The general scheme of the planning and development (No. 1) Bill addresses the following key issues: a review of Part V of the Planning and Development Act 2000; the proposed vacant site levy; reduced development contributions for planning permission yet to be activated; and modification of the duration of planning permission in certain circumstances.
I will outline CIF's views on each issue. The first key issue is a review of Part V. The general scheme provides that there is no longer justification for providing 10% of affordable housing under Part V of the Planning and Development Act. However, the requirement for 10% social housing is being retained. On-site provision of social housing is to be the predominant default option for developers and local authorities under the new Part V arrangements. The general scheme of the Bill provides that the alternative off-site option should only be possible in specific exceptional circumstances, for example, where there is insufficient social housing demand at the location of the proposed development and where there is greater demand in another location.
The definition of an existing use value is being modified to reflect the value prior to date of commencement of development and disregards the value of any buildings on the land that are to be demolished. In the past, planning authorities had the option of accepting a monetary payment as an alternative to land or social housing units from developers. It is now proposed that the monetary payments shall no longer be an alternative option for completed units or land.
CIF has long called for the review of Part V as it is not sustainable in its current format. It has previously advocated for the abolition of Part V in its current format, and its replacement with a 1% contribution by the seller in respect of every residential unit sold, both new and existing. In the case of new homes, this will be paid by the developer and in the case of existing homes, this will be paid by the seller. If a 1% contribution had applied in 2013, the measure would have yielded €61 million for the Exchequer. The revenue could have been used as seed capital to fund social housing programmes and could have been leveraged by the voluntary housing sector. For 2014, a levy of this nature would have yielded €81 million.
While the reduction in the new per cent rule to 10% is to be welcomed, the removal of the additional options for compliance with Part V, including monetary payment, is unreasonable and will ultimately be difficult to implement.
In the case of high-density residential developments where management charges apply, will local authorities be prepared to pay the management charges that will apply for these new developments to management companies? These charges could be in the region of €2,000 for each housing unit required under Part V. There will be many instances in which high-density schemes developed in the private sector may be unsuited to the requirements of local authorities. In this regard, the industry strongly advocates the retention of all the options for compliance with Part V, including delivery of units off-site and the payment of monetary compensation in lieu, which could then be used at local authorities' discretion in meeting social housing requirements.
With regard to the definition of "existing use value", the proposal to disregard the value of any buildings on the land that are to be demolished is unreasonable. The owner, in complying with the Part V requirement on lands, which includes existing buildings, should be compensated for the proportionate value of such buildings that must be demolished in order to meet the Part V requirement.
I will now deal with the vacant site levy. The proposed vacant site levy may be activated in respect of vacant or under-utilised sites where there is a failure to commence development authorised by a planning permission for a vacant or under-utilised site within three years of the granting of permission or to lodge a planning application in respect of the site within three years of the making of the development plan or scheme. While the logic of legislating for a vacant site levy is well understood, there are many genuine reasons a development may not commence within the stated timeframe of three years from the granting of planning permission, including economic and financial reasons. Where it can be proven that sustainable demand for the scheme granted planning permission does not exist or where it can be proven that the market value of the completed asset will be less than the all-in construction cost, there should be an exemption available in respect of the imposition of the levy.
I will now deal with the reduced development contributions for planning permissions yet to be activated. The proposed provisions with regard to the provision of reduced development contributions for planning permissions yet to activated are welcomed by the industry. This has the effect of reducing the bureaucracy associated with making new planning applications in order to get the benefit of reduced development contributions which have been adopted by local authorities. Notwithstanding this, the rates of development contribution applicable are still too high. The rates have not decreased in line with movements in the market valuation of completed developments. Local authorities must be urged to review further the development contribution rates currently applicable. There must also be flexibility to facilitate the payment of development contributions as revenue streams become available from the transactions of new development works.
The proposal to modify the duration of planning permissions in certain circumstances, involving the use of a use-it-or-lose-it approach for future planning permissions for housing projects for a period not exceeding two years, will result in difficulties in the industry. Generally speaking, planning permission is attached to land rather than an individual planning applicant. If planning permission of a particular nature is appropriate for a specific development, it should be appropriate for that development no matter who the ultimate developer of the lands will be. Introducing a provision of this nature may also prove problematic for some funders in that a new risk is being introduced from a funding perspective whereby the planning permission may have a reduced lifetime.
There are a number of other issues we would like to see dealt with in the context of the awaited planning Bill. We want a simplified process for changing planning approvals for house types approved in previous planning permissions; a simplified process, including a timeframe, for approval of planning compliance documentation submitted to planning authorities - this should involve a default process; a simplified taking-in-charge process, to include a default process; the enabling of planning permission where there is a deficit in environmental or wastewater services, subject to the availability of a connection agreement with Irish Water; provision for economic viability testing to form part of a planning process to facilitate the granting of planning permission where, for example, reduced densities or alternative house types are required; and a simplified planning processes for making amendments to strategic development zones. These are some of the issues we would ultimately like to see addressed in the context of new planning legislation.