John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I thank the Deputies who spoke and Deputy Wallace for introducing his Bill. As the Minister of State, Deputy English, said earlier, while the Government has some differences of opinion and emphasis, it is remarkable that the Government's position on the levy, and its establishment, has been echoed by all those who spoke on the Bill. There is a significant difference in terms of scale of the levy but I welcome this opportunity to have a discussion on it. As most Members said, the value of land is a very significant component in the cost of house production, whether it is public or private. As land is a finite resource, there is an unquestionable public interest in ensuring it is efficiently used, particularly in urban areas but also in rural areas.

As the Minister of State, Deputy English, indicated the vacant site levy was introduced in 2015 with the aim of incentivising the development of vacant and under-utilised sites in urban areas for both housing and regeneration purposes. As a Government, we are open to ensuring that the levy continues to be an effective land management tool. While the levy has been levied since this year, it will not be payable until 1 January next year. It would be fair to say, therefore, that its impact would be difficult to measure now but from speaking to a number of local authorities that have put together a register, there has been activity in terms of ownership, planning applications and inquiries about planning applications on sites that are included on the vacant site register.

The Minister of State, Deputy English, has brought through the other House a number of reforms by way of amendments to the original 2015 Act to strengthen some of its key provisions that he outlined earlier. I would have a naturally more hesitant way of approaching some of these issues, but with respect to Deputy Wallace's provision of a 25% levy, most of people to whom I have spoken in the legal profession would say it is in contravention of Article 43 of the Constitution. The Government's role cannot be to put forward legislation it believes to be unconstitutional. Through the levy's introduction in 2015 and on foot of it becoming payable from 1 January next year, we will have a standard with which to compare activity in the housing market and the impact the levy is having on it in Dublin and right across the country.

On the amendments that were recently brought through the Seanad by the Minister of State, Deputy English, there was much discussion in the agricultural community around the definition of vacant and idle lands for the purpose of the vacant site levy. Many family farmers who had operated lands for agricultural purposes before the land was ever zoned, and who never sought for the land to be rezoned, were deemed to be liable for the vacant site levy despite the fact that most people's definition of vacant and idle would not include an active family farm. By differentiating between lands that were purchased following a zoning change to residential, and lands that were long held and operated as family farms, the proposed amendment will target developers or speculators who hoard zoned, serviced land that has been zoned for residential use. It would allow farmers who have operated their farm for a number of years prior to its rezoning from agricultural to residential, to continue to operate that farm without liability for the levy. It is important to point out that if those same farmers wish the land to remain zoned for residential purposes it would fall liable to the levy into the future. It should not, however, be used and it was never designed to be used, as an instrument to remove families from farms they have farmed for generations.

I particularly welcome the balanced and targeted amendment brought in by the Minister of State, Deputy English, which brings clarification to the specific point of implementation of the levy, along with the other amendments which further strengthen the levy provisions. In response to some of Deputy Wallace’s points, the Government’s amendments include proposals to increase the levy to 7%, to remove the application of reduced rates, to strengthen the Ministers regulating powers generally, and to provide that the Minister can change the levy rate, within the 7% ceiling, by regulation to enable the levy rate to be varied to respond promptly to future changes. These were matters that Deputy Wallace wanted to see addressed, and we are doing that in a reasonable and legally sound way.

I must echo the Minister of State, Deputy English’s comments regarding serious concerns of a legal and constitutional nature about how this Private Members' Bill proposes to address these issues in a way that exposes the legislation to the likelihood of a legal challenge, which could undermine the entire concept and progress of a vacant site levy.

Many Members have referred to compulsory purchase. This Private Members' Bill proposes to facilitate the purchase of vacant sites deemed suitable for housing purposes from site owners for not more than 60% or 40% of their market value in specific circumstances. There is already a range of State bodies and agencies that have existing compulsory purchase powers for a variety of functions. These powers are important instruments in facilitating public interest objectives in regard to housing, transport and other areas. It is fair to say that the existing rules around compulsory purchase often lead to a very cumbersome process that becomes legally embedded in the courts process, which is also a very expensive process. Many local authorities and other agencies are reluctant to go down that route. This is why the Government recently asked the Law Reform Commission to conduct a review - the commission has commenced the project - on how best to reform and update the law and procedures around the compulsory acquisition of land. The outcomes of this review will be considered fully and speedily by the Government. There is much agreement that the current system of compulsory acquisition belongs to a different era.

In addition, and as referred to by Deputy Wallace, against the backdrop of the national planning framework, it is proposed to establish a national regeneration and development agency to assist in ensuring a more effective approach to strategic land management, particularly in terms of publicly owned land. The establishment of this agency was one of the main recommendations in the national planning framework and is endorsed in National Economic and Social Council's recent report, Urban Development Land, Housing and Infrastructure: Fixing Ireland’s Broken System, to disrupt the current land market and make better use of State controlled lands to shape the development and revitalisation of our cities, towns and villages. The agency will work with and support local authorities, public bodies and others to harness public lands to stimulate regeneration and achieve compact, sustainable growth, with a particular emphasis on regeneration projects and the provision of affordable housing. Detailed arrangements for the establishment of the agency are currently being developed and are expected to be finalised shortly.

I will now return to the levy itself. We first need to introduce the Government amendments proposed, and I look for the support of the House in this regard, and then focus on implementation in a clear, consistent and proactive way. Under the 2015 Act, planning authorities are required to establish a register of vacant sites in their areas, beginning in January 2017, and to apply the levy in January 2019. On foot of a recent review by my Department of the online vacant site registers across all local authority areas, I understand that 14 authorities have populated their vacant site registers to date, collectively amounting to more than 230 individual sites, and the majority of these will be subject to the levy in January 2019. There are 17 other local authorities that have not yet populated the register. Those local authorities have members from different groups in the House and they should really get down to it. Most of the local authorities are involved in that work but they have not yet produced a populated register. They really need to do this.

The implementation of the levy is an ongoing process and it is expected that further sites, both in public and private ownership, are being added to the registers as these authorities and others continue their assessment of suitable sites and undertake the necessary preparatory work and procedures set out in legislation prior to putting the sites on the register. My Department actively engages with local authorities in relation to the levy implementation by providing guidance and organising information seminars. Most recently, in May, a workshop was held with all 31 local authorities to assess progress generally, to facilitate a sharing of best practice among authorities and to ensure consistent application of the levy across local authority areas.

We will continue to monitor implementation of the levy to ensure that it is being fully used, in line with its intended purpose of incentivising the development of vacant or under-utilised sites in urban areas. Further guidance and clarification can be provided to planning authorities, on foot of the introduction of the proposed Government reforms.

Despite some of the concerns expressed by the Minister of State, Deputy English, and me, the Government has addressed some of the concerns in its most recent amendments, as introduced by the Minister of State, Deputy English, and we do not intend to oppose the Bill at this Stage.

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