Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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42. To ask the Minister for Housing, Planning, Community and Local Government the options available to local authorities when negotiating with private developers on the social housing Part V component of private developments; the way in which local authorities may be able to increase the social housing component beyond 10%; the way in which a reasonable profit for the developer will be established; the cost of the Part V agreed; and if he will make a statement on the matter. [28691/16]

Simon Coveney (Cork South Central, Fine Gael)
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Under the amendments to Part V of the Planning and Development Act 2000 made by the Urban Regeneration and Housing Act 2015, the options for a Part V agreement, with effect from 1 September 2015, are as follows:

1 Transfer to the ownership of the planning authority of a part or parts of the land subject to the planning application (section 96(3) paragraph (a));

2 Build and transfer to the ownership of the planning authority, or persons nominated by the authority, of a number of housing units on the site subject to the planning application (section 96(3) paragraph (b)(i));

3 Transfer to the ownership of the planning authority, or persons nominated by the authority, of housing units on any other land in the functional area of the planning authority (section 96(3) paragraph (b)(iv));

4 Grant a lease of housing units to the planning authority, or persons nominated by the authority, either on the site subject to the application or in any other area within the functional area of the planning authority (section 96(3) paragraph (b)(iva));

5 A combination of the transfer of the ownership of land under paragraph (a) of section 96(3) and one or more of the options set out at 2-4 above, and

6 A combination of the options set out at 2-4 above.

Where the developer chooses option 1, this option must be accepted by the planning authority. The price to be paid for the land is its existing use value on the date planning permission for the development was granted.

Where any other option is pursued, the net monetary value to be achieved by a local authority must be equivalent to the difference between the market value and the existing use value (on the date planning permission was granted) of the land that would have been transferred if the agreement had provided for the transfer of land.

The construction costs to be paid to the developer in respect of units acquired are set out in section 96(3)(d)(ii), i.e.

"the costs, including normal construction and development costs and profit on those costs, calculated at open market rates that would have been incurred by the planning authority had it retained an independent builder to undertake the works, including the appropriate share of any common development works, as agreed between the authority and the developer."

It should be noted there is no specific provision made for developer’s profit as such. The section refers to the cost that would have been incurred by the local authority had it retained an independent builder to undertake the works i.e., builder’s profit. This should be a reasonable profit, determined by reference to prices for work pertaining to competitive tenders for similar work current in the locality. Housing Circular 28/2015 issued by my Department to each local authority on 17 July 2015 sets out unit cost ceilings to assist local authorities in this regard.

As regards increasing the social housing component beyond 10%, local authorities and Approved Housing Bodies can and do negotiate with developers – with funding support from my Department - where they wish to pursue options for additional housing units in a new development over and above the units being made available via the Part V obligation. In such cases, it will always be a matter in the first instance for a local authority to assess such options on the basis of a number of criteria including suitability for social housing, tenure mix considerations and value for money.

I also refer the Deputy to the reply to Question No. 146 of 28 September 2016 regarding guidance issued by my Department to local authorities on the provisions of Part V.