alternative accommodation. Some responsibility or obligation would be placed on the local authority to assist the individual or family in question to find alternative accommodation. The preventive approach is what is behind this suggestion. When support is not provided to families or individuals experiencing this type of scenario, there is every chance they will come through the door of the local authority presenting as homeless in any case.
If such a protocol were put in place, there would at least be a chance of finding a solution to the problem in which the family finds themselves. It must be acknowledged, however, that the proposal is not without its challenges, especially as local authorities are finding it extremely difficult to find alternative accommodation for persons whose tenancy under the residential accommodation scheme has collapsed. While the proposed protocol is not without its challenges, it could certainly go some way towards preventing homelessness in circumstances where tenants are overholding and may have been ordered to vacate a property on foot of a decision by the Private Residential Tenancies Board.
I thank the Department and its officials for appearing before the joint committee. I also thank Dr. Aideen Hayden and Mr. Diarmuid O'Sullivan from Threshold for their attendance and for being so flexible with their time. I am sure we will see all the witnesses again in the near future. I ask members to remain as it is proposed to discuss some business in private session.