Dáil debates

Tuesday, 21 September 2021

Planning and Development (Amendment) (20 per cent Provision of Social and Affordable Housing) Bill 2021: Second Stage [Private Members]

 

7:45 pm

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats) | Oireachtas source

I welcome the Bill, which the Social Democrats will support, and thank Deputy Ó Broin for introducing it.

People who are struggling to pay rents and looking to buy an affordable home are wondering why on earth the Government has granted this exemption when we need more affordable homes now. That we will miss out on thousands more affordable homes due to this exemption is not acceptable to people who are looking for the security and peace of mind they would have if they were able buy one of the affordable homes we will now miss out on.

It is welcome that the Government will share the Housing Agency review. It would have been useful to have had it before discussing the Bill so that we could scrutinise it. The Minister of State remarked that the Government had no issue with the provisions of the Affordable Housing Act being subject to further economic analysis and scrutiny. That was an interesting way of putting it, given that this Bill has been introduced because the Government's amendment No. 91 to the Act was made without any debate, scrutiny or analysis. Three hours and 15 minutes is what the Government allowed for Committee and Remaining Stages on that Act when it was before the Dáil. We never got anywhere near amendment No. 91. At three hours and 15 minutes, it was not possible and the amendment was voted through without any discussion. This is the first discussion that amendment No. 91 to the Affordable Housing Act has had in the Dáil. What analysis and discussion was it subject to? There was certainly no public analysis or discussion. That is one of the key problems in this situation.

It is welcome that the Government is not opposing the Bill, but that does not tally with comments made by a spokesperson for the Minister for Housing, Local Government and Heritage in the Business Postat the weekend that the Bill was unconstitutional. The Government does not seem to be saying that it is unconstitutional this evening. Does that mean that the comments made on behalf of the Minister no longer stand? It would be useful to know.

Just three hours and 15 minutes were allocated to Committee and Remaining Stages, but when one examines documents released under freedom of information, FOI, requests about lobbying of the Minister by developers on that legislation, it is on the public record that much more time was given to hearing the views of developers in the run-up to the Act than was afforded the representatives elected on behalf of the people of Ireland. That is something on which the Government should reflect.

Lobbying by developers has been mentioned by other Deputies, who also referenced last weekend's Business Post article and the documents released under FOI. This issue is key. In the Minister of State's comments, he echoed some of the language used by developers seen in the documents released under FOI, for example, "margins of viability". That is interesting language. Every time developers look for a change in housing or planning matters, they talk about viability. When it came to the legislation on build to rent, they talked about viability. When it came to co-living, which, thankfully, is gone, they talked about viability. When it came to the so-called fast-track strategic housing development legislation, they talked about viability. Whenever they look for a reduction in standards, they talk about viability. It is the same trick each time, and each time that argument is fallen for.

In a paper, Dr. Mick Lennon of UCD and Dr. Richard Waldron of Queen's University Belfast examined the strategic housing development legislation. They interviewed politicians as well as lobbyists who were working for Property Industry Ireland and other lobbying organisations. They went through the whole process of lobbying and how it influenced legislation. They were told by one of the lobbyists from Property Industry Ireland that that group had given suggestions and recommendations to the then Minister, Deputy Coveney, on the introduction of the strategic housing development process, which were stuck into the legislation "lock, stock and barrel". As far as I am aware, that has never been disputed by anyone. If it was not the case, then it would be useful if someone disputed it. The paper is good-quality academic research and is not disputed by anyone.

We know from records released under FOI that one of the arguments made during lobbying had to do with the effect that increasing Part V contributions would have on planning gains on land value, that is, the windfall gain that developers make as a result of public actions that increase the value of land, for example, rezoning or other planning decisions, putting infrastructure in place or long-term leases agreed by local authorities and backed up by the State. Lobbyists were raising concerns about the effect of such measures on planning gains. I will cite an example from my constituency that has been reported on well by the Dublin Inquirer, that of the former Chivers factory site. From its research, the Dublin Inquirerestimates that, in the past three years, there has been a tenfold increase in the site's value because of rezonings, planning permissions secured and long-term leases agreed in principle with Dublin City Council. When we discuss the potential costs to developers or landowners in terms of effects on land value gains, that is the context. Some of them are looking at a tenfold increase in the space of three years. Are we really saying with a straight face, looking the public in the eye, that we will not introduce a measure that is needed now just because it might affect some of that land value gain? Are we afraid to do that? Do we believe doing this would affect viability?

I wish to make a key point on viability. We have some of the highest house prices and rents in the EU. According to the Turner & Townsend survey data, we have average building material costs compared to comparable northern European countries with similar economies and climates. Our labour costs are a little below average and our professional fees are coming in at the average. How is it that we have the significant viability issue that the industry is always talking about? We have some of the best returns. The yields on investment in residential property are higher in Ireland than elsewhere. They are 5% plus whereas the norm in Europe is 3.5%. We have higher yields, higher returns, higher rents, higher house prices and larger profits because of a speculative, high-risk model. We have higher financing costs as a result of our highly speculative model, and that needs to change, but how is it that viability is always an issue? How is it that the answer to viability is not tackling the high-risk, speculative and high financing cost model that we have? How is it that the answer is always to reduce our aims and ambitions, give people lower standards and so forth?

Deputy Nash touched on the Supreme Court decision relating to Part V in which many of these matters were settled. The judgment was very clear. In the Supreme Court decision on what was then the Planning and Development Bill 1999, which, similar to the measures under discussion, would allow for Part V contributions of up to 20%, Chief Justice Keane stated: "Every person who acquires or inherits land takes it subject to any restrictions which the general law of planning imposes on the use of the property in the public interest." He went on to cite a previous case: "'The purchase of land for development purposes is manifestly a major example of a speculative or risk commercial enterprise.'" Of course people know that, when they buy or inherit land, the Government can quite rightly introduce planning measures and so on that will affect it. The Supreme Court has ruled on this matter. We know that, as a result, the exemption was not necessary. We know that the Government caved to pressure after lobbying from developers. That is what needs to change.

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