Thursday, 27 September 2018
Ceisteanna Eile - Other Questions
Land Development Agency
11. To ask the Minister for Housing, Planning, and Local Government when he expects legislation to be introduced on the Land Development Agency, LDA; the number of staff the agency currently employs; if the position of CEO of the agency was advertised; and if he will make a statement on the matter. [39097/18]
When does the Minister expect legislation relating to the Land Development Agency to be brought before the House? How many staff does the agency currently employ? Was the position of CEO of the agency advertised? The Minister stated that the LDA will enable the Government to address traditional volatility in land prices as a result of speculation. I ask him to outline how that will be done. Is the Government planning to bring in separate legislation to complement the LDA, such as a tax on unused land? If not, I fail to see how bundling together public land and allowing developers to build on it will address volatility and speculation.
Together with the Minister for Finance and Public Expenditure and Reform, Deputy Donohoe, I signed the establishment order for the Land Development Agency, LDA, on 13 September 2018. It will act as a new commercial State body to actively manage the development of public lands. The establishment order is an initial and enabling measure to get the LDA up and running as quickly as possible, ahead of the provision of a more comprehensive primary legislative basis for the agency and its intended scope of powers and operations. Work is already under way on this legislation and I expect to have the general scheme of the Bill ready for submission to the Government in early November. This will seek approval for the detailed drafting of the legislation which will then be taken forward urgently so that a Bill can be published and brought before the Houses as early as possible in the new year, with the aim of securing enactment of the legislation by Easter 2019.
The LDA has been established with three staff members initially, rising to five in the coming weeks and increasing progressively thereafter, in line with a business plan and the expansion of its development lands portfolio. As is common in agency start-ups of this kind, I have appointed a chief executive on an interim basis. The filling of this position on a permanent basis will be subject to open competition and advertisement upon enactment of the primary legislation for the agency.
I thank the Minister for his reply. As he is aware, I believe that the LDA will hand control of the supply of housing to a few elite entities, such as developers and investors, rather than it being under the control of the Government or builders. That is not the right way to move forward.
I am mystified as to how it was decided to appoint a former NAMA chief financial officer as CEO of the LDA. What expertise does he have in residential delivery?
We are giving up public land and allowing financiers to speculate on it for profit and private builders to build on it for profit. One cannot expect that the private units in such schemes will be affordable. I have introduced legislation proposing an increase in the vacant site levy to 25% and the removal of many of the exemptions that currently apply. It is awaiting a money message from the Department of Public Expenditure and Reform before Committee Stage may begin. If the Government wishes to address land volatility and speculation, it must support that Bill. Does the Minister agree with a 25% tax on landbanking?
I thank the Deputy for his reply. I will not mention any individual who does not have the right to come to the House to defend himself or herself.
The Land Development Agency is the developer. It is a public developer. It will guarantee an uplift from all the work it will put into the land in terms of preparing master plans for sites, obtaining planning permission, seeking procurement, buying sites before they are zoned for residential use and taking on board the ten to 15 year time horizon to ensure we are providing homes in the right places for the next 15 to 20 years and will avoid a crisis such as the two we experienced in the past two decades. It will take that uplift and put it back into affordability in these homes. The State will develop housing. In certain cases, it will sell land under licence. It will progress development according to a timeline and ensure that houses are built on public land for the general public. It will provide social houses, subsidised houses and other houses for the public. That is a good thing to do, in particular on very desirable sites such as that in Dundrum. Everyone should have the right to be able to buy a house on such a site and that is what we are trying to achieve with the Land Development Agency. It has not been done before.
On the vacant site levy, I more than doubled that levy when I came into office. It will be at 10% over two years and 7% every year thereafter. If the owner of a vacant site does not develop it, the levy will rise very quickly and be very punitive. Although the increase we have put in place is not yet in effect, we have seen examples of it being a factor in vacant sites being brought into delivery.
Land site cost per unit is currently increasing by approximately 25% per annum. Even if the 7% vacant site levy put forward by the Minister applied to all developers sitting on landbanks, it would not bother them. However, because of all the exemptions it contains, very few developers will have to pay it.
The Government stated that the LDA is based on best practice in European countries such as Germany. However, that is not the case. Under German planning law, the value of land is frozen when the local municipality specifies the area for residential construction. If that was done here, there would be no room for all the lobbyists who would come to the Oireachtas. Will the Government freeze the value of land when it is zoned for residential development? I will believe it when I see it.
It is incredible that the Minister states that the LDA will provide affordable housing. As he stated, 60% of those houses will be sold for private use. We will be lucky if the price of such houses starts at €320,000. For the majority of people in Ireland, that is not affordable housing. Why does the State not build those houses?
Just because we refer to an affordable scheme does not imply that the other houses sold on a site will not be affordable. It is probably more correct to say that they are subsidised housing. It depends on the location of the land brought forward for development. It is possible that none of this land would be developed for housing if we had not brought in the Land Development Agency and a requirement that other Ministers bring forward their entire portfolio of landbanks in order that we can examine them and determine the most efficient use of land. We will attempt to decant one site onto another and deliver housing where it is needed. That is what we are trying to achieve.
I am aware that Deputy Wallace has brought forward a Bill proposing a tax on vacant sites. Unfortunately, the Bill would not make it through the Houses because of several problems it contains. I more than doubled the vacant site levy when I came into office and we are seeing a positive impact from that. That levy will remain in place to ensure we get vacant sites developed. However, we also now have the Land Development Agency to potentially deliver 150,000 homes for the general public over the next 15 years on public land which might not otherwise have been developed. That is very important.