Seanad debates

Tuesday, 4 July 2006

5:00 pm

Photo of David NorrisDavid Norris (Independent)
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I welcome the Minister of State to the House. He is a just and decent man and this is a case of clear and flagrant injustice. I hope the Minister of State may be able to rectify it in some way. It concerns an interesting property on the Dublin quays. It is about the only early 18th century house left in that range of buildings. It is used as a post office and my informant's family has lived there since 1913, so there is a long family tradition. The Minister of State will be aware of the living over the shop scheme tax incentive. I was involved in it in a small way through the Dublin Chamber of Commerce. It was a useful scheme because it helped to bring life back into the city and encouraged people to improve their premises. This property was designated for the tax incentive. The family applied and in 2004 obtained full planning permission and a full, first-stage certificate from Dublin City Council assuring them that development was compliant with the objectives and the criteria of the scheme. On the basis of that certification my informant and his family borrowed far more than their income would normally sustain to fund the work. However suddenly, just after Christmas, they were told by the Department of the Environment, Heritage and Local Government that it would not issue them with a certificate of reasonable cost, which is necessary for the application to be successful, because the floor area of the residential portion of the building was too large. I have come across this before and it is terribly silly. If our objective is to preserve these buildings and make it possible for people to live over the shop we must recognise that Dublin is a Georgian city and the spatial dimensions are different and need to be respected. To put this kind of qualification in, to fail to notice it until a person has borrowed money and invested heavily, is unacceptable.

I have the name of the inspector and can pass it on to the Minister of State so that he can know this is not a wild claim. The application was submitted in 2004 and the inspector accepted that the costs were reasonable and that the work was being carried out to a satisfactory standard. However, after a site inspection in January 2006 he suddenly raised the issue of the floor area, although following a previous inspection in October 2005, no such concerns were expressed. My informant was placed in a false position. His application was properly made, he was told he met all the criteria and no question was raised at the initial inspection in October 2005. Yet suddenly, when he had borrowed the money and just about completed the work, he was told the floor area is wrong. Naturally the man and his family were surprised and devastated that this decision was made after they had almost completed the work and incurred the expense. In a human sense that is terribly unfair on decent people trying earning a living. The authorities had advised them to proceed. As full planning permission had already been obtained before the granting of the first-stage certificate by Dublin City Council, the scale of the development was clear. The council had the full planning permission, it knew the floor area, but did not raise it on foot of the drawings or the first inspection in October 2005. Suddenly when the money was all borrowed and spent, the council told the family there was a problem. That is not good enough. The Department of the Environment, Heritage and Local Government told them that while it is supposed to inspect the building before the work started, it often did not manage this and preferred to inspect closer to completion. It advised them to go ahead with the work provided they could justify the costs. It did not raise the issue of the area of the house or indicate that this might be a problem in any way.

I understand that this case is completely unprecedented in its severity. No local authority has granted a certificate for a development which the Department of the Environment, Heritage and Local Government subsequently refused to do. They have also been informed that no formal procedure exists for an appeal or review of the situation. I tabled this matter on the Adjournment because this is the only means of recourse to justice for these people.

The building is a protected structure, the only pre-20th century building to survive on Usher's Quay. It dates from before 1730, contains elements of much older buildings in its fabric and is possibly the oldest building on the south quays. It also forms the only surviving element of a 1916 battle site as the original Nos. 1 to 4 were destroyed by artillery fire. The building has been in use as a post office for over a century and has been operated by this family since 1913.

A considerable portion of the costs involved in the renovation was spent on structural works as the building was in a poor structural condition. This was in no small part because an elderly relative who lived there was reluctant to invest because Dublin Corporation had threatened a compulsory purchase order for a road widening scheme. The machinations of our city authorities have had a considerable impact on this family. I do not suggest there was any evil intent but this is an innocent family running a business we all need, namely, keeping a post office going in an area where it provides a community service, and post offices are regularly closed down. The family lives over the shop, an objective of everybody in the city, and is being frustrated in its effort to restore an important 18th century building.

The building is laid out in a small number of large rooms, rather than the converse and that seems to be the problem. If that is always to be the case no Georgian building will receive this kind of grant and I cannot believe the Government intends that to be so. The accommodation comprises one single and two double bedrooms. Subdivision of the residence to create multiple units would involve the destruction of much of the Georgian and Victorian internal fabric of the building and replace the 18th century floor plan with cramped and oddly proportioned rooms.

The family intended to restore the only 18th century building to remain on this part of Dublin's quays in the spirit of its original use as a family home. It feels it has acted in good faith and in reliance on the certificate which was provided by Dublin City Council. As the living-over-the-shop scheme requires that all qualifying work be completed by June 2006, it incurred the full cost of the renovation rather than seeking to make the work more affordable by phasing it in. As a result it is in a much worse financial position than had it never been accepted for the scheme. The family has not undertaken a commercial development but the renovation of a house where generations of a family have lived. If it is denied the living-over-the-shop tax relief it may be unable to sustain the financial burden of living in its home.

This jeopardises the existence of the post office too. This is an awful situation in which people were misled into believing that they would get a grant. The family borrowed substantially, did exactly the kind of work we want and at a late stage the approval was withdrawn. I appeal to the Minister of State instead of penalising these decent people to attempt to find some mechanism whereby they will not be driven out of their business and home and an important social amenity for the community in this part of Dublin's inner city is extinguished.

Photo of Noel AhernNoel Ahern (Dublin North West, Fianna Fail)
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This tax incentive scheme was introduced in 2001 and is strictly governed by the statutory requirements of the Finance Acts of 1998 and 2001. This scheme involves certification of compliance with the scheme conditions, as opposed to the issue of a grant.

The main aims of the scheme are as follows: to apply an integrated package of tax relief to secure investment and tackle the problem of vacant upper storey space over commercial premises in certain streets in the five borough areas of Cork, Dublin, Galway, Limerick and Waterford; to provide additional residential units in such areas; to achieve greater economic use of such premises with a view to relieving the pressure on housing supply, particularly for rented residential accommodation; to promote sustainable development patterns and assist in fostering a "living" urban environment in the targeted areas; and to promote more sustainable use of existing building stock and infrastructure and relieve pressure for green-field development. The tax relief is based on expenditure incurred by applicants on the construction or renovation of property which is located in these designated areas.

A certificate of reasonable cost issues where the house meets the conditions and standards specified by my Department which requires, inter alia, that the floor area is not less than 38 sq. m. and not more than 125 sq. m. and the construction complies with the building regulations. Such a certificate alone does not certify that applicants are entitled to tax relief, as entitlement depends on compliance with other requirements of the relevant tax legislation. However, a certificate of reasonable cost or compliance is required as evidence of expenditure by the inspector of taxes where a tax relief application is made.

My Department received an application for a certificate of reasonable cost under the living over the shop scheme, in respect of the property mentioned at Usher's Quay, Dublin 8, on 4 July 2005.

Photo of David NorrisDavid Norris (Independent)
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Exactly a year ago.

Photo of Noel AhernNoel Ahern (Dublin North West, Fianna Fail)
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Yes. Prior to submitting this application the applicant would have received formal notification of planning approval and first stage consistency certification from Dublin City Council.

An on-site inspection of the property on 31 January 2006, when all works had been completed, found that the floor area measured 180 sq. m. which is in excess of the maximum allowable under the terms of the scheme. A certificate of reasonable cost cannot issue in this case as, contrary to the conditions of the scheme, the floor area exceeds the maximum limit of 125 sq. m. If the applicant in this case wishes to appeal the decision of my Department in not granting certification on the basis of the measured floor area and has appropriate documentation to justify such an appeal, a further inspection will be arranged to establish if the property, as built, satisfies this cornerstone requirement of the scheme.

I appreciate the Senator's point. The area as he describes it sounds interesting and one wonders about the various stages of this process. I did not expect to be in this House for another hour or two and thought I might use that time to clarify one or two thoughts that strike me as I read it. This matter has arisen in a parliamentary question in the Dáil but the Department's response is very definite. I will get a copy of the Senator's speech to try to tease out whether there is any doubt or wrong on the Department's side.

While the Senator's contact does not want sympathy, this case seems unfortunate. I do not know how one can go about lodging an appeal or alter the space.

Photo of David NorrisDavid Norris (Independent)
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That would ruin the property.

Photo of Noel AhernNoel Ahern (Dublin North West, Fianna Fail)
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I am not sure whether the space is required to be an effective living area, and excludes lobbies or corridors and so on. If the discrepancy in measurements were only 2 or 3 sq. m. the family might be able to shake that out. It is a long way from 180 sq. m. to 125 sq. m. The Department seems resolved that all the conditions have not been fully complied with. I do not know whether that should have been obvious at all stages. The earlier inspection seems to have been of a building only. Maybe the plans showed everything. Maybe the planning permission did not cover the drawings of the interior.

The option of an appeal, provided it can be backed up with documentation, seems to exist. I will get a copy of what the Senator said. The Department has considered this and it does not comply. I will make some inquiries about it. The applicant, however, could prepare the appeal with the guidance of the relevant people in Dublin City Council and elsewhere.

Photo of David NorrisDavid Norris (Independent)
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I thank the Minister of State for his flexible approach on this matter. I notice that in his prepared script he avoided mentioning the earlier meeting altogether. The objective of the city council is to preserve these buildings. The floor area requirement is a complete nonsense as far as 18th century buildings are concerned. I do not know how they can meet that requirement, but they have met every other criterion. They have also been misled. Is the Minister of State prepared to meet the family in question?

Photo of Noel AhernNoel Ahern (Dublin North West, Fianna Fail)
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I do not think that should be the first thing to be done. The application and the work have to be done in accordance with rules and regulations. It is not for me to wonder why the 125 sq. m. requirement is in place. If rules are in place, we have to comply with them. I fully accept that the person Senator Norris is representing might have had a legitimate motivation for what he was doing. The living over the shop scheme has not been a significant success, generally speaking. Everyone thinks it is a marvellous bloody idea, but they do not seem to be taking it up.

Photo of David NorrisDavid Norris (Independent)
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The one person who has taken it up is being penalised.

Photo of Noel AhernNoel Ahern (Dublin North West, Fianna Fail)
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I share that perspective on the matter.

Photo of David NorrisDavid Norris (Independent)
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Yes.

Photo of Noel AhernNoel Ahern (Dublin North West, Fianna Fail)
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I would like to be sending out very positive signals, but rules are rules and I do not know how we can overcome them.

Photo of David NorrisDavid Norris (Independent)
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I am sure they can be overcome with a bit of imagination.

Photo of Noel AhernNoel Ahern (Dublin North West, Fianna Fail)
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I would like to see a more forensic examination of the different phases of the process, although the Department is trying to say the answer is "Sorry, but we cannot help".

Photo of David NorrisDavid Norris (Independent)
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If there is any way the Minister of State can use his good offices, I would appreciate it.

Photo of Noel AhernNoel Ahern (Dublin North West, Fianna Fail)
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I will try, but I am making no commitments. Rules are rules. I am afraid I am bound by them.

Photo of David NorrisDavid Norris (Independent)
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I understand.