Mary Henry (Independent)
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Amendments Nos. 1 and 2 are related and may be discussed together.

Kathleen O'Meara (Labour)
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I move amendment No. 1:

In page 4, to delete lines 40 to 56 and in page 5, to delete lines 1 to 4.

Perhaps the Minister will clarify that, because this is amending legislation, there is no commencement section. These amendments deal with matters I raised in the debate on Second Stage. Page 4, lines 40 to 56, provide for the extension of the operation of the framework set out in the Planning and Development Act, 2000, to allow further flexibility to local authorities in operating the provisions of Part V of the Act. They allow for the swapping and matching of developers' land and sites.

An important element of Part V of the 2000 Act, referred to by Mr. Justice Keane in the Supreme Court judgment, is to ensure the building of local authority housing and the provision of social and affordable housing take place in the context of providing a good social mix. The purpose of this is to avoid situations where poorer sections are housed in one part of the community while better off private housing is located elsewhere.

From anecdotal evidence and my conversations with colleagues around the country it is clear that this is a contentious issue. I had recent experience of this when, as a public representative, I was approached by a resident who explained that a planning application had been lodged in respect of an area close to where he lived and that he was concerned about the housing mix that might ensue from the application of the social and affordable rule. My local authority adopted a 10% rather than a 20% provision in this regard.

People get unnecessarily worked up about this issue. The principle of integration is very important and one we, as legislators, must take into account. It was debated in the context of the original legislation. I am concerned that the additional flexibility introduced by this Bill will undermine the power given to local authorities to ensure there is a social mix. I discussed the proposed amendments with a senior official in my local authority and he also took the view that allowing for land swapping and matching could mean that social and affordable housing could be confined to one area, thereby preventing the desired social mix in residential estates. That is the reason we seek the deletion of lines 40 to 56 on page 4.

James Bannon (Fine Gael)
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I support these provisions. The purpose behind the 2000 Act was to introduce flexibility and allow for off-site provisions such as land swaps and cash payments to local authorities. This Bill addresses that aspect. Bricks and mortar do not unite people. Our concern is with social integration and in view of this it is important that people from all sections of the community become involved in local activities, including the management of their residential areas. This process should start at an early age among all residents. I will not vote in favour of the amendments.

Michael Kitt (Fianna Fail)
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The Senator should support the Minister.

James Bannon (Fine Gael)
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Will the Minister indicate if he has ordered an audit of all lands owned by local authorities?

Martin Cullen (Waterford, Fianna Fail)
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The commencement date will be the date of signing of the Bill by the President, which I hope will take place before Christmas. These amendments would delete the options of providing land, houses or sites at another location or providing a payment instead. This would effectively remove the flexibility at the heart of the Bill. I, therefore, cannot accept them.

The purpose of changing this section of the 2000 Act is to set out certain additional ways in which an applicant for permission for development may comply with the requirements of Part V in relation to the provision of social and affordable housing instead of reserving land in their proposed development for the local authority or providing houses or sites within the development. In addition to these existing options, the applicant for permission will be able to reach an agreement to reserve land or provide houses or sites at another location, or to make a payment to the local authority which will be used for the provision of social and affordable housing, or to agree to a combination of any of these options.

As I have explained, the existing arrangements are too rigid and bureaucratic. Planning authorities and developers had difficulty in drawing up agreements and the rigidity was holding up housing supply. The complicated arrangements that have ensued are probably the reason the delivery of social and affordable housing to date is less than was hoped for. In the review I undertook, as promised in An Agreed Programme for Government, there was a consensus among those consulted that the system required more flexibility. Everybody said this, no matter what their perspective.

Kathleen O'Meara (Labour)
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I thank the Minister for his reply. He knows that we all have the same objectives, namely, to see social and affordable housing coming on stream much faster than heretofore and to ensure a good social mix in the process. These are the underlying principles of the Bill. I am concerned that perhaps we have not waited long enough to allow Part V to work. As the Minister said, it has been working in Fingal, an area where clearly—

Martin Cullen (Waterford, Fianna Fail)
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But on the basis of what I am doing. That is the interesting part.

Kathleen O'Meara (Labour)
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I know that the Minister is using the Fingal experience. Obviously we are up against it in relation to the withering issue and we will deal with that later. In many ways, it is a pity it had to happen that way.

If the Part V provision had remained in place for another year, the situation might be quite different. It takes time for new ideas and new legislation to work. The 2000 Act is an entirely new framework. The building industry is one of the major players in this process and, on occasion, it takes time for that industry to get the message that the Minister and Members are serious about this issue. We are serious about ensuring the social and affordable mix and about operating the Part V provision. That point must be put across strongly. One of the reasons I am disappointed with the Bill being put forward now is that it might seem that we are signalling the fact that we are pulling back from the Part V framework and from the serious commitment to ensuring that land is set aside for those who cannot otherwise compete in the market.

Martin Cullen (Waterford, Fianna Fail)
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This is an important point. I stated yesterday that I will be giving a specific direction that, in terms of payment, it is the absolute final option. I will be monitoring this from my Department and it will also be the responsibility of managers to ensure that this is the case. I reiterate that local authority members will also be monitoring this and it will be unacceptable if this is just regarded as a source of funding.

There were instances, particularly in the Dublin area, where the cost to a local authority of obtaining one or two units was huge. This did not make sense. In cases where a substantial payment in lieu was given, instead of obtaining two units, a local authority might get ten, 15 or even more units. That was the real reason behind the change.

I have made it clear in my instructions to the local authorities that this will be the final option. Any moneys that the local authorities collect under the terms of this provision can only be used for the specific purpose of the provision of social and affordable housing. It would be disastrous if the money collected under this provision disappeared into the general funds of local authorities and was spent in other areas. That will not be allowed to happen.

I return to the Senator's other point about the need to try to strike a balance. One should remember that some players would have said, "Get rid of Part V. That is what we want. Send it out the door. Forget about it. We do not want anything to do with it." Many members of the public might have subscribed to the same view. However, the Government did not go down that road. It was never an option I seriously considered, although there were those who would have wanted to see it happen in that way. I said Part V, the 20%, should remain.

Senator O'Meara rightly made the point that in her local authority they did not choose to go to 20%, they chose to go to 10%. I think some local authorities misunderstood it. It was not a minimum of 20%; that was the maximum and they could work it out. If one looks at the figures, some local authorities chose to go for 15% affordable housing and only 5% social housing, while some went 50/50. Some went for a different balance. Some did not go to 20%, but to 8% and 7%. Therefore, there were different mixes and different options used. That was right because local authorities have different needs at different times.

James Bannon (Fine Gael)
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Will the Minister introduce legislation to ring-fence development levies to be used in the particular development concerned? When the levy comes into the main coffers of a local authority it can go anywhere. It is important that the levies are spent in the development concerned.

Martin Cullen (Waterford, Fianna Fail)
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It is an important point. I am happy to tell the Senator that that is already provided for in the 2000 Act. I do not need to introduce legislation because it is already in place.

Acting Chairman:

Is the amendment being pressed?

Kathleen O'Meara (Labour)
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I have very little left to say. I appreciate where the Minister is coming from. He takes a pragmatic view and he trusts the local authorities and the players out there. To a large extent, at one level I would agree with him that they should get up and get on as best they can with doing the job that we, the legislators, have given them. That would be fabulous in an ideal world but as we all know it does not work as well as that. That is why I have concerns about how this will work in practice. I have concerns that the option of last instance, as we would like it to be, will become the option of first instance in some cases, although obviously not in all, depending on who is negotiating and the circumstances. I am concerned that it will become a habit.

Money is not necessarily the problem, at least at present, particularly in the urban areas. Acquiring land for housing is the problem. In some cases to get the value of the 20% is not necessarily the solution. Acquiring land for public housing is very difficult and in some areas it is almost impossible. I would be concerned that putting that option in the legislation would create a certain pressure at the edges to go for that option. Pragmatism can go too far in that regard.

The Minister's views are clear, as are his priorities. I am not sure that that will necessarily translate into action on the ground.

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Kathleen O'Meara (Labour)
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I move amendment No. 2:

In page 5, to delete lines 5 to 7.

James Bannon (Fine Gael)
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How does the Minister propose to collect the levy? This is a question I asked yesterday.

Acting Chairman:

We discussed amendment No. 2 with amendment No. 1 and the amendment cannot be discussed again.

James Bannon (Fine Gael)
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The Minister did not explain how he proposes to collect the levies.

Acting Chairman:

The Senator cannot raise it now.

James Bannon (Fine Gael)
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I did not understand. I thought the amendment would have to be called.

Acting Chairman:

It was decided by the House that amendments Nos. 1 and 2 would be discussed together. Senator Bannon may raise his question when we come to the section.

Acting Chairman:

Question, "That the words proposed to be deleted stand", put and declared carried.

Acting Chairman:

Amendment declared lost.

Kathleen O'Meara (Labour)
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I move amendment No. 3:

In page 5, line 43, to delete 'undue'.

Martin Cullen (Waterford, Fianna Fail)
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The Senator's amendment would delete the word "undue" from the phrase "the need to counteract undue segregation in housing between persons of different social background in the area of the authority." The planning authority must give consideration to this need when deciding whether to enter into an agreement other than the reservation of land within the development under subsection (3)(b).

I am determined that this new flexibility in making agreements will not lead to a breakdown in social integration. Builders will not be able to put social or affordable housing at the edge of communities with no social links and no infrastructure. However, social integration does not mean making people live side by side. It does mean ensuring that people of all social backgrounds are represented within a local community – going to the same shops and the same schools, benefiting from the same community facilities and the same transport links.

I will be setting firm guidelines for local authorities as to the types of alternative arrangements that would be acceptable in terms of social integration. That is very important. In including this phrase in the section, which is clear in its meaning, I was following the existing language of Part V. I did it to maintain consistency. Section 94 of the Act requires local authorities, when preparing their housing strategies, to take into account the need to counteract undue segregation in housing between persons of different social backgrounds. The phrase is clear and I do not think the amendment would improve it. I understand what the Senator is trying to say, but I am trying to be consistent. If I start using different language now, we will end up with different interpretations. I would rather be consistent.

Amendment, by leave, withdrawn.

Question proposed: "That section 3 stand part of the Bill."

James Bannon (Fine Gael)
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The section we are dealing with is designed to ensure the social mix element is not destroyed. How does the Minister propose to collect the levy and will he guarantee that it will not be passed on to the purchasers of affordable housing? It is of the utmost importance that those who need housing do not end up having to pay the levy. There has been a tendency for levies to be passed on to purchasers. There must be a guarantee that this will not happen. Who will adjudicate when a dispute arises between local authorities and builders? Will an agency be put in place to adjudicate and decide upon evaluations and so on? These are important issues.

Michael Kitt (Fianna Fail)
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When Senator O'Meara mentioned the issue of social segregation, it reminded me of the court case about which we heard yesterday in which the judge commented that just because people living beside each other might both be living in expensive houses, it does not necessarily mean they will get on. There is always a difficulty in dealing with segregation.

Senator O'Meara wanted to remove the word "undue". I know that in County Galway when it comes to the issue of allocating affordable houses, there is always a difficulty in deciding who should get the end house, the middle house and so on. I understand a lottery system is used in most local authorities to decide which houses people can buy under the affordable housing scheme. There will always be a difficulty, but as we know from the court case mentioned, one can also have problems between people living in expensive houses, over driveways or whatever.

When the Minister talked about the issue of making payments to the local authority, he pointed out that it was for the provision of social and affordable housing. I welcome this. He also pointed out that one could have a combination of the payment of money for social and affordable housing and the reservation of land at another location. Payment of money is not the only option, an issue about which people might be concerned. I know from my experience that there are many situations where private individuals could help if money was available to obtain land for community purposes, perhaps from the Land Commission. There are still some tracts of land available. Money could be used for that purpose. It would be useful to look at the question of the payment of money or provision of land at another location which I would not completely rule out. As the Minister said, the Bill gives us flexibility to provide housing as quickly as possible. I support the Bill.

Michael Brennan (Fianna Fail)
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I, too, wish to comment on the collection of levies. Where local authorities have land banks and town and village plans are in place, I urge that the levies collected in particular areas be used to best advantage. Fingal has been mentioned as an ideal location where land has been developed. Where councils have land available, the levy should be used to promote public-private partnerships to provide social and affordable housing and thus meet housing need. Councils should have flexibility to use the land and the levy to best advantage.

Martin Cullen (Waterford, Fianna Fail)
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In reply to Senator Bannon, there were three aspects that were overlapping. I shall try to deal with them. There are normal development charges that have always been paid. This remains the same. The money is paid into the capital fund within a local authority to provide for water, sewerage or whatever. It cannot be paid into the general fund, it can only be used on the capital side for the provision of facilities.

There are two further payments, of which one is the levy related to the roughly 80,000 planning permissions outstanding. This relates to the withering clause. When the money is paid, local authorities must receive a receipt for each house in order that there is absolute transparency. Those acting on behalf of purchasers will no doubt want to ensure the levy has been paid and that they will not be caught for it again. It is a case of belt and braces. The money will have to be paid into the capital housing fund. As this is legally stated, there will be no other options.

The third levy is the payment in lieu on Part V. I hope this will yield a small sum of money in the sense that there will be greater provision of land and houses than a simple payment of money. Whatever sum is received in lieu will also be paid into the capital housing fund as is legally provided for in the Bill. Section 3(12) states, "any amount paid to a planning authority in accordance with subsection (3)(b)(vi), (vii) or (viii) shall be accounted for in a separate account and shall only be applied as capital for its functions under this Part or by a housing authority for its functions in relation to the provision of housing under the Housing Acts, 1966 to 2002." That is very specific and how the money is to be accounted for.

I have no doubt that councillors will be asking the manager at monthly meetings about the latest agreements put in place, the basis for them, whether there have been land swaps, how much money has been collected, whether it has been paid into the account and so on. That is a transparent and accountable way of proceeding. There will be no option for managers or councillors to turn around and take any of this money and do something else with it. The Bill is very specific. These are the three levels – planning charges, levies or payments in lieu.

Question put and agreed to.

NEW SECTION.

Kathleen O'Meara (Labour)
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I move amendment No. 4:

In page 11, before section 4, to insert the following new section:

Martin Cullen (Waterford, Fianna Fail)
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About 44,000 at 31 December.

Kathleen O'Meara (Labour)
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In effect, the decision is to extend 44,000 planning permissions and levy 0.5% on their value. In so doing, as I said yesterday on Second Stage, it will eventually let them off the hook in relation to the social and affordable housing rule. In looking at the background to this I came across a speech given by Mr. Philip Jones, president of the Irish Planning Institute, to the national planning conference in 2001, the theme of which was the implementation of the 2000 Act and the national development plan. Naturally, Part V of the 2000 Act formed a core part of his address. I will refer to some of what he said because he was so on the ball. It is worth referring to because it echoes my thinking. I hope it will show that this thinking is not just a partisan Labour Party perspective and that the concerns I raise are echoed across the board.

Let us consider the reason the withering rule was inserted in the 2000 Act. It was an anti-avoidance measure to ensure compliance with the Part V obligations. Mr. Jones referred to the fact:

The Government wisely included a measure by which planning permissions granted between August 1999 and the coming into force of the housing strategies would have a life of two years. This was a necessary anti-avoidance measure, to ensure that builders and developers would not seek to frustrate the operation of the new provisions.

He continued:

It is just typical of the house-building sector, flushed with their success in persuading the Minister for Finance to dump the proposed 60% capital gains tax regime for the sale of development land, that they now seek to have the time limit removed. This will have the effect of further delaying the implementation of Part V.

He went on to refer to the sustained lobbying campaign by the building industry in relation to Part V. He said:

I have little doubt that, despite not winning the constitutional argument last year, many of the builders still have a rooted objection to the social and affordable housing provision, and will seek to stymie its application in practice in the case of individual planning applications.

Martin Cullen (Waterford, Fianna Fail)
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Nor am I.

Kathleen O'Meara (Labour)
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The Minister has the advice of the Attorney General available to him. I have good advice, too, advice that has been available to our party for a number of years and which has been useful to Ministers and Departments from time to time when discussing legislation. Mr. Jones is making my point. Builders are being let off the hook by the extension of the two year rule. The principle inherent in the legislation, when passed by both Houses in 2000, is being fundamentally undermined and diluted. It is time the building industry was told to join the rest of us and that it is part of the community. It seeks to make a profit, obviously, but it must come on board with the rest of us, particularly where the provision of housing for those who are not capable of providing it themselves is concerned.

The amendment we have brought forward agrees that the Minister should extend the permissions. We accept the point made on Second Stage that to terminate them now would cause a serious supply problem. However, in extending them the Minister should bring them within the remit of Part V. In so doing he would sustain the fundamental principle of the Bill and send a clear signal to the industry that it will not get off the hook and that its lobbying, at least in this case, has not worked.

Martin Cullen (Waterford, Fianna Fail)
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The Senator's contribution is interesting. She is now saying I was right to try to keep the supply alive. As we have a different approach and the same objective, how do we do it? What the Senator said was my starting point. It is how I thought we should do it, being simple and straightforward. There did not seem to be a problem. There was a problem when I examined it. It would have been the most simple thing to do and was my preferred option, but a number of issues would have arisen, of which one was the fact that it would have meant applying legislation retrospectively. There is no question about this and the advice available to me was that it was questionable whether one could do it under the law.

Martin Mansergh (Fianna Fail)
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One of the areas in which the Government has had most success in recent years has been increasing housing supply. Perhaps the Minister will comment on a medium-term problem. The housing projects for which he is extending planning permission predate the 2000 Act. They are not, therefore, subject to the Part V provisions or the proposed levy. There is perhaps a danger that the building industry will concentrate on progressing those projects, which is well and good, and that new projects, which will be subject to somewhat more onerous conditions, will be neglected. The Minister might bear this in mind.

Martin Cullen (Waterford, Fianna Fail)
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I am aware of the point the Senator is making and we may be slightly at cross purposes. The levy I referred to in this instance applies specifically to those permissions which would have withered. I introduced it in order to obtain a community gain. I considered all the options and wanted to get something back, but I did not want to lose the supply. This is separate from Part V and the Senator is absolutely correct to state that there was no imperative on these sites at all regarding the legislation. I had the option of either letting them wither or of maintaining supply. However, I then felt I would go the extra mile and try to get something back. These levies of 0.5% and 1% apply to approximately 80,000 planning permissions so there is an immediate ring-fenced gain of about €80 million which will go directly to the local authorities' housing capital funds. I have obtained a major gain.

Martin Mansergh (Fianna Fail)
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Will the levy apply only to those houses or will it also apply to houses built in the future?

Martin Cullen (Waterford, Fianna Fail)
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I have brought more flexibility into the general operation of Part V. The position at present is that the 20%, or whatever is the agreed portion, must be on the specific land in development. This was giving rise to all sorts of problems. I have expanded the provision to include land swaps with local authorities and different sites. There is a final option which would cater for some areas in Dublin where there are high property costs and in which local authorities would find it very expensive to provide housing. Authorities might obtain only two units out of such an agreement, whereas a cash payment might yield more. That is based on the 20% and it has nothing to do with the 0.5% and 1% levies. It is my wish and that of the Government that, in the interests of social integration, Part V must work. We want properties to be built. We are not really interested in obtaining money, although there are special circumstances where that may be the best option for the local authority. However, it is the final option.

Kathleen O'Meara (Labour)
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I thank the Minister for his reply and am delighted to hear we started from the same square on the board regarding this matter. Obviously I do not agree with where he has moved to from there, even if he has had to listen to legal advice and so on.

When the original legislation was debated in both Houses, the number of speakers who referred to the fact that it was bound to end up in the Supreme Court was quite extraordinary. We all knew we were looking at a fairly radical departure, namely, that the State would intervene and, in return for compensation, basically acquire land, sites and houses for the purpose of providing social and affordable housing for the common good. It was good that this was tested in the Supreme Court and it was even better that the court issued the judgment it did. That is the framework within which we are operating.

If there had been no Supreme Court judgment, I would not be asking the Minister to look at the spirit of it. Mr. Justice Keane said on page 23 of the judgment that the schemes "are rationally connected to an objective of sufficient importance to warrant interference within 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." In other words, the Oireachtas has the right to interfere with property rights in this case in order to advance the common good and to protect a basic right, namely, the right to housing where people do not themselves have the means to provide it.

That is the framework within which we are operating. It gives the Oireachtas the authority, indeed the right, to act on these particular planning permissions and to bring them in under the Part V framework. I agree that the measures will probably be tested but my instinct is to let them be tested, particularly in the context of the existing judgment. The common good is better served by bringing these permissions under Part V.

This is worth the risk for a number of reasons. Housing supply can continue and the provision of 20% of housing to a local authority means there would be a huge gain. In addition, it would underline a fundamental principle and send out a strong signal that we consider the common good of the fundamental right to housing and the provision of housing to be paramount. That is a very important signal to send. It might also convince those builders who do not consider themselves part of the rest of the world to join us. Given the urgent social need for housing with which we have been faced in recent years, those builders could get on with providing it.

James Bannon (Fine Gael)
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I understand the two year rule was introduced to prevent a flood of applications prior to the 20% social housing provision coming into force. I support the inclusion of the new section, but what we all need is increased housing output to meet the huge demand. There are 120,000 people on our waiting lists and we require upwards of 50,000 housing units to meet the demand. It is important that every effort is made to meet that demand, but we face a major challenge. Several bodies, including the Department, estimate that it may take in the region of 30 years to clear the waiting lists at the current rate. We must work on this and I support the inclusion of the new section. There is nothing wrong with it and it is a good proposal.

Martin Cullen (Waterford, Fianna Fail)
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I listened carefully to Senator O'Meara's contribution and it struck me that we have reached the same point. The best way to achieve what the Senator suggests, and for me to get what I ultimately want – if it were open to me to do so – would have been to allow all the permissions to wither.

Kathleen O'Meara (Labour)
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No.

Martin Cullen (Waterford, Fianna Fail)
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The Senator should bear with me. If these withered on 31 December and the applicants still wanted planning permission, they would have to renegotiate those permissions with the 20% provision. That would have been the fastest way to do it rather than obtaining the legal imprimatur, having it tested through the courts, etc., and then arriving at the point where the applicants would have to re-apply for planning permission.

The fastest way to achieve what the Senator wants would have been to allow them to wither. The problem I had with that was clearly the supply; that was the fundamental issue. I also wanted to see if there was any way I could obtain a community gain out of this without interrupting supply. They were the issues with which I had to deal. I agree with the Senator's point about trying to have the full imprimatur of Part V applied to the permissions. The fastest way to do that would have been to allow them to wither and then move on.

Kathleen O'Meara (Labour)
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Having done so from square one.

Martin Cullen (Waterford, Fianna Fail)
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Those involved would have had to do so because they would have had to have the 20% provision. They would have been obliged, one way or the other, to renegotiate with the local authorities. We are back to square one. Allowing them to wither would have achieved the same end as that to which the Senator referred.

Another approach was to opt for supply and see if I could obtain a community gain from such an approach. I decided to pursue this approach. Relative to what has been happening in recent years, the inflation in house prices has dropped dramatically – although not to the level at which I would like it to be. I have made the point publicly that if one was to consider matters going forward, net income will not change that dramatically in the coming years. We have given back so much that we are at the bare bones of what the tax system should be delivering. In terms of the world economy and our competitiveness, we will not see substantial wage increases. People's incomes will remain quite static in the coming years. In terms of the ability of purchasers to pay, they will not be able to gallop in pursuit of spiralling prices. If that was the case, nobody will be able to buy anything. I have made the point directly in public commentary and when speaking to representatives of the building industry, that we must pause.

Now is the time to maintain supply. In the region of 54,000 to 55,000 houses will be built this year, which will be a record. We have arrived at this point after many years of cranking up everything to increase supply to match demand. We need that consistent level of supply for the next ten years. Experts claim that the provision of 50,000 to 55,000 houses will be required per annum during that period in order to meet demand. The way to maintain price balance in the market is to increase supply. That is why I took this option. I do not have a fundamental disagreement with what the Senator suggested. If she were to think this through, as I did, she would realise that the best way to do what she wants me to do would be to allow these permissions to wither. We can forget about the spend that could have been involved in the next two or three years in terms of challenges in the courts and further planning negotiations. I opted for supply and a bonus and I think I achieved the right balance.

Michael Kitt (Fianna Fail)
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The Minister referred to section 96 of the Principal Act in relation to the two year withering rule. He said that normal rules would apply in relation to the duration of planning permissions. I recall a time when a planning permission had a duration of seven years which was then reduced to six years and later to five. What were the circumstances of the introduction of the two year planning permission duration provision?

Martin Cullen (Waterford, Fianna Fail)
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The two year provision was specifically related to the withering clause in the context of a gap in the period in which the Bill was introduced and the implementation of the housing strategy. We are returning to what was the normal position. The Deputy was correct to state that there were changes in respect of the duration period, but the normal position is five years. We will return to the normal position.

Kathleen O'Meara (Labour)
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How did the Minister arrive at the figure of 0.5% in respect of the levy? How much does he consider it will yield in the coming year and the following year? Am I correct in assuming that the 0.5% levy is a ring-fenced fund specifically allocated for social and affordable housing?

James Bannon (Fine Gael)
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The Minister said he would like to see a reduction in house prices. VAT was increased by 1% in the budget. As the Irish Home Builders' Association stated, this will put an extra burden on builders in that it will cost an additional €1,800 to build a normal house. Houses are zero VAT rated in the UK. Perhaps the Minister would consider introducing a similar regime here—

Martin Cullen (Waterford, Fianna Fail)
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I am not the Minister for Finance.

James Bannon (Fine Gael)
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—in order to reduce house prices. If he could introduce a policy that would reduce the cost of building a house, that would result in an increase in the housing stock.

Michael Kitt (Fianna Fail)
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We will be discussing the Appropriation Bill tomorrow.

Martin Cullen (Waterford, Fianna Fail)
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Senator O'Meara asked a good question. I was trying to create a balance between what I thought I could obtain fairly from the market and what I could deliver into the housing funds. I chose the house value figure of €270,000 because I did not want to disadvantage people in the Dublin area, where house prices are higher than the rest of the country. I took the average price of a house in Dublin, which is approximately €266,000 and rounded it up to €270,000. I thought a 0.5% levy on houses valued less than €270,000 was reasonable in that I surmised I could get that from the market.

Kathleen O'Meara (Labour)
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I take it that local authorities will collect the levy.

Martin Cullen (Waterford, Fianna Fail)
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Every unit built under this scheme – in other words, all 80,000 units – is subject to the levy. A receipt will issue from a local authority for each house built within its area to ensure there is transparency and accountability in respect of the money collected on each unit. This is also important from the purchaser's point of view. I have no doubt that a purchaser's solicitor will check that the levy has been paid in order to ensure that the purchaser will not have to pay it at a later date. The levy is ring-fenced into the housing fund in the local authority area.

Kathleen O'Meara (Labour)
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Is the levy payable on commencement of the building or on the point of sale? A community gain levy of €1,000 applies to each planning permission for housing given after 20001 in the North Tipperary County Council area. This is a social, cultural and community fund, which is a good, but the collection of the money is not as simple as it might appear. Unless a person is employed to travel around the county checking the commencement of the building of houses, we will end up with less money than we should have. The fund is currently running at less than 50% of its potential maximum level. I asked this question because, in practice, we find that the collecting of the levy requires the employment of an officer. Is the levy collectable on commencement of building?

Martin Cullen (Waterford, Fianna Fail)
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It is collectable on the sale of a house. The Senator is correct in that the fund will require to be managed by local authorities, particularly those which have a large number of such planning permissions. I am optimistic in that I believe everyone knows the position, that builders will want to continue to build to increase housing stock and that the levy will be paid. Local authorities will be required to ensure that the levy is collected. It will be clear to the developer and everyone else. Each receipt must be issued. From the purchaser's point of view, any solicitor worth his or her salt when examining documentation pertaining to a property will want to see the receipt to ensure the purchaser is not saddled with the levy at a later stage. There is a belt and braces approach both ways on it.

Question put: "That the new section be there inserted."

Tá

Rory Kiely (Fianna Fail)
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Amendments Nos. 6 and 7 are consequential on Government amendment No. 5. All may be discussed together.

Government amendment No. 5:

In page 13, between lines 33 and 34, to insert the following:

"(7)(a) The planning authority shall issue, in respect of the payment to it of an amount (being the amount required to be paid under this section in a particular case), a receipt, in the prescribed form, to the payer stating that the liability for payment of that amount in the case concerned has been discharged.

(b) A document purporting to be a receipt issued under this subsection by the planning authority shall be prima facie evidence that the liability for the payment of the amount to which it relates has been discharged.".

Martin Cullen (Waterford, Fianna Fail)
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Amendment No. 5 inserts a new subsection (7) in section 96B to require local authorities to issue a receipt once the levy has been paid, a matter about which I have already spoken. This receipt is evidence for house purchasers and their solicitors that the levy has been paid and that the condition of the planning permission has been complied with. Solicitors should not allow their clients to complete the purchase of the house without the receipt being produced. It is a protection for purchasers. Amendments Nos. 6 and 7 are consequential on the insertion of this new subsection to change the numbering in later subsections. I hope there will be agreement on this.

James Bannon (Fine Gael)
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Is there a guarantee as to how the subsection will be enforced?

Martin Cullen (Waterford, Fianna Fail)
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It is part of the law of the land which is the best guarantee I can give. Not alone have I set out in legislation the levy but this subsection has also been inserted. This goes beyond what we have done before and gives a double guarantee. As I stated, solicitors must be mindful of this and ensure they have a receipt from the local authority to make sure the levy has been paid.

Kathleen O'Meara (Labour)
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This is a very useful amendment in the light of our earlier discussion. It is necessary to ensure the levy is not passed on to the purchaser.

Amendment agreed to.

Government amendment No. 6:

In page 14, line 6, to delete "subsection (7)(b)" and substitute "subsection (8)(b)".

Rory Kiely (Fianna Fail)
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Amendment No. 9 is consequential on Government amendment No. 8. They will be discussed together.

Government amendment No. 8:

In page 14, line 14, to delete "0.2 hectares" and substitute "0.1 hectares".

Martin Cullen (Waterford, Fianna Fail)
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Amendment No. 9 inserts a new section in the Bill to amend section 97 of the 2000 Act. Section 97 of the Planning and Development Act, 2000, provides that an exemption certificate may be sought in relation to small housing developments – developments either consisting of four houses or less, or for housing on land of 0.2 hectares, that is, half an acre, or less. This exemption was included so as to exclude very small developments, including single houses from the Part V requirement.

The issue of the 0.2 hectare exemption has been raised by a number of urban local authorities in particular. Their view is that it allows developments much larger than four units to be built without any social and affordable housing element. My Department's residential density guidelines, which are having such a welcome impact on the supply of housing, encourage higher densities in certain urban areas resulting in schemes with considerably more than four houses or apartments on sites of up to 0.2 hectares.

In relation to town and city centres where small in-fill sites of this size are found, the guidelines recommend that there should, in principle, be no upper limit on the number of dwellings that may be provided. A site of 0.2 hectares in a town or city centre could, therefore, accommodate at least ten to 15 units. It is reasonable to retain a lower limit in the interests of fairness. For practical reasons it is hard to envisage reserving land on very small sites. However, given the impact of the density guidelines, it is reasonable to reduce the limit to 0.1 hectares.

Amendment No. 8 makes a complementary change to section 96(b). This section provides that the levy shall not apply to small housing developments of four houses or less or to land of 0.2 hectares or less. The amendment also reduces the limit to 0.1 hectare. In fairness, I acknowledge that Deputy Gilmore raised this issue.

Kathleen O'Meara (Labour)
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I am aware that this matter was raised by Deputy Gilmore. As the change will probably only affect urban areas and in-fill sites, I support the amendment.

Amendment agreed to.

Question proposed: "That section 4, as amended, stand part of the Bill."

Kathleen O'Meara (Labour)
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I oppose the section.

Question put and declared carried.

NEW SECTION.

Government amendment No. 9:

In page 14, before section 5, but in PART 2 of the Bill, to insert the following new section:

5.–Section 97(3)(b) of the Principal Act is amended by substituting '0.1 hectares' for '0.2 hectares'.".

Amendment agreed to.

Section 5 agreed to.

Sections 6 to 13, inclusive, agreed to.

SECTION 14.

Question proposed: "That section 14 stand part of the Bill."

Kathleen O'Meara (Labour)
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While section 14 appears innocuous at first glance – it is certainly incomprehensible – the explanatory memorandum is more revealing. It states the section "amends section 262(4) which provides that certain regulations made under the Act are subject to a requirement to get positive approval." I have no reason to disagree with this. However, the memorandum continues: "This amendment would remove the requirement to get positive approval for procedural regulations in relation to development by State authorities, while retaining the requirement that regulations determining the types of development which are approved under that special procedure will be subject to the positive approval requirement." I am concerned by this provision and call on the Minister to explain the reason it is considered necessary.

Martin Cullen (Waterford, Fianna Fail)
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Section 14 proposes to amend section 262(4) of the 2000 Act which provides that certain regulations made under the Act are subject to a requirement to get positive approval of both Houses of the Oireachtas. Regulations determining the types of development which are approved under the special procedure which applies for certain State developments, mostly security related, will continue to be subject to the positive approval requirement. However, the amendment would remove the requirement to get positive approval for the procedural regulations in relation to these developments, that is, the regulations setting out the detail of how these developments are notified, the documents that must be included and so forth.

During its passage through the Oireachtas the 2000 Act was amended to ensure important regulations made under the Act such as those exempting development or setting fees would be subject to the positive approval of both Houses. A number of planning regulations have already been the subject of this procedure, including the consolidated 2001 regulations.

The types of regulations subject to this procedure are substantive, not procedural. However, due to an oversight, positive approval is required for both types of developments by State authorities which, for security reasons, are subject to a different procedure. As matters stand, therefore, even minor changes to the procedures, for example, changing the scale of the maps which must be provided, are subject to the requirement to seek positive approval. This was not the intention and is an unduly onerous requirement given that no substantive change has been made in the types of developments included. I propose, therefore, to provide that only substantive changes to the types of development involved will be subject to positive approval.

Kathleen O'Meara (Labour)
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I thank the Minister for his complex reply.

Martin Cullen (Waterford, Fianna Fail)
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It is a technical amendment.

Kathleen O'Meara (Labour)
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I accept that and while I agree with the Minister up to a point, it strikes me that introducing what appears to be a technical, minor amendment, could have major implications. As I am not sure I fully understand the complex reply given by the Minister, I wish to tease out the amendment and get a second opinion before agreeing to it. This case provides a good illustration of the need for a gap between Committee Stage and Report Stage.

Martin Cullen (Waterford, Fianna Fail)
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While I understand the Senator's concerns, I can confirm that all the substantive procedures will continue to be subject to the regulations. This is a technical amendment which sets out to differentiate between procedural and substantive changes. I gave the example of the current requirement to get the approval of the Houses for a proposal to change the scale of a map. All the changes as laid out in the regulations, of which I can make a copy available to the Senator, will remain under the positive approval regulation.

Question put and agreed to.

Sections 15 to 17, inclusive, agreed to.

SECTION 18.

Question proposed: "That section 18 stand part of the Bill."

Kathleen O'Meara (Labour)
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This section contains very welcome provisions which give more flexibility to voluntary housing bodies. I commend the Minister for introducing them.

Martin Cullen (Waterford, Fianna Fail)
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I welcome the Senator's comments and I am certain other Senators will wish to contribute on this important aspect of the Bill which has been overlooked in favour of its other provisions. The impact of this section on the marketplace is potentially greater than the other changes in the Bill. I am sure Senators will have examined the recent statistics on housing and noted developments in the voluntary sector, which is growing significantly. The potential for the emergence of a strong sense of community, belonging and pride is significantly greater in areas where there is a strong element of home ownership. People in such neighbourhoods will look after their property. All these positive features play a major role in terms of social integration. Nevertheless, the Government and the financial institutions can do much more. In some countries, for example, mortgages of 50 and 60 years are available to people who could never afford to take out a 20 year mortgage. This allows people to take a longer term view and creates a strong ownership element with all the important benefits this entails.

Many of the current voluntary schemes, which are letting schemes under the current law, are extremely successful. They are well managed and the residents share a strong sense of place. Local housing committees also play a significant role and positive work is being done. The voluntary sector has proposed that it be allowed to expand its brief in this area in future. It now wants to get involved in affordable housing and shared ownership schemes. The concept behind such a move is that the sector would retain a significant part of the ownership of a scheme, thus ensuring housing units would not be immediately floated on the market at a high price and the people most in need would not lose out.

I have welcomed the approach of the voluntary housing groups. If we do the right things moving forward, and given the possibility this holds, maybe we could expand it further in other areas directly with local authorities to see if we could get a better mix of housing ownership. The figures indicate that sector is growing quite substantially.

This is a fundamental part of the Bill which perhaps, given the other more polarising issues, has been somewhat overlooked. I see this as a huge and equally significant part of the Bill, as the Senator does, if I am judging it correctly.

James Bannon (Fine Gael)
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I agree with Senator O'Meara and the Minister. The voluntary housing organisations have been extremely active in meeting special category needs and in looking after the housing needs of the disabled and elderly in our society. It is important we harness the voluntary housing organisations' efforts to meet the more general housing needs of those on local authority housing waiting lists. Perhaps the Minister will try to facilitate them in this area. It would be beneficial to extend the role of the voluntary housing organisations and to harness their efforts.

Michael Kitt (Fianna Fail)
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I join the Minister and other Senators in welcoming the work of the voluntary housing sector. I spoke about this matter yesterday on Second Stage and mentioned RESPOND and Clúid in County Galway and other agencies which have done excellent work in conjunction with the local authorities. I hope local authorities will look at the issue of returning emigrants. I am sure the Minister is aware the voluntary bodies play a significant role in this area. There is a voluntary housing scheme in Dunmore, County Galway, known as homes for elderly.

No matter what way voluntary housing schemes and bodies go in the future – as the Minister said, there will be more people in affordable housing or shared ownership schemes – there will always be a need for a number of houses to be allocated to elderly people and I would not like to see such houses being sold off. Most local authorities hold a number of houses for that sector which are relet.

As we said yesterday, it is part of the Irish psyche to desire to own a house and that is why affordable housing has been successful. However, there should be houses for particular sectors, such as elderly or returning emigrants. It is evident from the CSO figures that many retired emigrants are returning, are looking for housing and would like to live in their home place. I join in the well deserved compliments to the voluntary housing agencies.

Kathleen O'Meara (Labour)
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I agree with Senator Kitt regarding the excellent work being done by the voluntary housing sector. It has introduced a broader range of availability and has ensured that sectors which may not be taken care of by local authorities because of their own demands may be taken care of by the voluntary groups. There is no doubt that the fact such housing schemes are all purely rental has been a growing issue.

Cyprian Brady (Fianna Fail)
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I echo the sentiments expressed in regard to the voluntary housing sector. My experience of it is with Include, as is Senator Kitt's. It is probably one of the best organisations I have seen at work and it has co-operated extremely well with the local authority. I suggest that encouragement should be given to indigenous voluntary housing organisations. A number of such organisations are coming in from abroad and I urge that we give them as much support as possible.

Michael Brennan (Fianna Fail)
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I wish to be associated with the congratulations to the voluntary housing sector. I have been involved in two housing organisation. Voluntary housing organisations deeply appreciate the State subsidies paid through local authorities which come back to voluntary housing organisation after 20 years. It is great to see the number of houses being provided by the voluntary sector which has met its targets under the national plans.

Assistance to the voluntary housing sector can best be given where services have been provided. We should consider how we can help voluntary organisations to continue their work. Where elderly residents seek nursing home care, we should see if it could be provided in the same complex. Voluntary housing organisations providing family homes should receive every assistance to move into the affordable housing area. That would be welcome.

James Bannon (Fine Gael)
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Senator Moylan's point is that local authority housing should not be sold, but control on the sale of such housing would be a better option. The sale or lease of houses should be subject to the terms and conditions of the local authority involved and these should be clarified so that houses are not sold to speculators. I believe in control of sales but, where necessary, houses should be sold and guidelines should be in place for such sales.

A greater percentage of the receipts from the sale of houses that are resold within 20 years of purchase should be allocated to the coffers of local authorities. It is important that legislation should be introduced to that effect.

Martin Cullen (Waterford, Fianna Fail)
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I thank the Senators for their contributions as they raised interesting issues, of which all of us are aware. I have served on a local authority and I acknowledge the point raised by Senator O'Meara and others about losing the people with the greatest ability within a community to harness the energies of those around them in leading committees and encouraging social development. Not all of us have the necessary social and interpersonal skills. The danger in encouraging people to do the right thing is that this creates a residual effect for those left behind and that is something of which we must be mindful.

Rory Kiely (Fianna Fail)
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When is it proposed to take Report Stage?

Michael Kitt (Fianna Fail)
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Now.

Kathleen O'Meara (Labour)
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It is my understanding that the Dáil is to take Second Stage of the Bill on Friday. That means Report Stage could be accommodated tomorrow. I know we discussed this earlier but I raised a serious issue under section 14 and I sought time for its consideration.

Rory Kiely (Fianna Fail)
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There was a vote on the procedure for taking the Bill earlier and my hands are tied.

Question, "That the Bill be received for final consideration", put and declared carried.

Question proposed: "That the Bill do now pass."

Kathleen O'Meara (Labour)
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I thank the Minister for his approach to Committee Stage. We have had a good discussion on the amendments, although more time should have been made available. I look forward to future encounters with the Minister on legislation.

James Bannon (Fine Gael)
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I thank the Minister for taking the amendments in the manner in which he did. Will further amendments be made to the Planning and Development Act, 2000, as a result of the court decision—

Rory Kiely (Fianna Fail)
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The Senator is out of order.

Michael Kitt (Fianna Fail)
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As spokesperson for the environment, I also thank the Minister. This is a good Bill and I am glad he has listened to our contributions. Like him, I hope it will lead to an increase in the supply of houses, an objective on which all of us are agreed.

Martin Cullen (Waterford, Fianna Fail)
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I thank all the Members for their most interesting contributions. As a principle, having dealt with much legislation over the years, it is not my preferred option to rush it. I have a healthy dislike of doing so. Unfortunately, there was a time limit on this Bill which was beyond my control. We had to deal with it in the way we did.

Notwithstanding one or two reservations, we have had a very good discussion and we will obviously return to the issue of planning and other matters over the next year. We will begin to see the effects of the legislation. I thank my officials for all their work.

Question put and agreed to.