That leave be granted to introduce a Bill entitled an Act further to regulate in accordance with the principles of social justice and to delimit by law the exercise of private property rights, insofar as such exercise gives rise to the assessment of compensation payable by local authorities in respect of the compulsory acquisition of development land, with a view to reconciling the exercise of those rights with the exigencies of the common good, and to provide for related matters.
Ireland’s housing crisis, as we all know, is out of control. For far too many people, the basic human need of shelter is not being met through absolutely no fault of their own. However, it is the fault of the ideologies of Fine Gael and Fianna Fáil, which are wedded to the concept of the market. We want to address that through this Bill. Fine Gael and Fianna Fáil have demonstrably failed repeatedly to build the housing our citizens need in the right place, at the right price and in the right quantity.
The crisis is touching every demographic, can be felt across the country and has victims numbering in the hundreds of thousands. Housing has become too costly, too scarce and the ability to buy a home has become the privilege of too few. The time has come for radical action and in the absence of the Government taking any such action, it is up to others to step in.
Today the Labour Party is doing just that. We are taking radical action by introducing a radical Bill.
This Bill will tackle land hoarding, end speculation on land and reduce the cost of newly built houses by tens of thousands of euro by doing once and for all something for which many of us have called for many years, namely, implementing the central recommendations of the Kenny report of 1973. This Bill will give the power to local authorities to compulsorily purchase development land at its existing use value plus 25%, rather than at market value. Based on data from the Society of Chartered Surveyors and the CSO, we estimate that if implemented, this Bill will reduce the cost of a new three-bed semi-detached house built on a greenfield site in the greater Dublin area by circa €30,000. By finally implementing the Kenny report, which has been blocked by Fiann Fáil and Fine Gael for 48 years - a length of time that is hard to believe - this Bill will effectively eliminate the ability of land speculators to pocket enormous profits. A senior counsel has given the legal opinion that this Bill is entirely constitutional so any arguments put forward that it is not do not stand up.
This is the Labour Party's third attempt to enact the recommendations of the Kenny report, the late Gerry O'Sullivan having previously brought forward a Bill in 1990 and former party leader, Eamon Gilmore, having done so in 2003. Despite boom, bust and boom again in the housing market, the housing needs of an ever-growing number of people are not being met. The housing system is one of winners and losers. The winners are landlords, investment funds, REITs, property speculators and developers, while the losers include the homeless, people on low incomes, first-time buyers, tenants and people with special needs. This radical land Bill - and it is very radical - will knock tens of thousands of euro off the price of a new build and will also be a big help to people trying to save for a home of their own. It will eliminate speculation on development land and go a long way towards getting more supply on stream, by hitting land hoarders and speculators where it hurts. It will also aid local authorities in their work.
That said, this Bill is not a silver bullet and should not be seen as such. For legal reasons, a grandfather effect must be included, which means the Bill will only apply to land bought after tomorrow, or from when it is implemented. However, that is no excuse for delay. To paraphrase a Chinese proverb, the best time to implement the Kenny report was 1973; the second best time is now. The National Economic and Social Council recently concluded that the core principles of the Kenny report remain as relevant today as they were in 1973. Blockages on the supply side include the slow release of land for development. With excess demand, property developers can control prices and secure supernormal profits in a cartel-type situation. This Bill is not a panacea but it would be a big step in the right direction and would push land hoarders and speculators to build housing on both the greenfield and brownfield sites they have acquired. That in itself will release more development land and reduce prices. Giving compulsory purchase powers to local authorities at existing use prices plus a gratuity of 25% will also make a massive difference in reducing the land cost of newly built units.
The housing crisis is as bad as it is as a result of political decisions, primarily those of Fianna Fáil and Fine Gael. We also need action from them to protect renters by freezing rents, as well as building tens of thousands of social and affordable housing units and stopping investment funds from gazumping first-time buyers. These are all political choices the Government could make but it is refusing to do so. This Bill is no different. Given how serious the housing situation is, the skyrocketing rents, the endless homeless crisis and all the other dysfunctions in our housing system, surely the time has come for radical action, and that is this Bill. The time for implementing the Kenny report is now and that is why I am putting this Bill before the House.