Thursday, 26 May 2022
Property Services (Land Price Register) Bill 2021: Second Stage [Private Members]
I move: "That the Bill be now read a Second Time."
I thank the Minister, Deputy McEntee, for attending this debate. I may not use the full 15 minutes afforded to me. I have heard people say that before and not necessarily stick to it, but I will do my best. I thank the people who contributed to the huge amount of work that went into drawing up this Bill. Paul Cassidy did the initial draft and Pádraig Rice did quite a lot of work on it. In addition, we had very comprehensive support from the Office of Parliamentary Legal Advisers, OPLA, which really is an excellent resource. Staff there put a huge amount of work into the Bill and I thank them for that. I am bringing this Bill forward in a constructive manner and, I hope, a helpful one. I hope the Government is able to respond positively to it in order that it may proceed to Committee Stage. I am hopeful the huge amount of work put in by the OPLA in drafting the Bill will help to see it progress. I look forward to working through any concerns the Minister might have on Committee Stage.
The Bill will play a small but significant part in helping to address the housing crisis we are facing, which is why I have brought it forward. It is substantial legislation that would help to create much-needed transparency around land transactions. While it is quite a technical Bill to amend the Property Services (Regulation) Act 2011, the issues around its provisions relating to land transactions are not technical. Indeed, they strike to the core of the devastating effect the housing emergency has had on families across Ireland. Rents have doubled over the past decade.
House prices have become ever more unaffordable and having risen by 15% are about to pass their Celtic tiger peak. Rents and house prices in Ireland, in Dublin especially, are among the highest in the European Union. Homelessness has skyrocketed - it increased by 22% in the last year alone. Rates of home ownership have fallen year after year. This is having a devastating effect on families.
I mention that because this Bill needs to be seen in the context of how it might address some of these issues in a small way. As we all know this from our constituency work and people we are trying to assist, it means that children are living in emergency accommodation, often hostels that are completely inappropriate sometimes with very poor standards, miles away from their schools and their friends. Their parents try to put a brave face on this and tell younger children that this is some sort of adventure to try and reduce the amount of trauma they are going through. They can only do that for a limited amount of time. Let us be very clear that our failure as a country to ensure that land is available at affordable prices for affordable housing has devastating consequences and the Bill aims to assist in that regard.
Issues with land ownership, control and costs have haunted Ireland for generations. If we are serious about tackling land hoarding, land speculation and land price inflation, we must have robust data on who is buying development land, how much they are paying for it and how long they are holding it for. There is a black hole of information in this regard in Ireland. Effective policy legislation needs to be informed by data and not by guesswork. Decisions on housing policy would be better if we had more robust data on it.
Ensuring that land for housing is available at affordable prices so that the housing is affordable is key to solving our current crisis. The Bill seeks to create a new land price and ownership database. The Bill would create a new publicly assessable and searchable electronic register that would capture and make freely available information on land transactions, including the date of sale, the location of the site, the zoning, the price paid and the ownership details. The Bill also broadens and updates the current residential property price register to include the size of property and ownership details where these properties are not a principal primary residence.
What difference will these measures make? If passed, the Bill would create transparency on land prices and give us some insight into developers' profit margins. When it comes to construction costs, we have precise data on labour costs, building materials and professional fees. However, without knowing the price developers pay for land, we cannot independently assess the breakdown of construction costs and developers' profit margins. This is extremely relevant to current concerns about measures to address construction viability.
The Bill will also help to tackle the cost of delivering housing. The cost of development land is one of the key reasons that housing in Ireland is so expensive. However, we lack independent data on land prices and the rate of land price inflation. It is a massive black hole. If we want to tackle the cost of land and implement effective policies to tackle land speculation, we need accurate data and a land price register would provide that.
Land hoarding and land speculation are two of the key causes of the housing crisis. According to the Government, 8,000 ha of zoned land is sitting unused. That is enough land to build 250,000 homes. A land price register would provide the data for setting a land hoarding tax at an effective level to help deal with that issue.
My next point goes across housing and all major areas of public policy where we need reform and solutions. While it is important to take immediate actions and while resources are often an issue, immediate responses and firefighting often in emergency situations are not enough. We must always have an eye to structural changes and reforms. That is as important with housing policy and land prices as anywhere else. Because we have been in such a crisis with housing in recent years, many of the measures and interventions have been in that firefighting and emergency mode rather than looking at structural reforms and changes that are needed.
I say this as constructively as I can. Some of the interventions in housing have had the effect of increasing land prices, increasing house prices and increasing rents. That has never been the intention, but it has happened. We have seen evidence of that with today's detailed analysis published by the ESRI and prepared by Dr. Barra Roantree and others which shows that some of the housing interventions were caught in this vicious circle of Government, for prudent reasons, not wanting to increase thresholds because it felt that would have an inflationary effect but then we see more and more people reliant on housing assistance payment, HAP, being completely priced out of the market.
I mention that because while these measures must be taken in the current crisis, they are not the long-term structural reforms we need to sort out the housing situation. Rather than creating upward pressures on rents and house prices, we need to implement policies and reforms that create some downward pressure. That is very much what is needed. More than €1 billion in State funding now goes into rent subsidies and long-term leasing which is a colossal amount even compared with a few years ago. However, those measures which are putting more money into the system and having upward pressure are only increasing. It is crucial for housing and land policy to have those long-term reforms. They need to be done now but will have a long-term effect. The number of newly built homes available to buy in Ireland is decreasing each year. Fewer than 6,000 newly built homes were available to purchase last year. We are seeing the effect of some of those policies and not having the structural reforms to make more land available at affordable prices for affordable housing.
To increase the supply of affordable homes, we should be looking at Vienna. Vienna has introduced affordable housing zoning to help ensure enough land is available for affordable homes with price caps and rent caps per square metre attached to the land. I have introduced the Bill in that spirit because the more data we have on land, the better equipped we will be to implement policies like that. My colleague, Councillor Catherine Stocker, in Dublin City Council has been spearheading the attempt to introduce zoning similar to the one in Vienna in the Dublin City Council area. We can take tangible action in the here and now to ensure that land is available at more affordable prices.
We owe it to people who are struggling to pay rents and who are being locked out of home ownership, and the almost 10,000 people who are now living in emergency accommodation to do everything we can on housing. The Bill is put forward as a small part of the solution and a small part of the structural reforms that are needed. There is no good reason for the Government to oppose the Bill. I hope the Government will agree to it moving on to the next Stage. I look forward to working through any concerns the Government might raise on Committee Stage.
I am aware of the standard procedure, but since only three speakers are offering, would it be acceptable to the Minister for Deputy Nash to contribute now? Rather than asking her to speak twice, she would be able to respond once to the debate. That seems to be a more practical approach. Is that acceptable to Deputy O'Callaghan?
I am delighted to speak in support of Deputy O'Callaghan's Bill. I believe it has considerable merit and addresses a yawning gap in the measurement of wealth in this country. All the evidence suggests that land, property and housing generally are inextricably linked to wealth inequality. We know from successive reports from the Central Bank and from various reputable think tanks that the vast bulk of wealth in this country is held in assets and most of those assets are property. That includes not just housing but also land.
As the saying goes, we can only manage what we measure. We do not adequately measure land wealth, the value of land transactions and how lands can be speculated upon and flipped, making people millionaires many times over and sometimes overnight. It is something in which our society must take a closer interest. The Bill aims to create transparency around land transactions to tackle land speculation and to address the hoarding of development land.
I bring the attention of the House to a Bill the Labour Party introduced last year, the Acquisition of Development Land (Assessment of Compensation) Bill 2021. The Minister may be familiar with this because what it sought to do was essentially to tackle the issue of land hoarding and speculation by finally implementing the recommendations of the famed Kenny report, capping the price of land and allowing local authorities to compulsorily purchase land at capped prices. That is something we hope the Oireachtas can further consider in greater detail in the next period of time.
This Bill will create a new publicly available electronic register to provide information on land prices, ownership, location, zoning and so on. In addition, it broadens and updates the current residential property price register to include the size of the property and ownership details where these properties are not a principal primary residence. The establishment, in the first instance, of the residential property price register a number of years ago was an important intervention. This Bill builds on that important intervention to give us more clarity about the nature of the property market and who owns what.
As I say, we welcome the Bill. I thank our colleague, Deputy Cian O'Callaghan, for the work he has put in. We support it and hope the Government will too. We hope the Government will not merely take the opportunity to sit back and wave it through because it would be useful if the Government would express practical support for it and organise for the Bill to be scrutinised on Committee Stage at some point soon. This is an important Bill and there is a necessity for the Government to respond to what is in it in the context of the housing crisis we are facing.
Transparency is something we, as a society, should always welcome. Where this relates to land prices, it is even more important given that land is such an important source of wealth, hidden wealth and generational wealth in this country. It is equally important that the information is provided independently, clearly and in such a way that the public, researchers, policymakers and legislators such as ourselves can have faith that it accurately represents the true position as it relates to land value and, thereafter, land costs in Ireland.
We are currently in the position that the Government, Opposition, researchers and, most importantly, members of the public are too often reliant on data and statistics produced by private organisations, surveys and research projects that may be initiated by private interests to see the reality of the housing crisis for renters, buyers and, in this case, developers. While the work of those organisations is often excellent and robust, and nobody is suggesting otherwise, it should not be needed. The State should be collecting this data, using it to guide policy and providing it freely and accessibly to everyone. This Bill seeks to do that with respect to land cost but we believe that similar measures must be taken in other areas of public policy, establishing easily searchable, accessible and independent data.
There is undoubtedly a problem across the country of land being purchased, planning permission sought and granted and land being sold on, often at a very significant profit, without anything actually being built on that land and only for the cycle to continue almost into perpetuity. That cannot be allowed to continue. We recognise that the Government has stated it will make some efforts to end this cycle through certain measures contained in Housing for All but further measures are needed, including those contained in this Bill. It is a modest and moderate Bill. It is not revolutionary. It is just asking the Government to do something simple and straightforward; something it should be doing in any case.
Construction and land costs are consistently cited as significant issues in delivering homes quickly and affordably. It is vital that we are able to track land prices and to be able to clearly see the profits that have been made from land, often with no homes to show for it, with a significant amount of money lining the pockets of those who purchase land and move it on.
The Labour Party is pleased to support this important piece of legislation. I pay credit to Deputy Cian O'Callaghan and the Social Democrats for developing this legislation. It is important and it arguably should have been done a long time ago. It is one of the missing pieces of the jigsaw that we are required to implement as we continue to tackle the housing crisis that is bedevilling our society.
I might not take all of my 20 minutes. I thank the Ceann Comhairle and Deputies Cian O'Callaghan and Nash. I am grateful for the opportunity to set out the Government's position on this Bill.
At the outset, I want to inform the House that the Government must oppose this Bill. I will set out the reasons for that. It is not because we do not support greater transparency with respect to commercial property transactions because we do. It is not that we do not want to deal with the issue of hoarding, land prices or anything like that because of course we do. The Bill would consider significant legal and practical difficulties, and I do not believe it is the suitable vehicle through which to try to achieve its stated aims. Even more importantly, I am concerned that this Private Members' Bill would also require extensive publication by the State of the personal details of private individuals who are involved in perfectly innocent and ordinary property transactions and have no involvement in land speculation or land hoarding. I will provide some concrete examples of these problems later.
The stated aims of the Bill are to create transparency around land transactions and that transparency is to tackle land speculation, unsustainable land price inflation and to address the hoarding of development land. The Bill seeks to achieve this aim by providing for publicly available registers of all transactions in residential or non-residential land or property. With regard to residential property, we already have a residential property price register which publishes online the sale prices of residential properties. The Bill would significantly expand the scope of that register to also cover gifts or inheritances of residential property. It would also significantly expand the content so that not just the sale price and the address of the property would be published, but also the name and address of the vendor and purchaser or in the case of a gift or inheritance, the donor or deceased person. The name and address of the person receiving or inheriting the residential property would also be published.
The Bill does provide a limited exception for a person's home. If a person involved in any of the ways I have mentioned in a residential property transaction contacts the Property Services Regulatory Authority, which maintains the current residential property sales register, to formally declare that the property is their own principal private residence, then they can request exemption from the publication requirements. I have taken account of that exemption in the examples I am considering here. However, the remaining requirements of the Bill still seem to involve an overreach into private information in many ordinary situations that have absolutely nothing to do with speculation.
Let us take, for example, a separating couple who have a modest holiday home in Ireland. As part of the separation agreement, they decide to sell the holiday home and to split the proceeds. The Bill requires publication of the name and address of each of the spouses and the sale price of the holiday home. If a person dies, leaving a small plot of land in a rural area to be shared between their three adult children who agree to divide it equally, the name and address of the deceased, the name and address of each of the three children and the value of the plot of land would all have to be published online. This seems unnecessarily intrusive where none of these transactions relates to property speculation and all these details will already have been provided to the Revenue Commissioners under existing legal requirements. The exemption for a principal private residence does not apply to any of these transactions.
With regard to non-residential land or other property transactions, the Bill proposes setting up a new online database of all non-residential property transactions which again would publish extensive information. My concern again relates to the degree of overreach that is provided for in the Bill. I am not sure if that was the intention of the proposed legislation. Consider, for example, a retired small business owner who decides to let out their former shop on the main street of a small rural town or an elderly farmer who decides to sell a modest plot of land to help make ends meet. In each of these examples, section 6 of the Bill requires that the elderly person's name and address, and the amount of rent or sale price they have received, to be published online in a readily accessible and electronically searchable online format. This raises safety concerns with the publication of the address of an elderly person and the amount of money they are getting in rent or the significant amount of money they may be getting from selling land, not to mention the evident privacy concerns I have already mentioned.
There are also data protection concerns given the extent of data that would be published. Article 36.4 of the general data protection regulation, GDPR, imposes an obligation on member states to consult the national data protection supervisory authority, the Data Protection Commission in our case, during the preparation of legislation that involves the processing of personal data.
Therefore, there is an obligation under GDPR to consult the Data Protection Commission on this Bill.
In addition, there are significant concerns about the availability and compatibility of much of the data that is proposed to be collected and published under the Bill. It essentially provides that the expanded register of residential property transactions and the proposed new register of non-residential property transactions would be housed in the PSRA. Sections 5 and 6 state that the PSRA is to receive, maintain and publish online the extensive information that I have referred to, where such information is duly filed with statutory bodies. However, the Bill does not specify who should provide the information to the PSRA, either the statutory bodies or an owner, as broadly defined by the Bill, nor does it give any statutory body the power or obligation to share such information with the PSRA. These omissions appear problematic. The lack of a specific legal basis for the public bodies to share all of this personal data would also give rise to data protection issues. Even if the Bill were to be amended to empower or require statutory bodies to provide the specified information to the PSRA, it appears unlikely that it would work effectively in practice. The required information, where available, would have to be obtained from more than one statutory body and probably from a number of bodies. However, the PSRA has indicated that this would raise compatibility issues between the data collected and provided by different bodies. For instance, it may not be possible for the PSRA to match information provided by different statutory bodies where no common identifier is used across all bodies. Compatibility issues are also likely regarding the interoperability of the different IT systems operated by different statutory bodies. Furthermore, it is not clear that the PSRA would be the most appropriate statutory body to host such extensive databases on land transactions, including land ownership. The primary role of the PSRA is to regulate property services providers, namely auctioneers, estate agents, letting agents and property management agents. For all these reasons, it is not at all clear that publicly available registers containing all of the extensive information required under the Bill would be the most appropriate or effective way to achieve the objectives of this Bill.
Conversely, a number of commitments in Housing for All would be more appropriate to address the issues of the hoarding of development lands and land speculation, which I agree we need to deal with. As stated in Housing for All, the Government's objective is that everybody should have access to sustainable good quality housing to purchase or rent at an affordable price, built to a high standard and located close to essential services, offering a high quality of life. The biggest challenge to delivering more affordable housing and mixed-use urban development in Ireland's cities is the need to tackle the supply of land and, in particular, the nature of the urban land market, which is one of the biggest drivers of cost and of constraints on housing delivery. For many decades, Ireland has experienced the impact of hope value. This arises from public decisions around zoning of land or investment in infrastructure, where the uplift in land value goes to the landowners or developers who are in a position to benefit but is not shared adequately with the State. As a result, land values have been inflated, contributing to higher development costs that result in higher house prices. This has also constrained the delivery of key infrastructure required by the community and necessary to support further development.
Through Housing for All, the Government is committed to tackling this issue and is bringing forward a system of land value sharing to enable local authorities to secure a proportion of the uplift in value when land is newly zoned for residential development or mixed-use development that includes residential use. The money will then be available to support the cost of providing social housing and improving social infrastructure.
Regarding the use of development land, there is only a one in six chance of zoned land being developed within the six-year cycle of a local authority development plan, with the lack of certainty as to which land will come forward for development resulting in an inability to plan for infrastructure provision. It is currently difficult to assess and monitor the extent of zoned and serviced land and track land that is brought forward for development, including the value of such land. The residential zoned land tax, another commitment in Housing for All, was introduced in Finance Act 2021 to incentivise the activation of land that is zoned and serviced for residential development but remains undeveloped. This is primarily intended to influence behaviour towards increasing housing output rather than to raise revenue. This tax, which will replace the vacant site levy, will come into effect in 2024.
Housing for All also mandates the provision of a national zoned lands register, which will be a central database on lands zoned for housing development. It will be based on the statutory development plan of each local authority and will underpin the residential zoned land tax and land value sharing measures. The national zoned land register is being established by my colleague, the Minister for Housing, Local Government and Heritage and his Department in conjunction with the 31 local authorities and is being supported by Ordnance Survey Ireland, OSI. It will ensure that the geographical location of zoned land is digitally captured and that the created register is updated on an ongoing basis.
These measures brought forward by the Government are a much more appropriate mechanism for dealing with the issues that the Deputy seeks to address than the Bill we have before us. There are also technical and drafting difficulties with the Bill but the challenges I have outlined are the main reasons for not accepting it. We could get over technicalities but the fact is that so much work has already been done through the Department of Housing, Local Government and Heritage, which is probably the most appropriate place to deal with the very relevant issues that Deputy O'Callaghan has raised.
I thank the Minister for the comprehensive response. Indeed, it is not the one I wanted to hear but I appreciate that significant work and analysis went into it.
In terms of the way we brought forward this Bill and the intention behind it, we would have been happy to work through with the Government and compromise on the issues that she raised. We are aware of the different issues she raised and discussed them in detail with the Office of the Parliamentary Legal Advisor, OPLA, in preparing this Bill. It would be possible, through Committee Stage debate and amendments, to deal with a lot of the issues and I would certainly be willing to do that and to engage constructively on it.
The difficulty and challenge in dealing with this is determining where to draw the line. I am acutely aware that if the line is drawn too wide, it could bring in too many people but if it is drawn too tightly, one simply would not get an accurate picture of what is happening with land.
I will touch on a couple of the issues raised. The lack of data on this is costing us as a country and is hampering our decision-making. I welcome the land value sharing tax that the Government is bringing in. It is a positive measure but it does not address the core issue raised in the Kenny report from almost 50 years ago. It provides a mechanism for helping the State to recoup some of the uplift in land values which, as the Minister correctly said, can then be put into social housing and infrastructure, which is a very welcome move. However, it does not help to cap land prices for housing or infrastructure. That failure to cap the prices is costing us dearly as a society and a State. If we had better data on what is happening with land, the gaping holes in our policy and decision-making that are costing us so dearly would not continue. This is something that has been on the radar since the Kenny report, which was published almost 50 years ago. We have gone for decades without implementing the right policies on this and one of the reasons is that we do not have the right data. I am happy to work through issues that need to be resolved in this Bill but by not progressing this Bill at all, we will continue not to have the full data on land that we need.
Another area where policy and decisions around this issue have failed us in recent years is the vacant sites levy that is being replaced. There are two issues with that levy that explain why it did not work. The first is the loopholes in it and the difficulties with its implementation, which hopefully will be tightened up with its successor. The other reason it was utterly ineffective is that we do not know what land price inflation amounts to. How can a levy on vacant land to stop land hoarding be set if the real rate of land inflation is not known? If the levy is set at 3% and land inflation is at 5%, then it is not going to be very effective. More importantly, land price inflation in Dublin could be anything from 5% to 9% but it could be much lower in other parts of the country. That is why it is important to set different rates in different parts of the country to reflect the reality on the ground. There is no point in having a tax to stop land hoarding set at 5%, 6%, 7% or 8% in areas of the country where land price inflation is at 0% or 1% or in having it below the rate of land price inflation in other areas.
As a State, as a society and as a people in a housing crisis and housing emergency that has been going on for years and is creating huge trauma and stress for people, we simply do not know. In one sense - and I mean this constructively - I can criticise the Government for the wrong policies on this, for making the wrong decisions or for not doing enough, but when we do not have the correct data, all I can do as a parliamentarian and as a housing spokesperson in opposition is make the best informed contributions that I can. When it comes to land price inflation I, the Government and everybody else are in the dark. It must be addressed.
I appreciate the Minister, Deputy McEntee, has put forward the case as to why the Government does not want to support the Bill. While I disagree with that, I respect it. I must urge, as strongly as possible, that if the Government believes this is not the way to address data around land price inflation and land costs, then the onus is on the Government to bring forward legislation that will do it, and which it is happy with. The Office of Parliamentary Legal Advisers and I have put forward our attempt at that. If the Government is to reject this, then I want it to bring forward similar legislation in this space. We cannot wait another 50 years to address this. These have been live issues since before many of us were even born.