Thursday, 22 September 2022
Tailte Éireann Bill 2022: Second Stage
Cian O'Callaghan (Dublin Bay North, Social Democrats)
I have two specific points to make about this legislation. We support and welcome this Bill although it is alarming to see how long it has taken to get through the process. That certainly is an eye-opener. It has taken the best part of ten years. There was an expectation in 2015 that it would progress at that point. That shows the length of time involved. I thank the Minister of State for thanking the joint committee for its work on pre-legislative scrutiny of the Bill. It is great to get that feedback from him. We would love to see him taking on our recommendations, especially when we are careful to make only a few recommendations. On the Bill, we made only two recommendations. That was all. I would even have been happy if the Minister of State had decided to support any sort of majority of those recommendations.
The transfer of the Property Services Regulatory Authority from the Department of Justice is needed. When I brought forward my Bill on the land price register, which aims to solve a lot of problems in the housing area, the Department of Justice dealt with it and you could see from the Minister and her officials - and this is not the fault of any of them - that solving the housing situation was not their primary responsibility. The intent of the legislation I brought forward, solving the housing situation, is not the primary interest of the Department of Justice. In advancing these matters, it is important that they fall under the right Department's remit. The Property Services Regulatory Authority has a particular remit with regard to the housing situation but the Department of Justice, which holds it, does not have the same incentive or motivation to advance things on that front.
The second register related to a land price register. There is some explanation from the Department as to the thinking behind not doing this in the Bill digest prepared by the Library and Research Service. The Department communicated that a national zoned housing land register was being established and that this was the reason a land price register would not be created. However, while a national zoned housing land register is welcome, it is a very different thing from a land price register. We need a land price register. It would give us some very specific detailed information that we need to ensure transparency around land prices. In terms of the housing crisis, it is highly regrettable that the Government voted down my Property Services (Land Price Register) Bill 2021 earlier this year. I would have been very happy to work with the Government to improve the Bill through amendments to deal with any deficiencies it saw in it.
We need a land price register to create transparency around land prices and developers' margins. We do not actually know what is going on in terms of housing affordability and construction costs. The Government has been lobbied continuously to make changes in the areas of housing and planning over recent years and it has brought in a number of changes to policy in these areas. However, it is reasonable to say that the promises the lobbyists made with regard to housing affordability and extra housing supply on foot of those changes have not come to fruition. In many ways, the opposite has happened. A key part of the justification lobbyists for those changes have used has been arguments relating to viability. They say that housing or specific types of construction are not viable and that the Government needs to make certain changes to make it so. I mention this in the context of the land price register because we cannot independently scrutinise and analyse arguments on construction costs and viability if we do not know the price of land. That is a key element. We cannot properly and independently scrutinise and analyse the various proposals put forward by lobbyists and developers for changes to housing and planning policy - many of which have been adopted - and their arguments around viability if we do not know what is going on with land. We need that clear data. We have such data on labour costs, building materials and professional fees but, without knowing what developers are paying for land, we cannot independently assess those proposals and arguments. This is very important with regard to tackling the cost of delivering the development of land for housing. The cost of development land is one of the key factors in the construction of housing. A land price register would fill this gap.
It would also provide us with important data to allow us to design effective policies to tackle land hoarding and speculation. According to the Government, we have 8,000 ha of zoned land sitting unused. That is enough land to build 250,000 homes. Not having proper data on what is going on with land transactions is inhibiting our ability to develop effective policies in that area.
Yes, it would be useful to get a better explanation as to why a land price register is not included in the provisions of the Bill but I urge the Government to change its mind on this and make provision for such a register. I will be bringing forward a number of amendments in that regard. It is legitimate to ask, given how important land is in terms of housing construction and affordability, why the Government seems to be okay with not knowing what is going on with land prices and transactions. It is quite incredible in the context of the disaster we are facing. We have the highest ever house prices and rents in the country and the largest ever number of people living in homelessness. I have people, especially young people and those in their early 30s, telling me that the only way they feel they will ever be able to afford to live and to move out of their parents' home is if they leave the country. That is the situation we are facing. People with lots of the skills we need in our education and healthcare systems, disability services and every other section of the economy and society are leaving. Indeed, we are losing people with the skills in housing construction that we desperately need. I urge the Government to take a change of approach on this matter.
The second issue I want to raise regarding Tailte Éireann and the merging of the three offices and their functions relates specifically to the role of the Valuation Office. I will give an example to illustrate my point. The office needs to be closed and I will be looking to bring forward an amendment to that end. The example of the issue I am raising is from my constituency but it applies to lots of other parts of Dublin and elsewhere around the country. There is an area in my constituency called Clongriffin, much of which was built ten to 15 years ago. It includes a lot of empty commercial space and vacant commercial units. In fact, more than 50% of the ground-floor units in this large new townland have never been occupied. They have been left as shell units, which gives the area a vacant, unfinished feel and means the community has not been able fully to solidify. There is a revenue loss arising from the lack of commercial rates being brought in, a social cost for the community, a cost to the local businesses as a consequence of reduced footfall and an opportunity cost arising from having buildings empty that should be used for commercial or community purposes. Leaving those buildings vacant in the middle of a housing crisis is absolutely scandalous.
What does this have to do with the Valuation Office? It has everything to do with it because these commercial units that have been empty, some for 15 years, have never been valued for commercial rates by that office. Dublin City Council does not apply 100% commercial rates exemptions for empty units. If a commercial unit is empty, the council, like other local authorities, charges a certain percentage of rates, which has gone up in recent years. Again, this is also the case in local authorities elsewhere. The purpose of this is to discourage commercial vacancy but those partial rates are not being applied to any of the units to which I referred because they have never been valued by the Valuation Office.
Other Deputies have talked about delays in some of the other functions being merged into Tailte Éireann but there is a huge cost to having commercial units that have never been rated, after ten or 15 years, by the Valuation Office. I want to see this deep flaw being rectified in the setting up of the new amalgamated body. There should be some provision such that within a year or two of a unit being substantially completed, it will be valued for commercial rates. We cannot have a situation where because a unit is not fully fitted out, it is somehow therefore exempt for a decade, 15 years or indefinitely. That could well be a loophole that may be used with the argument that a unit is not fully completed. Ten or 15 years on, that is not acceptable. At what point does a community have a right to expect that the commercial buildings in the locality will be occupied? To put it in human terms, many of the people who moved into Clongriffin 15 years ago were couples who had no children at the time but went on to start families. Those children are now 12, 13, 14 and 15 years of age. Will we have to wait another ten or 15 years, until they are adults and able to move out, before the community begins to settle? As I said, this is an example from my constituency but it applies to newer developments in many other areas. I will be bringing forward amendments on this but I urge the Minister of State to consider the issue and to look favourably at those amendments.
This Bill is welcome and it is good that it has cross-party support. However, we must consider whether we can strengthen it to ensure Tailte Éireann is able to fulfil the maximum role it can in helping to combat vacancy and to alleviate the housing crisis by way of the provision of land price data and transparency around that.