Gerald Nash (Louth, Labour) | Oireachtas source

I welcome the opportunity to speak on Deputy Eoin Ó Broin’s Bill. Before I go into the meat of this, it is important that we reflect a little on the history and, indeed, performance in practical terms of the Part V provision since it was introduced over 20 years ago.

The Minister of State touched on it briefly, to a point, in his contribution.

I was a member of a local authority at the time, as were many colleagues across the House. It was, as Deputies will recall, introduced by one of the Minister's predecessors, Mr. Noel Dempsey. I recall remarking in the council chambers of the two local authorities of which I was a member, Drogheda Corporation, as it was then, and Louth County Council, that this initiative was novel, far-sighted to a degree, innovative and useful once it complemented the public homebuilding programmes that were in place at the time. I warned that it should not be designed to replace local authority provision.

Members will recall that, further down the line, the provisions were then watered down by one of Mr. Dempsey's ministerial successors, Mr. Martin Cullen. In my view, Mr. Cullen butchered Part V when he enabled developers to donate land elsewhere or pay an equivalent sum to the local authority. There was no longer a requirement to build physical units. Part V was full of holes and there were so many get-out clauses as a result of those changes that little or nothing was delivered. Modest homes became grossly unaffordable in the early and mid-2000s, poorly regulated banks loaned money like it was going out of fashion and we know to our cost where this ended up.

Part V, more generally, failed in its main objective, which was to provide a balanced mix of social and affordable homes in private housing developments. In 2015, the journalist, Mick Clifford, wrote:

What resulted was, more or less, a disintegration of the original policy. Many local authorities accepted less than market value as the money in lieu, and, as was inevitable, the money wasn’t always ringfenced for the purpose for which it was collected. Less than 4% of the 400,000 homes built between 2002 and 2011 were for social housing. The market triumphed, developers were allowed to proceed unfettered by any considerations for society at large.

That is a fair assessment.

The Minister of State mentioned changes to the Part V regime introduced in 2015 by my colleague, Deputy Kelly. He did so without providing any context for those decisions and the framework within which they were made. The Minister of State's officials will be only too well aware of the circumstances that pertained at the time and the ambition of the changes that were introduced. In 2015, when the then real-world problems, if I can describe them as such, with Part V were corrected to enable homes to be built, there was no shortage of affordable housing, nor was the State in a position to underwrite the delivery of affordable homes only a matter of months after we waved goodbye to the troika. In addition, there was no shortage of social housing. The aim of the 2015 amendments was to get 10% of units built - end of story. As I hope the Minister of State will agree, 10% of something is preferable to 20% of a unicorn. Nothing was happening at the time. Context, I hope the Minister of State will concede, is everything and we were at a particular point in time. Those changes were important in that they removed the ability of developers to account for their social housing commitments through cash payments to local authorities.

Deputy Ó Broin will know that things change. That is reflected in the fact that he proposed a Bill in 2016 to provide for 25% social units under Part V and 30% social units in strategic development zones. However, things have changed since, as reflected in this commendable attempt to address the deficiency in the legislation the Minister brought forward and the amendments he made in July.

The recorded defence of the Minister, Deputy Darragh O'Brien, is that this Bill and what it seeks to do are in conflict with the Constitution. However, that defence does not survive the merest of scrutiny. Going back to the initial iteration of Part V, if the land in question had been purchased by the applicant before the date on which the 2000 Act was published as a Bill, the applicant was to be paid the greater of either the original purchase price plus interest or its existing use value. If the land had been purchased after that date, the applicant was to be paid only its existing use value.

As the House will be aware, the Planning and Development Bill 1999 was referred to the Supreme Court by the President under Article 26 of the Constitution and the Supreme Court upheld its constitutionality. The following points are important to note. According to the court:

The objectives sought to be achieved by Part V of the Bill are clear: to enable people of relatively moderate means or suffering from some form of social or economic handicap to buy their own homes in an economic climate where housing costs and average incomes make that difficult and to encourage integrated housing development so as to avoid the creation of large scale housing developments confined to people in the lower income groups.

It can scarcely be disputed that it was within the competence of the Oireachtas to decide that the achievement of these objectives would be socially just and required by the common good. It is accepted on behalf of the State that the use of planning legislation, which has traditionally been concerned with the orderly and beneficial planning and development of the physical environment, for a purely social objective of this nature is novel and even radical. The court is satisfied, however, that it is an objective which it was entirely within the competence of the Oireachtas to decide to attain, as best it could, by the use of planning machinery. The essential question for resolution, in the context of Article 40 and Article 43, is whether the means employed constitute an unjust attack on property rights.

In considering whether this restriction on property rights was permitted by the Constitution, the court applied the test of proportionality. The Supreme Court concluded that the provisions of Part V were "rationally connected to an objective of sufficient importance to warrant interference with a constitutionally protected right and, given the serious social problems which they are designed to meet, they undoubtedly relate to concerns which, in a free and democratic society, should be regarded as pressing and substantial." It continued: "At the same time, the court is satisfied that they impair those rights as little as possible and their effects on those rights are proportionate to the objectives sought to be attained." There can be no doubt, accordingly, but that the principle of land transfer at current use value for the provision of social and affordable housing has already withstood the most detailed constitutional scrutiny at the highest level.

According to newspaper reports, the Minister made the decision for the exemption that is the subject matter of this debate from the 20% requirement on foot of "very strong advice from the department". It is notable that the Minister did not refer in the media contribution to legal advice from the Office of the Attorney General. He stated instead that the advice was from senior officials and that it was to the effect that developers may have bought such land on the understanding that there was a 10% provision for Part V housing and that may have been built into the cost and the future cost of the development of that site. However, no commencement order has yet been made by the Minister in respect of Part 6 of the Affordable Housing Act 2021 giving effect to the amendments that were made in July where those various amendments to Part V have been made. In other words, the amendments do not yet have the force of law.

It seems the Minister and the Department will take advice from developers when they express unproven concerns over an escalation of costs. In contrast, the Minister does not seem to be able to take the objective advice of civil servants, for example, in the Department of Public Expenditure and Reform, and economists in the Economic and Social Research Institute, ESRI, when they warn that poorly targeted and expensive schemes, such as the help-to-buy scheme, that end up adding significantly to the cost of homes for first-time buyers ought to be reconsidered as well. There is a real variance there and a real gap and the common thread is developers.

The amendment the Minister introduced in July tells me that he is being led and said by developers. It is not too late to do a U-turn, a volte-faceif I can call it that. As I stated, the amendments introduced in July have not yet been brought into force.

While I am pleased the Government has decided it will not oppose this Bill, it has not stated it will support it. This is the point. The Labour Party supports this legislation. We think it is positive and can undo a mistake the Minister made with his amendments in July. I would ask the Minister of State to consider that with his Government colleagues.

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