I move: "That the Bill be now read a Second Time."
A simple argument underpins this Bill and our broader approach to addressing the housing crisis. It is that the State has to step up to the mark to provide affordable homes for purchase and rent using all the means at its disposal. A good home provides shelter, stability and a safe location. It should be the launch pad for life's adventures and a refuge from its storms. The bricks and mortar of a solid home are the cornerstone of a good life. Owning one's home or having a cost-rental unit is the surest route to achieving those modest but vital aims. However, an ongoing affordability crisis has reduced home ownership rates to historic lows and increased the age of the average first-time buyer by almost a decade to 35 years of age. Ireland has plummeted from being a world leader to below the EU average rate of home ownership. For an entire generation, owning their own home is slipping through their fingers as they pay unprecedented levels of rent or languish at home saving every cent they can. A generation is caught in a rent trap and the Government and I want to give them hope and to reverse the decline.
The Land Development Agency, LDA, is an important step change in how we address the housing crisis by ensuring we make the most of all State lands to provide affordable homes for purchase and rent and take a strategic land management approach to the future. If the central promise of democracy is that each generation will be better off than the last, the current housing crisis represents a fundamental threat. In an era where the waves of dangerous populism are hitting the shores of established democracies, we need to keep our democracy strong and vibrant. The housing crisis creates an unstable system of haves and have-nots that reaches deep into the fundamentals of our society. Building a system that gives each citizen a clear stake in its prosperity is a Government priority. The struggle to boost home ownership levels and provide cheap, reliable reasonable rent is a core part of that effort to ensure politics delivers for all, including working people.
I am committed to pragmatism over dogmatism and ideology and will leave no stone unturned in addressing the housing crisis. The LDA is part of a comprehensive set of measures. In 2021, backed by the largest housing budget in the history of the State, we have the most ambitious social housing programme on record and we will start building new ladders of opportunity for young people caught in a rip-off rental market. It involves a sweep of proposals, not a silver bullet fantasy with more than €620 million of affordability measures alone. We are introducing a new equity scheme where the State will take a stake in one's home, lowering the mortgage costs, bridging the affordability gap and activating supply on existing planning permissions.
There is a new affordable purchase scheme with the State directly building affordable homes at scale on State-owned land. There is a retained and expanded help-to-buy scheme and our first ever national cost rental scheme with tenants getting keys this year, 2021. Today's Bill is an important part of those measures that has the dual goals of fully utilising State-owned lands to tackle the housing crisis and leading in strategic planning to build affordability into our housing system.
I will address both legitimate concerns and unfounded criticisms around the Bill to dispel any uncertainty and directly tackle any misinformation. Our politics needs to be better and our citizens deserve more than tired dogmas and empty slogans.
One is that the Land Development Agency will pay market value for State land which will drive up house prices. This is not true. The LDA will pay the affordable land value, not the full market value. The value is effectively set by the Minister for Housing, Local Government, and Heritage, which is me, by requiring a specific percentage of land to be used for affordable housing at prices the Minister will also set. The State bodies and agencies covered by this affordability requirement process are set in the Schedules to the Bill. The Valuation Office sets the specific price based on that affordability process. In Dublin city, for example, I expect this to be 100% social and affordable, so the land price will be minimal. The market value process in the Bill is in keeping with EU state aid requirements but it is fundamentally shaped by the affordability requirement. It is important to note that often land will not be transferred to the LDA at all as it will develop it on behalf of councils or other State agencies. I expect this to often be the case with local authorities as we can already see in Shanganagh and other sites under the control of the Land Development Agency.
Another criticism has been that the Bill is the same as the 2019 version. It is not. This Bill reflects the priorities for the LDA in the new programme for Government and also takes into account the report and recommendations of the pre-legislative scrutiny of the initial general scheme of the Bill in the last Dáil. There are a number of key changes to the original land development agency Bill published in 2019 and I will cover some now. There is a complete flexibility on affordability requirement with 100% social and affordable in suitable areas. The original Bill fixed it at 40% with 60% private. There will be clarity on transfer of State lands and first refusal for the LDA in this Bill but it was not in the 2019 Bill. There are clear compulsory purchase order powers in this Bill but there were none in 2019 Bill. In this Bill, the LDA is subject to freedom of information and enhanced Oireachtas committee accountability, an important measure which was not included in 2019 Bill. There is a stronger commitment to sustainable communities and best environmental practice. There is greater clarity on EU state aid compliance.
Another criticism has been that just 50% of developments will be affordable and the LDA is backdoor to privatisation. This is completely untrue. The 50% is a baseline requirement in the Bill to act as a guide. The Minister has full flexibility to set affordability to up to 100% affordable and social. Rather than apply a rigid one-size-fits-all approach to everywhere, this flexibility helps to future proof the Bill and gives me and any future Minister the scope to adapt to the specific needs and circumstances of an area. In cities like Dublin I expect it will be 100% affordable and social but in some regional towns it might be more suitable to allow for private development to ensure tenure mix. We need real affordability and flexibility for local needs, not old, untrue privatisation slogans pretending to be policies.
Another claim is that there is a weak definition of affordability in the Bill that will drive up prices. That is not true. The Bill defines affordability as being below the median market rate. This broad definition is in place to allow me to set specific rates for each geographic area by regulations. This means the Minister sets out what is an affordable price to buy or rent based on each area. This flexibility will accommodate local needs and is a key feature of the Bill rather than a one-size-fits-all approach. It also ensures future changes do not need to be made via a slow legislative process.
Another comment made is that the LDA is bypassing local councils to get council land. That is not true at all. The first refusal for the LDA would only arise where the local authority has decided not to develop the lands for its own functions. Section 183 of the Local Government Act will not apply to avoid duplication of processes arising which could delay the delivery of homes on local authority lands. Section 183 remains in place for all other land disposals. Bypassing section 183 will only be used in limited circumstances where agreement on lands is not possible. The majority of the LDA's work will be in co-operation with local authorities, which will maintain a central role in delivering housing. This is an important point. Local authorities will remain at the heart of providing homes it is my intention that the LDA will complement that work by providing services to build large, complex sites. I understand concerns about this provision and will review it annually to ensure it is working as required to speed up delivery but I am committed to avoiding delays and getting homes built.
Ultimately, the heart of this Bill is about ensuring that State lands do not lie idle in the middle of a housing crisis. That is something that all of us should be able to agree on. It is incorrect to state that the Bill has weak compulsory purchase orders powers that will undermine its strategic land management role. The Bill includes ransom strip compulsory purchase order powers unlike the original Bill, which had no such measures. This will allow the LDA to negotiate with landowners where necessary and to force compliance with its strategic plans should that be required. The CPO powers are in keeping with EU State aid rules and best European practice of similar agencies elsewhere, such as Freiburg in Germany that only uses compulsory purchase order powers in extreme circumstances. As the National Economic and Social Council has noted in its comprehensive work on the need for a Land Development Agency, the possibility of compulsory purchase order use is generally a sufficient basis to encourage negotiation and agreement between landowners.
It is not true that the LDA and its subsidiaries are not accountable or transparent. The LDA will be fully accountable to the Committee of Public Accounts, and will be subject to the Code of Practice for the Governance of State Bodies. The LDA's board will be recruited through the State boards process and the board members will have the required mix of qualifications. The accounts of the LDA and its subsidiaries will be subject to audit by the Comptroller and Auditor General and its records will be subject to the Freedom of Information Act. Prior ministerial consent will be required for the LDA to borrow, establish subsidiaries or enter into capital commitments. There is provision for ministerial direction to the LDA regarding strategic priorities.
As Deputies will be aware, there is a commitment in the programme for Government to extend the Register of Lobbying. It is my intention that the chief executive of the LDA and his or her senior executives would be designated public officials under the Regulation of Lobbying Act 2015, when the register is extended.
I will now outline the main provisions of the Bill. There are 10 parts to the Bill. Part 1, preliminary and general provisions, sets out the purpose of the Bill as well as providing key definitions for the Bill. Section 2 outlines the purposes of the Bill which in summary are to increase the supply of housing in the State. Section 4 provides the definition of relevant public lands and relevant public bodies which are key definitions for this legislation. Relevant public land is all land in a town with a population greater than 10,000 that is owned by a relevant public body. A relevant public body is a body listed in either Schedule 1 or 2 of this Bill. This part also provides that the Minister can issue directions to the LDA regarding the performance of its functions.
Part 2 deals with the establishment of the LDA as a designated activity company under the Companies Act. It will also facilitate a €1.25 billion equity investment in the LDA from the NTMA's Ireland Strategic Investment Fund. This Part also deals with the establishment of the board, appointment of the CEO and staffing matters. Section 13 sets out the functions of the LDA. The main function of the LDA is to develop and manage relevant public land and, where applicable, other lands for the provision of housing for the public good and in the public interest.
Section 14 provides that the LDA will provide services to local authorities when requested by such authorities to assist in the development of large-scale multi-tenure sites for housing and urban developments in population centres of more than 30,000 people. This will assist with the construction of increased amounts of affordable and social housing on local authority-owned sites and underpins the strong collaborative working which we have already seen between the Land Development Agency and local authorities to date.
Sections 17 and 18 provide that the LDA will be accountable to the Committee of Public Accounts and other committees of the Oireachtas. This is important as it will ensure transparency and accountability regarding the work of the LDA.
Section 20 deals with the staffing of the agency and also provides for the making of a superannuation scheme by the LDA.
Part 3 deals with the funding of the LDA. The National Treasury Management Agency (Amendment) Act 2014 will be amended to provide for the capitalisation of the agency through an equity investment from the Ireland Strategic Investment Fund, ISIF, of up to €1.25 billion. The LDA will also be able to engage in borrowing up to a limit of €1.25 billion. Ministerial consent will be required for that LDA borrowing. The initial shareholding in the LDA will be €100 million, with the Minister for Public Expenditure and Reform holding shares to the value of €99 million and the Minister for Housing, Local Government and Heritage holding shares with a value of €1 million. Part 3 also provides that the LDA will not be able to enter into capital commitments above a certain level without ministerial consent.
Part 4 provides that the LDA will be able to form subsidiary designated activity companies, DACs, for the purposes of carrying out its functions. These subsidiaries will be subject to the same level of governance and accountability as the LDA parent company and their published accounts will be audited by the Comptroller and Auditor General. The formation and winding-up of such subsidiaries will require the consent of both the Minister and the Minister for Public Expenditure and Reform in addition to the ministerial consents for borrowings and capital commitments by the LDA and its subsidiaries.
Part 5 deals with the dissolution of the existing LDA and the transfer of its functions to the new entity. Part 6 deals with financial reporting and the public accountability of the LDA. The accounts of the LDA and its subsidiaries will be prepared in accordance with the Companies Act and will be submitted to the Comptroller and Auditor General for audit. The LDA will also submit an annual report to the Minister for the group entity, including any subsidiaries.
Part 7 deals with the establishment of a public lands register and arrangements for the acquisition of land by bodies to the LDA. Sections 48 and 49 provide that the LDA will establish a register of relevant public land to identify land in urban population centres of over 10,000 people that may be suitable for housing. This register will be publicly available on the LDA's website. Public bodies will be required to co-operate with the LDA and the LDA will be able to request information from such public bodies in respect of relevant public land.
Section 50 provides that the LDA will report periodically to the Government with regard to land on the register and will include information on such lands assessed by the LDA to be fit for use for the purposes of this Act. Under section 52, the Government, having considered such a report, can direct that land of a Schedule 1 public body can be acquired by the LDA. Section 51 provides that where a relevant public body is seeking to dispose of land it must offer it for sale to the LDA in the first instance.
Section 53 provides that where the LDA is acquiring land from relevant public bodies under this Part, it will be acquired at market value, taking into account the fundamental requirement regarding the development of houses on public lands under Part 9. In effect this is an affordable land value which in reality will be a minimal price. Section 56 provides that where the LDA is acquiring land from a local authority under this Part, the provisions of section 183 of the Local Government Act 2001 will not apply.
Part 8 deals with compulsory purchase powers for the LDA. It is intended that the LDA will primarily purchase private lands for site assembly purposes through agreement with landowners. This Part provides that the LDA will have appropriate compulsory purchase order powers to purchase ransom strips of land where required for the purposes of its public functions.
Part 9 deals with the provision of affordable housing on relevant public land and former relevant public land. There will be a requirement for a proportion of housing provided on relevant public land to be made available for affordable housing by the agency or any other developer acquiring such land. Under section 73, the Government may exempt certain relevant public lands from these provisions where the land is owned by a body that is required to act in a commercial manner.
Section 75 provides that the Minister may set a percentage of housing higher or lower than the 50% level as set out in section 73 and may also set different percentages for different geographical or administrative areas, having regard to a range of housing-related matters and the achievement of the purposes of the Act. This will allow the percentage to be varied up or down to take account of local housing needs and market conditions.
Section 76 provides that houses provided under this Part shall be priced below the prevailing market price or market rent. It also provides that the Minister may prescribe a price or method for calculating the price and may set different prices for different geographical or administrative areas.
Part 10 deals with amendments to other Acts, including adding the LDA to the list of State bodies empowered to act as a development agency under the Planning Acts, which will permit it to develop planning schemes and enter into agreements with parties to develop strategic development zones. It does not confer any planning consent role on the LDA. This Part also provides that freedom of information legislation will fully apply to the LDA from the day of its establishment and also provides that records held by the dissolved LDA body will continue to be subject to such legislation. This will ensure the transparency of the LDA's operations.
Every Deputy is keenly aware of the scale of the crisis that confronts us. This is a state stepping up the mark. We have a moral obligation to put in place practical policies. We cannot let ideology get in the way of solutions or let one party's perfect be the enemy of the common good. I have directly addressed the criticisms of the Bill as best I can. I am confident that the LDA can play a major role in getting affordable and social homes built on State-owned land that is currently not in use. I call on all Deputies to support the Bill and to make sure we use every tool at our disposal to get bricks and mortar on the ground.
I look forward to our debate on the Bill. I hope Deputies will appreciate its importance and the need to enact it as soon as possible. I am sure they will. I will seek to respond to any specific questions and engage further on Committee Stage. I commend the Bill to the House.