JOINT COMMITTEE ON THE CONSTITUTION debate

Property Rights: Presentations.

Chairman

The first item on the agenda today is a presentation by the Workers' Party represented by Mr. Andrew McGuinness, Mr. John Lowry and Mr. Michael Finnegan. The visitors are welcome to our committee.

I must remind visitors that members of the committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice that members should not comment on or criticise or make charges against a person outside the House or an official by name in such a way as to make him or her identifiable.

I invite the group from the Workers' Party to make its presentation. We have received and studied its submission. At these oral sessions we allow groups six or seven minutes to make their presentations, maybe to synopsise what they have already sent in, then the members will proceed with questions which hopefully the group will be able to answer.

Mr. John Lowry

We thank the Chairman and members of the committee for giving us an opportunity to make an oral presentation. Our overriding concern is with the needs of those who at present are denied access to the housing market and to property rights. We do not believe that constitutional change is necessary within the present context. The Constitution already qualifies the provisions for private ownership by the needs of social justice and the common good as defined in Articles 43. 2.1° and 43 2.2°. Our concern is that thousands of citizens are denied a right to ownership of property and a home due to the control of land, its supply and pricing. Given the well-documented crisis in housing, and the inability of thousands of citizens to access the housing market, the Government should, without delay, introduce legislation broadly in line with the findings of the Kenny report.

We also intend to raise the issue of the appointment of a land regulator, the merits of a certificate of reasonable value and the case for a tribunal within the private rental sector.

Mr. Michael Finnegan

It has been recognised for many years that profiteering in land has been a problem. Back in the mid-1960s when the plan was to develop new towns to the west of Dublin, Myles Wright was employed as a town planner. In his report at the time, he pointed out the danger that profiteering would take place and advised the then Government that it should make some move against it. Dublin Corporation and county council bought up huge tracts of land and built up a land bank so as to provide housing for their citizens in the foreseeable future.

In 1973, the Government set up a commission under Mr. Justice Kenny to look at the land prices and profiteering taking place with them. While a recommendation was made by Mr. Justice Kenny, it was a minority recommendation. He recommended that land prices should be set at cost value plus 25% as a disturbance fee. He did not think there was any need for an amendment to the Constitution. He felt it could be done through legislation The Workers' Party still feels that the issue can be dealt with through legislation.

This issue has been debated over the past 40 years and successive governments have failed to deal with it. We have seen since the early 1990s a small group of people - certainly less than 20 - having complete control over the lives of thousands of our citizens through ownership of land, particularly in the greater Dublin area. They have controlled the market by drip-feeding the land onto the market, controlled prices and, consequently, the number of houses available.

The whole issue of the cost of land for housing is felt to be corrupt at the planning process stage. If the huge profits gained arising out of land rezoning, particularly in County Dublin, had been controlled we would not have had the scandals that were highlighted at the tribunals. Deputies, former Ministers, councillors and local authority officials have been accused of accepting bribes. The reason for that is the huge profits being made on land costs. As John Lowry pointed out, thousands of our citizens have been denied the right to own property or a home.

The argument for a regulator covers many aspects of housing. As a trade union official in the construction industry for more than 30 years, I have seen the quality of life for thousands of people affected by the failure of builders to complete estates. They have forced people to move into houses that were not properly finished. This was exposed in the 1980s in a massive housing scheme in Tallaght by RTE and various newspapers. We have seen houses go on the market at 9 o'clock in the morning for "x" price and by noon they have been increased by €20,000 to €30,000 without any reason. Equally, we have seen in cases where houses were not selling, the price dropping by €10,000. When 40 or 50 houses were sold, the price would increase by another €40,000 or whatever. There was a requirement for a certificate of reasonable value from the 1970s right into the 1980s and, possibly, the 1990s, in order to qualify for the first-time buyer's grant. It recognised factors such as the price of a site, labour, materials and a fair profit for the builders so they could invest in further development. If we had that again, it would stop what is known as gazumping or robbery and the shoving up of prices for no reason. There is no reason to increase the value of a house between 9 o'clock in the morning and 12 o'clock by €20,000 other than they are selling many of them.

Overall, we have planning corruption, the undermining of democracy at local authority level and huge profiteering. There is huge wealth being made out of the basic right to own a home. We have seen, when local authorities build roads and schools under the national development plan, groups of people demanding exorbitant prices for pieces of land for development. We believe legislation should be introduced now to control this. There is no need for an amendment to the Constitution. This is a deliberate ploy by the Government, as it has been by governments for the past 40 years. It will be an embarrassing issue to raise in the forthcoming local and European elections.

Mr. Andrew McGuinness

In the context of our Constitution, social justice and the common good, we have to take it in the present day and what is happening in society. First, we are experiencing one of the biggest housing crises since the 1960s. Local authority housing lists increase daily. Coupled with this, we are seeing an increasing number of families being housed in unsuitable bed and breakfast accommodation. According to some estimates, 12,000 children leave such conditions for school each morning. The private rented sector is unregulated. While we welcome the Government's proposals to introduce some form of regulation, it will not provide security or a platform where citizens can plan for their future. The accommodation provided in some of these cases is substandard and would fail to meet the minimum safety standards.

The failure to regulate the cost of land has generated windfalls for some, while exasperating the problems of others who cannot afford a house. A rent tribunal's remit would be to set a fair rent at a fair price, establish the right of security of tender and ensure the dwellings are not substandard. This can be all done with the establishment of a rent tribunal.

When we look at the Constitution, we have to ask ourselves exactly what is being done? Are we protecting the rights of individuals or denying rights to many citizens? It is estimated that 60% of people employed in Ireland are on the average national income of €11 an hour. This works out at €440 for a 44-hour week or an annual income of €27,500. If we were to take that figure when buying a house, two and a half times that income will allow €57,000. With a partner's income, it can go to the €80,000 mark. Today for €80,000 one would be lucky to get a mobile home let alone a home. The average mortgage is about €133,000. When asked, couples say that their parents are supplementing the affordability of a house, which means parents are now re-mortgaging their homes to subsidise accommodation for members of their families. We must ask ourselves questions about this and introduce legislation to control the problem.

Deputy P. Power

I welcome members of the Workers' Party to the meeting to discuss the private property provisions in the Constitution.

In his contribution Mr. Finnegan reiterated a statement in the party's submission, that the Constitution supports his demand and that the Government must enact, without further delay, legislation. He set out what should be contained in the legislation. However, the document does not set out precisely what underpins that contention. Can Mr. Finnegan explain in detail why that is his contention? That is what we must decide and we would be grateful for his views.

The report envisages the establishment of a residential housing lands regulator. Can Mr.Finnegan elaborate on what activities that regulator would engage in to regulate the price of land in practical terms? What would the office do on a day-by-day or month-by-month basis? He mentioned a certificate of reasonable value which is usually associated with previous taxation provisions such as the first-time buyers' grant. Can Mr. Finnegan elaborate on how such a certificate would work?

Mr. Finnegan

The certificate of reasonable value, while it did not have a huge impact, would be a means of preventing what is commonly known as gazumping - where the price of houses are shoved up. The prices should be tied into the cost of materials, site and labour with a reasonable profit for the builder - normally seen as 33%. Price control has operated in other areas and it should operate in the housing market and builders should have to justify why they charge so much for an apartment or house.

It is true to say that in the past it was tied into the grant system and that was badly abused by builders at the time. I recall well when the £1,000 grant was introduced a builder I was dealing with at the time instructing his workers to increase the price of the houses by £1,500 the day after its introduction. When he was asked who would pay for it, he said the Government would. Therefore, I do not know if grants have worked.

People involved with new areas in Dublin have seen tremendous abuse of citizens by builders walking away from incomplete estates, leaving houses far from finished, and getting planning permission to carry on building elsewhere. They have also been involved in the piecemeal releasing of land onto the market. The Minister proposed some three or four budgets ago to introduce a penal capital tax of 60% on land which people held. It was never implemented. I would see a regulator's office being involved in land supply, the design of houses and the planning process. Tremendous abuse has taken place, particularly in County Dublin, and this has badly affected the quality of life of tens of thousands of people. The Lucan-Clondalkin area is an example. The rental sector should also be addressed.

We must accept that Mr. Justice Kenny knew something about the law as a judge of the Supreme Court, and he did not believe there was a need for an amendment to the Constitution to deal with this problem. I would take his word against that of people who argue we need an amendment.

Deputy Neville

I thank the delegation for the contribution.

I am not saying whether I agree or disagree with the delegation at this stage, but am I correct in interpreting their contribution as regarding this committee and its work as a smokescreen for inaction on controlling these problems?

Mr. Finnegan

Members know more that I about the Oireachtas and how it works. However, the greatest way to avoid doing something is by setting up a committee or publishing a Green or White Paper. Nonetheless, I believe the committee can do valuable work.

Deputy Neville

We are charged with examining the Constitution.

Mr. Finnegan

It is our belief that legislation could be introduced and one of those 15 or 16 people who own all the land could be challenged. It is a hugely powerful group. We have seen the social housing provisions shafted by it. We hope the committee would recommend that there is no need for an amendment.

Mr. Lowry

On the constitutional provisions, the remit of this committee is wider than the provisions we are dealing with at present. However, we believe it is clear within the Constitution that the basis exists for introducing legislation to deal with the crisis in housing and how that relates to private property rights and the ownership of land. Notwithstanding the provisions in the Constitution which enshrine the rights to private property and the protection of those rights, it is clear in Article 43.2.2° that the State may, as the occasion requires, delimit by law, the said rights with a view to reconciling their exercise with the exigencies of the common good. Politically we must all accept that the case has been well made and documented by many people, including those most closely involved with the housing issue, that we are facing a crisis in that many thousands of citizens face real obstacles in their ability to become property owners by way of owning their home.

At present, the provisions relating to land, the pricing of land, the control of supply of land actively stop and prevent thousands of citizens from accessing the right to a home. In that context, we believe that legislation is necessary by way of a regulator, for example, to examine the whole issue of land control, supply and pricing to ensure that such people are afforded the opportunity to own a home. That is a political question and, in that sense, we say that the establishment of a committee to look into this may well be an unnecessary delay, as Mr. McGuinness has said. For example, this issue was looked at some 25 years ago by Mr. Justice Kenny, who made comment on it then. Things have not changed in any sense since then.

Senator Tuffy

I thank the Worker's Party for its contribution. I would remind them that a delegation from the IAVI before the committee last week said there was no hoarding of land or drip-feeding of housing land which the delegation identified and that it is simply a matter of increasing the supply because demand is not being met by it. The IAVI contends that if one increased the volume of zoned land, it would help to ease the problem.

Does the delegation have examples it could identify to the committee of land being hoarded or drip-fed?

Mr. Finnegan

All you need do is look at your own area. The landowners there certainly controlled the number of sites that went on the market in any given year by selling them off to small builders. It is fair to say that those small builders were making a very modest profit, but the landowners were making a huge one, and they controlled how many sites were sold in a year and how many were not. That is in your own back yard, Senator Tuffy. I have no doubt that the group that you mentioned said what it believed. It is certainly the belief of the Irish Congress of Trade Unions, unions dealing with the construction industry and many more people that there is clear evidence that land has been hoarded. Speak to any small builder, and he will tell you that he can only buy so many sites in a year.

Mr. Lowry

My honest answer is that we had not considered that. Perhaps we should do so.

Senator Daly

I would like to follow up the point raised by Deputy Power about the establishment of the housing regulator. How would that office differ from the housing authorities of the local councils under the Department of the Environment and Local Government? Could the Department, through the housing authorities, achieve the same results as the delegation has in mind? Could the delegation give us an idea of what powers, functions and duties that regulator would have?

Mr. Finnegan

It is important to understand that we now have regulators in a whole range of areas, transport being but one.

Senator Daly

Though not very successful.

Mr. Finnegan

In housing, particularly in the greater Dublin area and Cork - any of the large cities - the hoarding of land must be investigated. The local authorities have failed to deal with the private rental sector, as has the Department of the Environment and Local Government. The issue is how the consumer, the house-buyer, is treated. I can think of such places as Kilnamanagh being built, west Tallaght, and huge estates in Clondalkin, Lucan and Blanchardstown. Developers ride roughshod over the consumer, the house-buyer, leaving estates totally unfinished with uncompleted houses. They move on and get planning permission for other estates in the same local authority area. Setting fair rents would probably be a matter for a tribunal.

On the whole question of planning we need someone. I know that the Minister probably has the power to overturn planning permission, but I do not think it has ever happened. Rezoning has totally undermined local democracy in the area of Senator Tuffy and myself. The regulator should have the power where plans have been drawn up by local authorities and then blown to smithereens by corruption or whatever one wishes to call it. We have seen local authority officials, councillors, Ministers and Deputies go along with that. In the broad area of planning, rent, protecting the needs of the consumer, the regulator could do a good job.

Chairman

The delegation mentioned on a few occasions the problems with unfinished estates. Surely under the enforcement sections of existing legislation each local authority has ample powers? Perhaps they are not enforcing them.

Mr. Finnegan

Be the legislation as it may, one can only go by it.

Chairman

The reason I mention that is that the Ombudsman also drew attention to the problem, saying that planning conditions were not enforced. At the same time, each local authority has an enforcement section with very strong powers. Is it the case that they are not using them? Are they standing back?

Mr. Finnegan

I imagine that it has been the experience of everyone around this table who has been involved with people or associations over many years that those powers are not enforced. However, we see the matter in much broader terms. The best example that I can think of is that of Kilnamanagh, where residents were forced to buy their houses before they were finished. Telegrams were sent to young couples, say on a Friday evening, indicating that if the deal was not completed by Sunday or Monday, the house would be resold. This was wrong, but it did happen to thousands of people and was exposed at the time by RTE and the newspapers. A major builder, the biggest in the country at that time, was involved. He was one of many doing this. The whole broad area needs somebody to take the interest of the consumer into account and look at the entire planning process. I do not believe one Minister for the Environment has ever overruled a rezoning decision, particularly in Dublin. Maybe it has happened elsewhere in the country. There might have been one incident——

Senator Tuffy

Brendan Howlin?

Mr. Finnegan

No, he did not. It did happen at Adamstown - currently in the news - where, in the run-up to a general election the two main party leaders at the time, Charlie Haughey and Garret FitzGerald, asked councillors to rescind the rezoning of a particular tract of land. Senator Tuffy knows we have been involved with the local authority on this. Not one Minister actually stepped in to overturn it. Deputy Howlin was asked to do it and he did not.

Chairman

I thank members of the delegation for their contribution. We have run out oftime.

The next item on the agenda is the presentation by the Irish Council for Social Housing, represented today by Mr. Donal McManus and Dr. Padraig Kenna, who are both very welcome. I must again remind visitors that members of the committee have absolute privilege, but the same privilege does not apply to witnesses appearing before the committee. We have already received the submission from this group, which we have studied. We will allow the group about six minutes to make their 'bullet points'. This will be followed by a question and answer session. I ask the delegates to be as brief as possible.

Mr. Donal McManus

Thank you Chairman and members of the committee for the invitation to make a presentation. I will outline briefly some of the major housing issues. Dr. Kenna will explain how they pertain to the Constitution. We represent the Irish Council for Social Housing. We are the representative body for housing associations in Ireland which provide one in four of all the social rented housing. Most of the members will be familiar with different housing associations, from their own localities, throughout the country. Our interest in the issue of land and the Constitution encompasses a number of angles. Basically, the role of the voluntary housing sector has increased dramatically in recent years. We have had a demand for greater land availability to build more housing schemes. We depended traditionally on local authorities for the provision of land for social housing. That has fallen off, and now we have had to enter the private market for the first time to acquire land for social housing projects.

In the years to come we will require between 2,000 and 3,000 sites for social housing. Housing associations have gained significant experience in the acquisition and development of land over recent years. We have a number of observations to make: the principal one is that we find that developers are taking out medium and long-term options on land that may not be rezoned in the expectation that the land will be rezoned at a future date. This form of speculation means developers are driving the whole development process. The fundamental factors that drive the process are for them to enter an agreement with the landowner to try to get services provided on the land and, ultimately, get it rezoned.

In the social housing sector we are concerned that we are actually paying twice for the cost of social rented housing. First, as taxpayers, we are paying for the infrastructure provided for land and, second, we are paying for the increased value of land for social housing. We think such double payment is an anomaly in relation to the provision of social rented housing. The weight of the Constitution allows proper balance between the rights of property owners and the State to intervene to limit those rights in the interests of the common good. We are in favour of a right to housing adopted along international and European lines. We are concerned specifically in relation to the land issue, but we are also interested in the whole area of 'betterment', and whether the Constitution is sufficiently robust to deal with the issue of betterment. As we have said, we believe that at present social housing is being paid for twice. The issue of recovery of betterment is of major importance and we believe it could be undertaken through the Constitution. I will now hand over to Dr. Kenna.

Dr. Padraig Kenna

Chairman, Deputies, Senators, I should like to thank the committee for inviting us to address it as the representatives of the Irish Council for Social Housing. We would not regard ourselves as constitutional experts, but we do have a number of observations. Some have been made by my colleague, the director of the Irish Council for Social Housing, on the "paying twice" for development land by social housing bodies, first in our payment as taxpayers for the infrastructure and services and, second, in the increased market price of that land when we purchase it to develop it for social housing. We think there is a need for some protection and recovery possibilities for this cost - this infrastructure and service investment which takes place on private land - to be facilitated, either constitutionally or legislatively. It does seem to be an anomaly.

The committee is concerned with the Constitution, whether certain legislation in relation to the common good can actually be passed. I would refer the committee to page 15 of our submission which outlines what the Minister for the Environment at the time had to say, in preparing the Planning and Development Bill 1999 - which later became the Planning and Development Act 2000. He pointed out that it was "fair, proportional and equitable" to introduce Part V, which was subsequently endorsed by the Supreme Court. He also pointed out: "We have a duty as legislators to provide for those who cannot provide for themselves." In some ways we would endorse that as our approach to this whole area.

The Planning and Development Act was accepted by the Supreme Court as constitutional and the issue of the common good has been a feature of some 300 reported cases in Irish law, yet some people find this concept difficult. We would say that the common good is not a new concept; it has been widely discussed and adjudicated on in many court cases. It is not such a frightening concept.

In terms of the housing market, we know that Ireland has the lowest ratio of houses and flats per thousand population in Europe. We also have an increasing level of household formation. We are all aware of the dynamics of the market, which is creating a huge demand for new homes. In Ireland, the market provides 90% of new homes every year while social and affordable housing constitutes less than 10%.

Housing is a market commodity in the main and the housing industry provides a livelihood for many people, including estate agents, builders, solicitors and bankers. There is a generally accepted functioning housing market in Ireland where certain externalities of the market, to use an economic term, are creating problems. That is one aspect of the discussion.

Staying with this approach, which I believe is Government policy, land is also an essential factor in the production of housing. Land is also bought and sold as a commodity. Recent views have been expressed - I heard some this morning - that developers and landowners are operating in a cartel and since land is one of the factors of production of housing, this is creating high prices. It is also claimed by some people that these landowners - I do not refer here to people with gardens - are using the protection of Articles 40 and 43 of the Constitution to block any Government action beyond that set out in the Planning and Development Act. This seems to be a generally accepted truism, that attempts to reduce the price of land or to bring it to the market would be defeated on constitutional grounds.

One of the observations we would like to make is that this apparent truism, which seems to lie behind the establishment of this committee's hearings and much debate in the press and other places, has not been properly researched. To my knowledge, the Oireachtas has not commissioned any research on the pattern or nature of the ownership of development land in Ireland to allay these fears or to verify the situation. Indeed, much of this debate is based on anecdotal evidence.

If this monopoly position in relation to development land exists, Article 45, which deals with the directive principles of social policy and which should be in the care of the Oireachtas, provides, under subsection 2.iii, that, "the operation of free competition shall not be allowed to so develop as to result in the concentration of the ownership of essential commodities in a few individuals to the common detriment." While Article 45 is not within the remit of the committee and is not justiciable in the courts, it is intended to inform the Oireachtas and the formation of legislation. In view of this, the legitimacy of constitutional or legislative action in this area of the development of land must surely require accurate and up to date information on land holding patterns and the nature of land holding.

The second part of our submission relates to rights to housing, an area that has been widely debated in the press and misreported in terms of what it means. Ireland has ratified a wide range of legal instruments relating to the right to housing, as set out on page 15 onwards in our submission. The terms of reference of the committee refer to the right to shelter. We would say that shelter as a right in itself is only one element of the right to housing. The right to housing includes the right to shelter, but it also includes much more. It addresses the needs of many of those in society who require security of tenure, affordable, habitable and accessible housing and housing suited to their needs and culture. These are set out in page 16 of the submission and are derived from the United Nations general comment on housing.

We see the establishment of a mere right to shelter in the Constitution as a minimalist and retrogressive step, which fails to acknowledge the commitments made by Ireland as a modern developed country in this area at international level. Without being on a rights basis, the State already has a higher level of provision than the mere right to shelter. In Northern Ireland, a right to minimal housing has existed since 1988, and the Good Friday Agreement points out that there should be an equivalence of rights between both parts of the island. That is something others could perhaps address.

Ireland has also recently ratified Article 31 of the revised European social charter, which proposes only measures to promote access to housing, yet we were unable to accept it as a state. We, therefore, recommend that Ireland incorporate all the international instruments which relate to a right to housing which we have adopted and ratified into the Constitution and give our citizens the protection and benefits we have agreed internationally but not at home.

Chairman

Thank you, Dr. Kenna. Do most of the groups you represent hold charitable status or are they non-profit making?

Mr. McManus

They are all non-profit housing organisations with charitable status. This year, collectively, they will provide approximately 1,800 new homes throughout the country. From counties Louth, to Limerick and Cork, most people would be familiar with local organisations, but there are some organisations at work throughout the country.

Chairman

I laud the valuable work they have done throughout the country. It has been said that some groups are finding it difficult to acquire land. Some local authorities are prepared to provide land at almost cost price in some of the remote rural areas, but that would be almost impossible in Dublin.

Mr. McManus

Deputy P. Power

I join in welcoming the delegation and compliment them on what has been the most helpful presentation to which I have listened in recent days. However, that is not to take from the other presentations. I was away for the first week. I join with the Chairman in complimenting the delegation on the good work it does throughout the country. Deputy McCormack's point is getting to the heart of the matter. I can assure Deputy McCormack that this is part and parcel of the daily reality of housing and property development in Ireland. I can speak from personal knowledge that this goes on not just for five, ten or 15 years but up to 20 years, beyond which there are legal difficulties. The profits are so vast that developers are prepared to take such a long-term view and are in a position to finance that long-term view. I do not wish to make a comment but rather to get information from the delegation. That is very much at the heart of this whole question and how we might interfere in that process is an issue at which the joint committee will have to look.

I ask Dr. Kenna not to apologise for introducing Article 45 because it has a role to play in our deliberations. This is all about competition and people who are in a much stronger competitive position to regulate and drive the market. Mr. McManus made the point that his organisation is small fry compared to the vast resources, technical, professional and otherwise, of these development organisations, particularly those based in Dublin, that are taking options on vast tracks of land throughout the country.

May I ask Dr. Kenna one question? He said it was important to embark on this constitutional endeavour and that it be properly researched. Will he indicate briefly how one might go about doing that type of research?

Dr. Kenna

There is a record of all land ownership in the country which, thanks to the Land Commission, applies to all rural land. It is probably a little more difficult in the cities but there is the Land Registry. There are a number of ways that type of research can be carried out. We are able to commission research in many areas in the country and that would not be beyond the realms of possibility.

Deputy P. Power

Would Dr. Kenna agree that by its nature it is a secretive type of operation and that both parties to this operation would not willingly disclose this type of information?

Dr. Kenna

In principle, the Land Registry is an open register. I assume people declare their assets. Under company law people are required to declare their assets. There are a number of ways that can be done. Presumably most developers operate under company law.

Chairman

Registration in the Land Registry is desirable but it is not mandatory. On options, I imagine most people would be reticent about putting a note in the Land Registry.

Deputy Neville

My question has been asked by others as it concerns the same issue. We have been informed repeatedly that a small number of people control the development land, especially in the Dublin area. What we are being told now is that they are ensuring they will control it for the next 20 years and that nobody else will get in on the act. It appears that due to their vast profits they can now obtain options on any land that is likely to become available. It does not take rocket science to predict where development will take place on the basis that massive housing will be required over the next ten years. The option on land has not been explicitly explained to us previously. In fact, according to this submission, the whole thing is tied up with these people for the next 20 years. We are in a cycle where the supply of land will be controlled by a small number of people indefinitely. If the supply is controlled the price is controlled. Given what the delegation has said, and Deputy Power's experience, this is very serious. I was about to ask a question but it has already been answered.

Deputy Devins

I welcome the delegation. It is important that we come back to the statement the witnesses made about money being paid to landowners as a down payment for something to be acquired later. We have heard a great deal about this. In their capacity as representatives of 200 organisations, are the witnesses saying they have come across this?

Mr. McManus

Our members have approached landowners to try to obtain land from them and have been told that developers have already approached the landowners. Our members were beaten to it. It should be borne in mind that non-profit housing associations must go to the market now. They are beginning to experience this scenario but they do not have the purchasing power of some of the developers. It should also be borne in mind that developers in many cases are different from landowners. Developers take an option out on land.

Chairman

Thank you very much for a very interesting submission.

Sitting suspended at 11.55 a.m. and resumed at 11.57 a.m.

Chairman

I remind members that we meet tomorrow at 10 a.m. The IFA sought a slot and the only one available was 10 a.m. to 10.30 a.m. I ask members to be on time as we will have a busy schedule tomorrow.

I welcome the Kildare Planning Alliance, which is represented by Mr. John Sweeney, Mr. Paul Croghan and Councillor Tony McEvoy. I remind them that while the committee members enjoy absolute privilege, the same privilege does not apply to witnesses appearing before the committee. I apologise for the overlapping of groups and we are allowing this group six or seven minutes to make a statement. We have received a submission from the group who may wish to synopsise its contents. Committee members will then ask questions.

Mr. John Sweeney

I thank the committee for the opportunity to speak. The work of this committee is one of the most important endeavours to be undertaken by the Oireachtas in the current session. We have experience of this issue and we seek to share our knowledge with the committee.

The Kildare Planning Alliance was formed in 1996 as a result of concerns that arose widely in the county at the time regarding the common good versus the private property issue, something the committee is wrestling with. In the 1985 county development plan sufficient property was scheduled for residential use to supply the needs of the entire State over ten years in terms of population growth. Of course, that was not used and our concern was that a repeat of the exercise from 1996 onwards would be to the detriment of the quality of life of residents of the county. We came together from various towns where similar problems were being encountered with a view to trying to ensure that the common good was to the fore in future development planning.

At that time the senior executive planner was anxious that excessive amounts of land were not allocated for future residential use, with one senior official stating that there was 50 years supply of land available at the time. Despite that, the county development plan which materialised proposed zoning enough land to cater for a 40% increase in the population of the county, which has since materialised. We have heard much about the rights of individuals coming, perhaps, too much to the fore over the rights of communities. These decisions involving an irretrievable commitment of resources have contributed to a long-term reduction in quality of life for many of the residents involved. My two colleagues will deal with different aspects of the issues.

What I would like to synopsise from our submission is that land is perhaps the last of what has been traditionally thought of as the free resources to become regulated. We have accepted regulation rights on what we thought of as our birth right in terms of water and air. On land, planning has come quite late to the State. As a consequence, perhaps the regulation of that resource has not been accepted widely in some parts of the State. It is important to redress and rebalance the situation. We advocate that this should be done by way of an amendment to the Constitution.

I would like to refer to the macro economic issues involved in putting property rights ahead of the community good in many areas. In my county approximately 2,000 acres of residential land is being rezoned and this will sell for an average of €1 million per acre. That represents a huge commitment of resources on a macro economic scale. Together with our colleagues in the council for the west, we are concerned that in many respects this undermines many of the regional balanced growth objectives of the State, as well as contributing to large migration and income flows from peripheral parts of Ireland to what is becoming a bloated and over-developed core in some areas. There is an important national interest involved in which we feel property rights play a central role. We advocate that the committee should consider seriously that aspect.

We share many of the comments made by colleagues in the last submission. Perhaps we have borne the brunt of the hoarding of land in other areas. The leapfrogging effect which has taken place to areas outside of Dublin has pressured counties such as Kildare, Meath and Wicklow. The problem is not just confined to the metropolitan core, it has spread rapidly. We believe the achievements of the national spatial strategy and the strategic planning guidelines will be compromised seriously in the absence of a drastic commitment to altering the way we go about changing our property rights.

I will now hand over to Mr. Croghan who will refer to the Kildare experience.

Mr. Paul Croghan

On the committee's remit to review Articles of the Constitution which deal with property rights, we believe that while the language of the Constitution is very balanced, there is a need to redress the balance which currently appears to put an emphasis on individuals rather than on the community.

In Kildare the practice is to rezone land for value rather than its ultimate use which is development. In counties around Dublin there is a fairly clear view that land was rezoned, particularly in previous plans, around the notion of its bank value. People were getting land zoned with no intention of developing it for a considerable time. That bank value was used to acquire additional land on the strength of the value. This compounds the problem to some extent because, if land has a value, it can be used for other purposes. Previous speakers referred to social housing. Obviously, its potential value compounds the possibility of using it for social housing or other uses. There is a view that developers have amassed land banks for future use. My colleague referred to a 50-year timescale.

My second point relates to the Minister for the Environment and Local Government. The Minister intervened in 1996 in the Kildare case because of the sporadic nature of the development plan as perceived by the Department. Unfortunately, the Minister has not been able to intervene subsequently. Perhaps any change to the Constitution would strengthen the Minister's position in being able to intervene in the planning process. It is currently perceived as a local issue, but, based on evidence throughout the country, it is not just a local issue. We are proposing an amendment to the Constitution to redress the balance between community versus individual rights.

Mr. Tony McEvoy

In Clane where I come from, the majority of land around the village, extending for up to half a mile, and a mile in some cases, has been in the ownership of developers for up to 30 years. Much of it currently remains undeveloped despite a huge amount of development having taken place. Previous speakers referred to options. I am aware of one case of approximately 60 acres on which an option was taken in the late 1970s. It was said that £100,000 was put down and an agreement signed. The farmer continued to live on the land and farm it intensively right up to fairly recently. It is only now that a planning application has been submitted and things are moving ahead.

When the Clane plan was being revised two years ago it was widely said that this particular landowner was asked not to develop his land until after the Clane plan was revised because there was a proposal in the county plan to zone an extra 90 acres in Clane. If he put his land into the pot at that stage it would not be possible to justify another 90 acres. His application did not go in until after the revised plan was adopted.

There was a proposal by the former Minister for the Environment and Local Government, Deputy Dempsey, to bring in a special regional authority for the greater Dublin area, which would deal exclusively with land use and the revision of guidelines, etc. Mysteriously that particular proposal seems to have dropped through a crack in the floorboards. We are back to the old system. I suggest there should be a body such as had been suggested by the former Minister for the Environment and Local Government, Deputy Dempsey, which should have strong planning representation in addition to politicians.

Deputy P. Power

Following up on Deputy Neville's question, the Kildare Planning Alliance is obviously in favour of a constitutional amendment to Articles 40 and 43. The previous delegation suggested amending the Constitution to allow local authorities have the first option ahead of any developer or building company to acquire land for purely social housing purposes at current use value. Would Mr. Croghan favour such an amendment?

Mr. Croghan

As the previous delegation said, and in our experience as well, social housing and people's ability to afford housing and groups' opportunity to assist them has been impeded, particularly in my region, by virtue of land value. We would be in favour of any kind of amendment that would assist that type of project. Regarding where the authority would lie, the previous delegation's proposal was local authority priority. We have not considered that in full. In my opinion it is worth considering.

Deputy P. Power

Mr. Croghan believes it is worth considering.

Mr. Croghan

Yes, but I am not an expert in what it means.

Senator Dooley

I join my colleagues in welcoming the group. Some of its ideas are quite interesting. Its submission mentioned trying to balance development and the fact that services were overstretched in the east coast area. As one who comes from the west I recognise that insufficient attention is focused on building an alternative counterbalance in the west. Is the mission of the group more about moving development away from the east coast, and particularly from the Kildare region, to avoid the extension of Dublin into Wicklow, Kildare and Meath?

I thank the delegation for its submission. We will now suspend for two minutes, pending the arrival of the next group.

Sitting suspended at 12.33 p.m. and resumed at 12.36 p.m.

Chairman

I welcome the delegation from the Hunting Association of Ireland, represented by Mr. Barry O'Driscoll, Mr. David Wilkinson, Mr. James Murphy, and Mr. Oliver Russell. I must remind our visitors that members of the committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee. I invite the delegation to make its submission. We have already received and studied its written submission which, I trust, can by synopsised within six to eight minutes, following which members of the committee will have an opportunity for questions.

Mr. Barry O’Driscoll

Thank you for the invitation to attend this meeting. As the Chairman has noted, we have already made a written submission. The Hunting Association of Ireland considered it prudent to make a submission, having regard to the fact that the committee is dealing with the issue of access to the countryside. In view of the time constraints on this meeting, I will synopsise our submission. In our view, the Constitution does not require any change and there is adequate provision in existing legislation to cater for all interests. Our activity in hunting with hounds is solely at the invitation and permission of landowners, whether tacit, implied or actually obtained. We fully accept that it would be impractical to expect otherwise. We acknowledge that landowners have the right to refuse admission - a right which should always remain. Landowners have full legal protection for any damages which might occur to them. That, briefly, is our position.

Chairman

Does any other member of the delegation wish to comment?

Mr. Oliver Russell

I wish to make some observations on the manner in which the constituent members of the Hunting Association of Ireland, comprising hunting clubs, either mounted or on foot, have been traditionally allowed access to private property as recreational users. Such clubs can only operate with the positive and tacit approval of farmers, landowners and the rural population, who own the properties over which we traverse. This is related to the fact that a majority of club members are within, or related to, the landowner group.

An essential feature of these clubs' continued existence is their close integration as part of the rural community, providing a source of recreation, social activity and interaction for the rural community during the winter months. There is an important employment aspect, with most hunt clubs employing two or three people. Many hunts also provide a vital fallen animal collection, or knackery service for farmers in their locality. Proper respect for the land and its owners is engendered in club members and there is an active commitment to promptly making good any damage caused. Any inappropriate behaviour by club members is not tolerated. As a result of recent prosperity in Ireland, an increasing number of people wish to participate in hunting activities. It is very noticeable that many of these people are the sons and daughters of members of local communities. The applications of others are considered only in exceptional circumstances and even then they have to be known to the rural community.

Private ownership of land, from which individuals derive their income and livelihood, is the best way to maintain the countryside as a resource for the people of Ireland. The use of this land as an amenity or a recreational outlet for the general public is best arranged by means of the current model, whereby the State owns or maintains large areas of scenic lands, which are marginal agricultural resources in any event. Issues relating to aspects of private property which are identified as beneficial to the community at large can be resolved by agreement with landowners. The Hunting Association of Ireland believes that a designated Government agency or other agency could be established to negotiate agreements relating to specific rambler routes on private property.

Deputy Neville

I would like to ask two questions. Does the Hunting Association of Ireland believe that the constitutional provisions relating to private property should not be changed? What trends have been identified by the association in recent decades on the co-operation of the agricultural community? Some people believe that the agricultural community is more concerned than it used to be about hunting on its lands. I come from County Limerick, where the tradition of hunting is well supported by all communities. I feel that there is less support than there was 20 years ago, however.

Mr. David Wilkinson

The Hunting Association of Ireland has had the opposite experience. As the popularity of hunting has grown in local communities, the link between landowners and families has become stronger. That is certainly the case in County Meath, where I live. I am chairman of a local fishing club and I am involved with a local hunt club. The organisations have developed a system, which works extremely well, of consent through permission over the years. There can be land access problems in areas of high tourism levels, but this is not something I encounter as a farmer. I do not have a problem with people walking on my land in any event, because vast numbers of people do not tend to do so. Locally managed resolutions are the way to proceed where such problems exist.

Deputy Neville

I also asked about the Constitution.

Mr. Wilkinson

The Hunting Association of Ireland considers that the present constitutional provisions are working very well. It does not recommend change in that regard.

Deputy J. Breen

As a farmer, I allow people to hunt and shoot on my land. The last page of the delegation's submission recommended that occupiers should take any reasonable steps to bring notices to the attention of the visitor. Why should I bring a notice to the attention of a visitor who has not been invited onto my land?

Mr. O’Driscoll

I am not sure if I understand the question. Did the Deputy ask why he should bring a notice to the attention of a visitor?

Deputy J. Breen

Yes. Why should I bring to the attention of an uninvited person any dangers that may present themselves while he or she is on my land without my permission?

Mr. O’Driscoll

I do not believe there should be an obligation to bring attention to any notice. We have tried to highlight in our submission that one should adopt the attitude that such people are trespassers in the event of any accident. This would mean that liability would be kept at its lowest. I do not believe that one should bring any such dangers to the notice of any person entering one's land.

Senator Tuffy

I thank the Hunting Association of Ireland for its contribution. It has said that it would not like to see constitutional change, but would it be in favour of any legislative change? The Mountaineering Council of Ireland suggested at a meeting of this committee last week that legislation modelled on that in the United Kingdom could be introduced. The council cited the example of Scotland, where access to land for walkers has been improved as a result of the legislation. Does the association favour the introduction of a new legislative framework to improve its position and that of its members, who carry out certain activities on privately owned land?

Mr. O’Driscoll

The Hunting Association of Ireland believes that the position in England should be considered. The committee will be aware that the right to roam has been introduced there through the Countryside Agency, but it is proving to be quite a millstone. Reports indicate that the preliminary estimate of a cost of £5.4 million is inaccurate, as the scheme has cost £13.5 million so far and is now scheduled to run to £18 million. These costs relate to the project in England up to the mapping stage. I believe that people in England are less close to the land than we are in Ireland.

My association believes that we need to return to a process of consensus and agreement. We do not believe there should be any constitutional change as enough legislation is in place. I fail to understand why the existing statutes cannot be used if it is found that hill-walkers or ramblers in certain areas are being absolutely and unreasonably obstructed. In such circumstances, a right-of-way should be acquired on a compensation basis if it is deemed necessary. It is an unending pit.

If one studies the website of the Countryside Agency, one will read about the troubles it is running into and the contests it is getting involved in. Such a system is a recipe for trouble. Given the closeness of Irish people to the countryside and the importance of the future maintenance of walkways, etc., it is clear that the way forward involves consensus.

Chairman

I thank the Hunting Association of Ireland for its submission and for being so brief and to the point. The committee accepts that the association is quite happy with things as they are - it is adopting a "leave well enough alone" attitude. Its opinions will be taken on board.

Sitting suspended at 12.50 p.m. and resumed at 2 p.m.

Chairman

The next item on the agenda is the presentation by Focus Ireland which is represented by Mr. Declan Jones, chief executive; Mr. Mamar Merzouk, director of research, development and education; Mr. Daithí Downey, policy analyst and Mr. Justin O'Brien who are more than welcome to the committee. I remind our visitors that while members of the committee have absolute privilege, the same privilege does not apply to witnesses appearing before it. I take this opportunity to remind members and visitors to switch off their mobile phones if they have not already done so.

We have received and studied the comprehensive written submission of Focus Ireland. We ask that the submission be synopsised over six to eight minutes after which time the committee members will pose questions. There is no point in covering the entire submission again. I would appreciate it if the delegation could pick out bullet points.

Mr. Declan Jones

As chief executive of Focus Ireland, I am grateful for this opportunity to appear before the committee to help with its examination of property rights in the Constitution. I take this opportunity to introduce my colleagues, Mr. Justin O'Brien, director of family services; Mr. Mamar Merzouk, director of research, development and education and Mr. Daithí Downey, policy analyst. As the full scope of issues under examination by the committee is considerable, our presentation concentrates on those issues we consider most germane and of immediate relevance to our work and on which we feel most competent to offer opinion and insight.

Focus Ireland is a non-governmental organisation which has operated in the community and voluntary sector since 1985. Since then, Focus Ireland has modelled responses to homelessness and over the years has consistently been a leading agency in developing innovative ways to help people move out of the cycle of homelessness. Currently, Focus Ireland provides a range of services and housing to approximately 4,000 people out of home per year. We provide specific, targeted services that work towards meeting the needs of homeless people and empowering them. These include youth services, a drop-in advice centre, a street out-reach team and a number of transitional and long-term housing developments in Dublin, Limerick and Waterford totalling about 300 units of accommodation. Based on this experience it is our confirmed belief that housing and accommodation is fundamental to survival and to living a dignified life with peace and security. We know from our work with people who are out of home that without adequate housing and accommodation employment is difficult to secure and maintain; physical and mental health is threatened; education is impeded; violence is more easily perpetrated; privacy is impaired, and relationships are strained.

Access to adequate shelter is one of the most basic human needs and must be seen as a fundamental human and social right. We trust this is an opinion shared by members of the committee. A right to shelter is just a starting point; good quality, secure and affordable housing should be a social right and given statutory backing. This is a point which I will reiterate throughout my presentation. Let me explain why we are confirmed in this view. Unlike other EU countries, Ireland has no established right to housing or accommodation for its citizens and housing rights in Ireland are historically weak by way of comparison to our European neighbours. Homelessness, on the other hand, is perhaps the most extreme denial of housing rights in society. It is a phenomenon directly resultant from poverty and social exclusion. We agree with the UN General Assembly, and the Commission on Human Rights, who recognise poverty is a human rights issues. I should like to offer a brief quotation for the record from the Commission on Human Rights resolution 2001/31. The Commission argues that: "Poverty and exclusion from society constitutes a violation of human dignity", with which we agree. Homelessness is an extreme form of poverty and social exclusion and is a denial of a person's human rights.

Over the period since the early 1990s, Ireland has witnessed a consistent growth in the number of persons officially assessed as homeless. By 2002, the official number of homeless people had increased to 5,581, from 5,234, over the three years since 1999. Meanwhile, during this same period the housing waiting lists shot up 23% to a record high of 48,413 households, representing approximately 140,000 people in serious need of housing and accommodation. Homelessness is now at crisis level and the absence of a right to housing means that an important aspiration for society, the prevention and elimination of homelessness, remains unfulfilled. Without a right to housing the extent, nature and experience of homelessness in society is deepened, exacerbated and prolonged.

The absence of a right to housing in Irish society means that our Government, officials and administrators respond in a lesser way to the challenge of homelessness and housing need. We commend the development of policy on homelessness since 2000, particularly in terms of the improvements in co-ordination and inter-agency working, as well as in the resources made available to the statutory and voluntary sector. Notwithstanding this, our research and our working experience on the ground forces us to conclude that the deficiencies and deficits in current policy on housing and homelessness remain significant. By way of example, I refer the committee's attention to ongoing problems of inadequate funding and expenditure to address housing need and homelessness in Irish society.

Failures in policy implementation are common. For example, not putting in place local authority homeless action plans on a statutory basis under Part V of the Planning and Development Act 2000, as amended in 2002, has led to a lack of guaranteed implementation of Government policy. Deficiencies and deficits are exaggerated by the absence of an overarching right to housing that is justiciable and that obliges statutory bodies to ensure direct provision to meet housing need is adequate, appropriate and timely.

I direct the committee's attention to the substance of our written submission. As a homeless service provider and a social landlord, we are keenly aware of the key weaknesses in our housing legislation. We draw the committee's attention to the Housing Act 1988 that provides the legal definition of homelessness. We accept this definition is robust, if a little incomplete, but we hasten to add that the failure of the 1988 Act to place a legal obligation on statutory bodies to house people assessed as homeless is a serious flaw; it is something of a loophole that means provision to meet the needs of some of our most vulnerable citizens is less than required.

We are not alone in our opinion on the need to adopt a right to housing in Ireland. Our submission commends the findings and conclusion of the major National Economic and Social Forum inquiry into social and affordable housing in 2000, that good quality, secure and affordable housing is a social right that requires statutory backing. Furthermore, our submission sets out international opinion on the commitments of Government to meet our obligations under international law on social justice and human rights. In particular, we draw the committee's attention to Government reports to the United Nations on our obligations under the International Covenant on Economic, Social and Cultural Rights. The UN has commended Ireland for developing a national anti-poverty strategy, in which commitments to tackle and eliminate poverty and homelessness are made, but it also lamented the absence of human rights framework consistent with the provisions of the Covenant and the fact that the provisions of the Covenant are not reflected in domestic legislation. One of these provisions is Article 11 of the Covenant that refers, among other things, to the right of everyone to housing and continuous improvement in living conditions.

We also draw the committee's attention to the social, economic and cultural rights established as part of the EU Charter on Fundamental Rights. We feel strongly, however, that Article 31 of the revised European Social Charter, dating from 1996, presents a more complete set of housing rights for adoption in Ireland. In order to inform thinking on what actually constitutes a right to housing under international laws to which the Irish State is a party, we refer the committee to the details of General Comment No. 4 adopted by the United Nations Committee on Economic, Social and Cultural Rights.

I will not go into any great detail here, suffice it is to say that Focus Ireland supports the opinion of the Irish Council of Social Housing. The ICSH recommendation to this committee is that Article 31 of the Social Charter be ratified and that constitutional protection of this, and the other international rights to housing established in international law and to which Ireland is a party, be included in the Irish Constitution, Bunreacht na hÉireann. We are not constitutional experts in Focus Ireland but in terms of the issue of private property and the common good we assert that the constitutional right to private property established by Articles 40.3.2° and 43.1.1° is contingent to the principles of social justice and the exigencies of the common good as set out in Articles 43.2.1° and 43.2.2°. In advocating the establishment of a right to housing in Ireland we trust that any constitutional impediments to such legislation will be identified by this committee and any constitutional amendments required to support the achievement of a right to housing will be proposed.

Finally, Focus Ireland does not adopt a naive position that a right to housing will of itself deliver an immediate and lasting solution to homelessness and housing need in Irish society. We recognise that even where such a right is laid down the law may not always be applied, that insufficient resources may be allocated, that some groups, for example, ethnic minorities, may be excluded from access to the legal system, and that procedures for enforcing a right to housing may become so bureaucratic as to actually prevent or obstruct the right becoming operationalised and real. Notwithstanding this, we remain convinced that such difficulties can be successfully overcome. Equally, we remain convinced that the adoption of a right to housing will provide a legal basis to ensure Irish housing and homeless policy and provision meets the needs of people out of home and in need of housing and accommodation. On this basis I commend our submission to you. Go raibh míle maith agaibh.

Deputy Neville

I welcome the delegates, thank them for their submission and congratulate them on the excellent work they do. The brief of the committee is to examine property rights. Most of the delegations feel there is no need to change the Constitution to deal with property rights and that the current provision is adequate if the Oireachtas has the will and determination to introduce legislation to address the problems that exist. Constitutional impediments were referred to towards the end of this submission. Do the delegates believe there are any? I do not see how one could introduce legislation to accommodate Mr. Jones's suggestions without changing the Constitution through the cumbersome procedure of getting Government to agree on the wording for a referendum and putting it to the people. I am not sure that the Oireachtas could, if it had the will to do so, introduce legislation immediately to deal with the issue about which Mr. Jones is talking.

I have much interest in the issue of homelessness, especially in the area of mental illness. We hear that up to 40% of homeless people on the streets may be suffering from a mental illness. Although it is outside the brief of the delegates, will they comment on it briefly?

Mr. Justin O’Brien

Insufficient research has been done to establish the exact figures pertaining to mental health and homelessness, which tend to vary. Moreover, in terms of the right to housing, the problem relates to the lack of community-based care services for people with mental illnesses. Our experience is that people with mental health needs are more vulnerable to becoming homeless. There is a need for adequate community care provision for people with mental illnesses and, equally, for accommodation. Focus Ireland houses many people with mental health difficulties. It is a supported housing landlord with staffing presence available to people either on-site or as required, and therefore we are delivering a unique kind of housing provision. What really militates against development in this area is the lack of a defined scheme of assistance in terms of funding for the provision of supported accommodation for people with learning disabilities, the elderly and those with mental health needs. This could be addressed by resource allocation in the budget and a defined scheme of funding by the Department of Health and Children. This would make a critical difference and would prevent people entering the cycle of homelessness and remaining in it.

Mr. Jones

We are not constitutional experts. We regard the Constitution as balanced in terms of the rights associated with private property and the common good. We regard it to be the remit of the committee to identify constitutional impediments, but we believe there is a sound basis in the Constitution on which to enact legislation for a right to housing.

Deputy Morgan

I thank the delegates for their submission. On the last point, there seems to be considerable agreement in the submission that legislation would probably stand up under the Constitution. However, is Focus Ireland reasonably sure that Articles 40.3 and 43 are sufficiently clear to permit legislation to be introduced? Would legislation stand up in the longer term?

Mr. Daithí Downey

That is the &dollar;64,000 question but we believe that the balance struck between the Articles in the Constitution is such that social justice and the exigencies of the common good, as articulated in the Article, can be seen to determine the nature of what is understood as the common good in terms of the exercise of property. I suppose the test relies upon what may be considered an unjust attack on the exercise of those property rights under the Constitution. As Mr. Jones stated, we are firmly of the opinion that the Oireachtas could legislate in this area reasonably quickly and, on that basis, see what form of constitutional impediment may be identified by any opponent to that legislation who would seek some form of judicial review through the Supreme Court.

As our submission stated, we hope that if this committee receives any evidence as to what may constitute an impediment, as worded in the Constitution, it will bring forward a proposal to resolve it so that any amendment it proposes would simply be to offer protection to the justiciable enactment of social, economic and cultural rights, particularly the right to housing.

Chairman

I thank the delegates for their submission, which was very interesting. I, too, commend them for their excellent work. Many of the questions we had intended to ask were asked of the Irish Council for Social Housing, which made a very strong presentation this morning in the same vein that we will obviously take on board.

Sitting suspended at 2.27 p.m. and resumed at 2.29 p.m.

Chairman

Next we will hear the presentation by Forfás, represented by Mr. Evin McMahon, policy development executive, and Mr. Brian Cogan, manager of the enterprise policy and personnel division. They are both very welcome. I remind visitors that members of this committee have absolute privilege but this same privilege does not apply to witnesses appearing before it. We have received the interesting and substantial submission from the group which we have already read and studied. In order to speed matters up, we suggest that the delegation makes a bullet-pointed synopsis of the submission for six to eight minutes, following which we will have a question and answer session.

Mr. Brian Cogan

I thank the Chairman and the members for inviting us to appear before the committee today.

This document was submitted by Forfás in conjunction with the enterprise development agencies, IDA Ireland and Enterprise Ireland. For the information of the committee, Forfás is the national policy and advisory board for enterprise, trade, science, technology and innovation. It is an agency of the Department of Enterprise, Trade and Employment. Through Forfás, powers are delegated to Enterprise Ireland for the promotion of indigenous industry and to IDA Ireland for the promotion of inward investment. Forfás is primarily a policy advisory agency.

The purpose for our submission is our concern that inadequacies in infrastructure and high land costs are leading to lower productivity and increased costs across the enterprise sector. They also diminish Ireland's attractiveness as an investment location for foreign direct investment. The development agencies regard the supply of appropriate infrastructure in roads, waste management and telecommunications and so on, as vital to the medium and long-term development of Irish industry. The agencies' interest in the work of the committee is restricted to those areas of national enterprise and infrastructure development which can be affected by provisions of the Constitution pertaining to property rights.

The submission sets out a number of recommendations which focus primarily on the need to address uncertainty, costs and speed of delivery with regard to planning and completion of infrastructure in the national interest. We ask the committee to note that only some of our recommendations require constitutional change, while others do not have direct constitutional implications. We ask that the committee might support any changes required to ensure their adoption. Forfás does not have constitutional legal expertise in itself and, in preparing this submission, we were guided by advice we received from counsel and leading academic law opinion and we also commissioned a separate report from consultants on the delivery of economic infrastructure projects.

I wish to address the issues of private property and the common good, compulsory purchase, the price of land and infrastructure development and planning. As the development agencies see it, ambiguity over the weight attached to individual rights and the public good can influence both the cost and the timing of the provision of public infrastructure. Since the 1990s, the balance has been moving towards limiting the rights of private property in order to pursue desirable social objectives, which we welcome in so far as that impacts upon the ability of the State to deliver critical infrastructure. However, given that questions as to the constitutionality of measures adopted for further infrastructure projects will invariably come down to weighing the competing interests concerned, we recommend that Article 43 of the Constitution be amended so as to make explicit the heavy weight which ought to be attached in any such balancing exercise to the high level of public good associated with the efficient, timely and cost-efficient delivery of public infrastructure projects.

In that regard, we make a number of recommendations on the wording of Article 43 of the Constitution to give greater weight to the public good. These are set out in our documents and involve adding riders onto the existing Article 43.2.1°, to state: "and by the need to pursue desirable national objectives, including the provision of important public infrastructure in the interests of the common good." Article 43.2.2° states: "The State accordingly may, as occasion requires, delimit the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good" and we recommend adding the following: "and to have particular regard to desirable national objectives, including the provision of essential public infrastructure in the interests of the common good." We also suggest adding a further Article 43.2.3° that would state: "In particular, in reconciling the exercise of the said rights with the exigencies of the common good, the State may pay particular regard to the need to pursue desirable national objectives, including the provision of essential publicinfrastructure in the interests of the common good in an orderly, cost-effective and efficient manner."

We do not believe what we recommend in regard to compulsory purchase requires constitutional change. The issue, as we see it, is the determination of compensation in the CPO process that often causes considerable delays in the delivery of infrastructure projects. While we recognise that work can continue while compensation is being negotiated, the uncertainty surrounding the scale of compensation which may be required makes investment less attractive. Consequently, we make a couple of recommendations under this heading. Consideration should be given to the establishment of a dedicated national system for assessing CPOs, for example, a specific court, tribunal or independent assessment board. We also recommend the introduction of clear and consistent mechanisms through which compensation might be calculated in an efficient manner. If such mechanisms were in place, it might be possible to have some reasonable expectation of what the level of compensation might be before one starts off on the process.

The issue in regard to the price of land is the manner in which land value is calculated and is adding to the escalating costs of infrastructure delivery. We believe that procurement of land should be at prices based upon a fair value rather than a speculative value assessment. In this regard, we support a pricing mechanism less dependent on anticipated land values, particularly where these values incorporate anticipated increases in the event of public infrastructure deployment. For example, if a piece of land has a certain value and the State decided to put a piece of national infrastructure through that land and it automatically increased in value but if the State then decided not to proceed, the land should revert back to its normal market value. We question whether the State should have to pay for an increase in value due to something which the State itself is bringing into play. This may or may not require constitutional change. The advice we have had is that it probably does not but would probably be influenced by the first point we spoke about.

The Deputy mentioned comparisons with other countries. I mentioned that we had commissioned from ERM consultants a cross-country comparison of how different countries deliver public infrastructure in terms of the public planning laws. That would be a useful document for the committee and we would be happy to supply it to the secretariat.

We cannot override the absolute right of the public to comment on development through the planning process. Our suggestion is that the manner in which this is done be time-saving and efficient. In answer to the Deputy's question, we do not feel that would be an appropriate way to go. We would be more comfortable with a process in which the public is allowed a proper consultation process, to which it is entitled, but in a proper, efficient manner. The Deputy referred to his visit to Spain. It is interesting to compare the statutory consultation periods of Ireland and Spain. In Ireland the consultation period is ten weeks for development plans. In France and Spain it is four weeks; in Denmark eight weeks and in Australia four weeks. Intensive consultation is right but it should be done in a shorter time.

Senator Tuffy

I thank the delegation for their presentation. A particular wording was suggested for dealing with public infrastructure. Why does Forfás feel, for example, that legislation could be brought in to deal with the acquisition of land at prices based on fair value without constitutional change, yet the other issue could not be dealt with through legislation but would require constitutional change?

I wonder about the words "public infrastructure". This wording would cover more than just State infrastructure. Are the representatives happy with this?

Mr. Cogan

Deputy Neville

I welcome the members of the delegation and thank them for an excellent presentation. A change in the Constitution was recommended and that is cumbersome. We must persuade the Government to accept the change, get the wording right and put it to the people and that process could take up to ten years. The immediate way to work on the problem is to introduce legislation to deal with it and test it under the present Constitution. If someone wants to test it, so be it, because it has been suggested to us by other groups that the proposal would not be found unconstitutional. Lawyers make different calls on different issues but, with the need for immediate action in this area, would the delegation agree that the Oireachtas should put legislation in place as quickly as possible, test the system under the present Constitution and then see if the change recommended is necessary? If we take the change on board immediately, it will take some years and it could be used by the Oireachtas as an excuse to procrastinate.

When the delegation talks of essential public infrastructure, is public and private housing included in that?

Again, all I can repeat to the Deputy is that we are recommending constitutional change.

Deputy Morgan

I thank the group for their presentation and especially for sticking their neck out in suggesting a wording for the amendment. Deputy Neville has already asked my question.

Senator Dardis

I thank our witnesses for attending and re-echo what Deputy Morgan has said. It has been enormously beneficial that they have actually come up with a wording because many people have suggested that the Constitution should be amended but have not been precise as to what the wording should be. We all know that it is extremely difficult to frame the wording in these matters so our witnesses are to be commended for that.

I am somewhat surprised that the conclusion was that the Constitution would need to be amended because the introduction speaks about the way that the courts increasingly delimited the rights of private property coming into the 1990s. That is explicitly stated in the submission. The group talked about Part V of the Planning and Development Act 2000, which was held to be constitutional, so I am somewhat surprised at the conclusion on the basis of the introduction.

One of the difficulties in framing the articles is reflected in our experience in the past as legislators when these questions are put. If one recalls, say, the divorce debate, it had as much to do with property as moral issues. It tends to be that in wishing to delimit the excesses of speculators, let us say, it then becomes the people of little property rather than of a lot of property who come to the defence of the status quo. In other words, it is very difficult to get these things through because, as Deputy Neville said, the small farmer in west Limerick or the man with the mountain in Connemara immediately sees a motorway running through his property and assumes that he will somehow suffer as a result. That is an important aspect.

Our witnesses spoke about the CPO process. We accept that the delays impinge on the national development plan and hold up infrastructural development but what would the visitors say to the idea that once the order is made and there is a notice to treat, it is possible to have the argument as to value after the infrastructural development has started or even after it has been built? To what extent is that perceived as a delay?

The group made an observation about NGOs and about how they should have to satisfy certain requirements. I wonder how that can be done without also delimiting the rights of individuals. How do we make a distinction between the two? I am not saying that they are wrong in their proposition but the question is how to achieve it. A final issue is that of going below the depth of ten metres, which I know the Spaniards have dealt with successfully when it comes to tunnelling for infrastructure. Anything below ten metres there is regarded as being in public ownership. Did Forfás have any advice as to whether a constitutional issue would arise there and whether it might require a constitutional amendment?

Mr. Cogan

The Deputy was surprised at the conclusion given the introduction. What we were trying to say in that introduction is that we do recognise that the courts have been moving and that the pendulum is moving in the right direction, as we would see it. There were two trains of thought, one of which is to leave the situation alone and let the pendulum continue hopefully to move, but there is no certainty it will move. We felt, at the end of the day, that what was required was to put certainty in through a specific amendment as suggested.

On the question about the notice to treat, the Senator is absolutely correct. We fully recognise that one can continue with the development while the negotiations are continuing. We are not saying that this regulation provides a barrier. We are saying that, yes, one can continue but it is a very unsatisfactory position to be making an investment and starting to build without knowing what the cost of that investment will be at the end of the day.

I take the third point fully regarding NGOs versus individuals. It is the one item in our presentation I would be somewhat soft on in the sense that I think it would be difficult enough to make the differential between NGOs and individuals. We did get some advice from our counsel on that particular issue and he made similar points to those made by the Senator, so I take the point.

Senator Dardis

I hasten to add that I am not a member of the Bar Council.

Mr. Cogan

I am not sure if I mentioned this but if the committee wishes to see the counsel opinion we are happy to submit it to the committee.

Chairman

We would appreciate it.

Senator Dardis

What of the issue of going below ten metres?

Mr. Cogan

We did not seek counsel's opinion on that particular issue.

Senator Daly

Since its establishment Forfás has submitted various reports and recommendations on competitiveness and so on. Has it made submissions along the lines sent to us to its parent Department of Enterprise, Trade and Employment? Forfás would have available to it fairly substantial land banks in various locations. It tells us that the high cost of development land is diminishing the effectiveness of Ireland as an investment location. How great a factor would that be in the reason investors do not come here? Is it very low? Are we talking about, say, two out of ten of the investors who choose not to come here?

What bothers me is that, perhaps not Forfás, but some of its other organisations, such as Shannon Development, would have substantial banks of land in various locations which, in a way, should not really affect our prospects of attracting industrialists here? Are there other reasons for this? I am sure there are. To what extent is this an issue?

Mr. Cogan

Regarding whether we have made these submissions to our parent Department, the actual submission to the committee was put to the Forfás board recently, which includes the Secretary General of the Department of Enterprise, Trade and Employment. The answer is yes, we do submit our work to our parent Department.

The next item on the agenda is the presentation by the Irish Planning Institute represented by Ms Louise McGauran, Mr. Philip Jones, Mr. Ciaran Treacy and Ms Rachael Kenny, who are welcome to this committee.

I must remind visitors that members of this committee have absolute privilege but the same privilege does not apply to witnesses appearing before the committee. I invite the delegation to make their presentation. We have received a very well laid out submission from them and rather than go through all of that I suggest that in the space of six or eight minutes the delegation synopsise its main points and then we will have a question and answer session.

Ms Louise McGauran

On behalf of the Irish Planning Institute I thank the Chairman and the committee for inviting us to present our submission to the committee. The IPI is the professional body which represents public and private sector planners in Ireland. The members have many years experience of dealing with issues surrounding property rights, in particular the development plan process and the zoning of land. To present our submission we have three past presidents, Rachael Kenny, Ciaran Treacy and Philip Jones who between them have worked in various planning bodies, including local authorities, the Department of the Environment and Local Government and the private sector.

Mr. Philip Jones

We prepared our submission in line with the advertisement which the committee placed in the newspapers. It is quite short compared to some of the others which the committee has received.

The system is not working and the balance between individual rights and the common good is already skewed far too much towards individual rights rather than the interest of the common good. The planning system, which forms part of the committee's terms of reference, is seen by many people as unfair and lacking transparency. The result is that many members of the public are losing confidence in it, particularly that part of the system relating to the adoption of the development plans. The committee should consider both a combination of constitutional changes regarding private property and some legislative changes on planning policy.

Having worked through the documentation that the committee asked us to read, and consulted several of our experienced members, we have come up with three possible alternative systems for dealing with the issues which the committee brought together under the first heading. That is why we have not prepared a long introduction about why we feel this is necessary.

Mr. Ciaran Treacy

I will outline the first of the three options. The issue of property rights is probably at the crux of the situation. There is no clarity in what is meant by private property rights. We cite the example of mineral rights in Article 10 of the Constitution where they are vested in the State. Those minerals are under the ground of the individual landowners but it is the State that owns the rights in issuing licences for exploration and for the development of those rights. It is not a denigration of the property rights of the individual that this right is vested in the State. Our fundamental idea behind this is that much of the value that is currently being put on land is arising from community demands and investment. These are demands in infrastructure, places to live, to provide land for industry, education, etc. It is actually the community's choice that is putting this extra value on the land. For example, if one could find a ten acre field in County Kildare that was producing 40 bushels of wheat per acre and then if one could find a similar field in the back lands of County Mayo——

Senator Dardis

I hope the field in Kildare would be producing more than that.

Mr. Treacy

Yes, but whatever the figure is those two pieces of land have an intrinsic similar value. However, the field in County Kildare on the edge of Naas gathers additional value than one in a more isolated location. This additional value arises out of the fact that it is the community that requires this land. It is not part of the intrinsic value of the land in itself. We feel, therefore, that we should separate this development right. Development is generated by the community, therefore the right should lie with the community. The property right - the intrinsic value of the parcel of land - would still remain intact in the ownership of the owner. By bringing in such a system, whereby the development rights which arise from community demands and needs, it is then vested in the community. The community is therefore not lumbered with additional costs to satisfy its needs based on the fact that it is generating that demand. This is the basic idea we have. We feel there is room in that it is already recognised for mineral rights and it is not necessarily vested in the individual. In the Constitution we should try to distinguish between development rights and property rights.

There are already similar examples in other states. For example, Denmark, a fellow EU state, is approximately the same size as Ireland, but has a better GDP. In that country, the development right of the community is where they are vested. When the community agree that land should be developed, it then has two options. The land can be taken from the landowner for that community development, the infrastructure can be put in, and then the land can be sold on to builders who will take their building profit and not property profits. If the community does not want to provide the infrastructure but feels development should proceed, they then go through licensing, allow other parties to develop. They get their clawback in terms of the community's demands. There are good examples in Europe of similar systems at work. It would be quite possible to run a system such as this in Ireland.

Mr. Jones

The second area we will address is the idea of a development land tax. This is similar to capital gains tax with two important distinctions. The first is that it would not be paid to the central Exchequer but to the local authority in whose functional area the increase in the value of land through zoning happens. This would have the advantage that if the local authority decided to zone a piece of ground, it would be gaining.

Currently, when a piece of land is zoned in a development plan, the landowner captures most of the increase in value due to this. Yet the local authority has to go cap in hand to the central Exchequer to get the money to put in the sewerage system, water mains and so on. The local authority gets a small proportion of it back by way of development levies. However, those development levies are passed on to the builder who, in turn, passes it on to the house purchaser. The landowner who has sold the land to the builder gains the substantial increase in value.

By having a development land tax payable to the local authority, when that land is sold the local authority would get the bulk of the price. It would still give the landowner considerably more than the value of the land prior to zoning. It would mean that the local community, through the local authority as the development agency, would have the opportunity to service land. It would also have the added advantage that if the local authority wished to CPO land for development for its own purposes or handing it on to private builders - either because land was not released for development quickly enough or services were not available at the time - it would cost 20% of the value rather than as currently, 100%. By definition, that money available to the local authority should be ring-fenced for infrastructure work and purchasing land for development. The key is that the money would not go the central Exchequer but the local authority. That means that less opprobrium would be placed on local authority members in zoning land because the community would get the bulk of the benefit rather than the landowner.

Ms Rachael Kenny

The third alternative that we have is where the State would become involved in newly zoned land. This would redress the issue of individuals creating land banks by holding on to land. It would allow for the land to become available at a more steady rate and in a more logical manner so there would be a sequential availability of land as it was zoned. It would avoid the whole idea of leap-frogging development where an individual is holding on to land closer to a town, waiting for a higher margin and development moves further on out of the town. This causes difficulties in the cost of servicing. It also results in excessive amounts of land being zoned. This is because councillors and planners are aware that if one needs a certain amount of land to become available within the lifetime of a plan, expedentially more land is zoned.

Our approach to this would be for the State to CPO all newly zoned lands at agricultural values plus injurious effect. This would be the current value plus 25% of the value. The State would be able to sell off large parts of this land bank at the full development value and use the profit to fund social and physical infrastructure for the community. This idea is similar to that of post-war new towns in England and the proposals outlined in the Kenny report.

Senator Tuffy

I thank the institute for its submission. On the proposal to separate ownership rights and development rights, the delegation suggested that should be done by way of constitutional amendment. Can this be done by legislation?

On the approach similar to the proposals in the Kenny report, the institute is proposing that the State would sell off large parts of the land bank at full development value to developers, using the profits to fund infrastructure projects. Would that not mean that the issue of the price of housing would not be dealt with? Will this proposal mean that the house purchaser will still be hit with the same unaffordable prices?

In the submission the institute states that councillors should not be able to give directions on draft development plans. This is something new for county councillors. It was to do with much broader things such as preserving the Liffey valley. We did not actually identify tracts of land for zoning in our direction. It would have been much better to have some input before the draft development plan was issued to avoid its being a fait accompli. Is the suggestion in the institute's written submission not therefore a little premature?

Mr. Treacy

A similar issue is the question of the constitutionality of Part V of the 2000 Act. It is because it is in the interest of the common good, that that section has allowed us to deal with the property rights of the individual on a similar basis, so it may be possible to deal with this issue through legislation. Given that mineral rights, for example, are seen as a distinct right, as stated in Article 10 of the Constitution, a similar statement would be much more solid in terms of its effectiveness within the Constitution. There are mechanisms, however, for dealing with this through legislation, using the definition of what is in the interest of the common good and identifying through legislation that the added value is a derivative of community demand and community need and therefore consolidated within the terms of the balance of the common good.

Ms Kenny

The full development value of the land being sold on would obviously be reasonable and not exorbitant as in the current market climate, but instead of the landowner accruing all the funds paid by the developer, those moneys would be coming back into the public fund to provide for necessary social and physical infrastructure. Not only housing would be provided; there would be a mix of uses with residents being well serviced. The full amount of the land would not be sold on; a portion would be held for social and affordable housing, which would obviously be more affordable if the price of land could be determined accordingly.

Mr. Jones

In response to Senator Tuffy's third question, there is an anomaly in the 2000 Act. The system can be summarised as follows. The manager prepares a report saying what he or she thinks should be in the development plan. The councillors then make clear their requirements. Once those requirements are put into force, the plan goes on display as a draft plan. Our concern is that in certain counties, members are putting forward specific plots of land to be zoned in advance of the manager's preparation of the overall strategy. That is incorrect, because it is done entirely behind closed doors, whereas when the manager's report is put before the council it is done in public session. The council members formally make changes to the report, which becomes the draft. From the point of view of accountability, the first thing the public sees should be the manager's report. The public should then see the changes made by the councillors to that report, and that should become the public document put on display as a draft plan. It is because the Act is not as tightly written as it could be, that there is the possibility of difficulties in certain councils.

When the draft is on display submissions are made and then the council members decide which are to be accepted. In some counties in the past, particularly Dublin county, as is being discussed in another forum, members of councils proposed additional plots of land to be zoned even though no submissions had been made from the landowners concerned. It should be clearly indicated in the Act that this is not permitted, because once the draft plan goes on display, it is deemed to be the view of the council on what should be done. If there is no single submission on the plan as put out in draft form, it should be adopted as it is. If a landowner wants his or her land zoned after it is put on display, there is the opportunity to make that submission and it should be done publicly rather than at the last minute at the council meeting. It is a matter of accountability. I do not think that would require constitutional change, just an amendment to the Act.

Deputy Devins

Mr. Jones

We are suggesting in our second option dealing with a development land tax something essentially the same as capital gains tax as it currently operates, but with two exceptions, the first being that it would be at a much higher rate, reducing year by year depending on when the land was zoned. Secondly, it would go to the local authority. We stress that, for it is hugely different from the current situation.

Chairman

Everyone here has their hand raised to speak, and I have one or two questions myself. I ask that, if possible, we avoid covering the same ground so that you need not repeat your answers.

Deputy P. Power

Like my colleagues, I welcome the Irish Planning Institute. I join with Deputy Devins in saying that their document is extremely thought-provoking and different from some of the others presented to us. As Mr.Treacy has said, you are raising the debate on the various issues. Our job is to decide whether there should be a change to property rights in the Constitution in the interests of the common good. The net result of the proposals of the group is to benefit the common good by making more land available at affordable prices. That is what we are all trying to achieve. I wonder if, in the three proposals, the group has thought through their constitutionality, particularly regarding the development land tax. We have had previous cases dealing with taxation issues, such as the Murphy case. They might be arbitrary or disproportionate. I am wondering whether the sorts of tax rates that the group is talking about might fall into that category. I address that question to Mr. Jones.

The next question I address to Ms Kenny. This morning the Irish Council for Social Housing made a proposal not unlike that of this group, that, in the event of land being rezoned, the local authority would have first option to buy it at existing use value plus 25%. I wonder how Mr. Jones would feel about that issue. The third question concerns the constitutionality of these proposals, which is what we are trying to assess. Has the group taken any advice on it or thought about whether its proposals would be constitutional?

Mr. Jones

We examined those three options. We felt that option number one, which is the separation of ownership rights and development rights, as Mr. Treacy mentioned, would probably need a change in the Constitution. While many lawyers would argue that it might be constitutional or otherwise, in the interests of the common good and the operation of the whole system, it is probably better to have a specific amendment made to the Constitution to ensure that it is immune from legal challenge. While I am sure that many people who came before the committee have been quoting the court judgment on Part V, it is important to recognise that it dealt only with that part. Specifically mentioning development rights as vested in the State in the same way as mineral rights are under Article 10 would copper-fasten it in the Constitution.

Several of us have experience and in some cases also legal training, but I hasten to add that none of us is a constitutional lawyer. I am sure that the committee has the benefit of advice in that regard. However, we feel that the development land tax concept would not require constitutional change. We remember that the first Bacon report suggested that CGT go from 40%, down to 20%, and then up to 60%. There was no suggestion at any stage that his proposal was unconstitutional because the 60% rate was so high. For other political or economic reasons, the Minister decided not to put it up to 60%. We are simply suggesting making it higher. By definition, it would only be unconstitutional if it were an unjust attack on the property rights of the individual. If the value of the land after zoning is ten or 20 times the original value, and we propose taking 80% of the latter figure and giving it to the local authority, the landowner is still making a substantial profit on the value of the land after zoning compared with the original value. That zoning decision is made by the local council representing the community. In our view it is not an unjust attack on property rights, since the landowner still makes a profit, albeit less than he or she currently does.

I call Deputy McCormack.

Deputy McCormack

It would be regrettable if a misunderstanding of Mr. Jones's ideas detracted from what was a thorough and thought-provoking presentation. I will highlight it for further study, and I am sure many other members of the committee will do likewise. However, Mr. Jones's understanding of what happens with the process of the draft development plan is incorrect. I have participated in seven draft development plans, four or five in the county and two or three in the city. We are currently engaged on one in the city.

In answer to the first question, I take it Senator Daly is talking about the development land tax idea in that context?

Senator Daly

Mention was made of a second tax.

Mr. Jones

Yes. To be honest, it would not be uniform throughout the country in terms of the amount of money the local authority would get because, by definition, land prices are different in, say, Dublin compared to Clare. What we are suggesting is that when land is zoned and then sold, the bulk of it, say, 80%, although it might be lower than that, goes to the local authority to spend on infrastructure and so on. Obviously, if the land values in Dublin are higher, the local authority concerned has more to spend but by definition the demands on those local authorities are also higher. It would be fair to say it is the principle behind a development land tax whereby the bulk of the benefit from zoning accrues to the local authority rather than to the individual. That is the key principle. If a local authority in a more remote area has less land zoned for development because the pressures for development are less, by definition it will have fewer needs generally than those in a more urban area. That leaves aside the issue which has been the subject of some debate in relation to the national spatial strategy, which states we should develop more in the remoter areas and less in the Dublin area. As an institute, we are firmly behind that because it is in the interests of the State as a whole that Dublin does not grow as fast as it is growing currently. It is already badly congested, and the figures issued recently, of which members will be aware, on what it will cost to put in the Luas and all the other infrastructure in the Dublin area compared to the cost of refurbishing a rail line along the west from Limerick and Cork, all the way up the coast, are unanswerable.

At a national level we should be looking at pump-priming those areas by putting in infrastructure early to allow them develop rather than, as we appear to do in Ireland, wait until the pressure comes on and then try to fill the gaps. If we started pump-priming in advance we might get a better allocation of development. I agree with the Senator, but this is not a panacea. My view is that national investment, in addition to a local development tax, should come disproportionately to those areas that need it most. That means going along with the national spatial strategy and allocating funding to back it up so that it is more than just a document on a shelf. In that sense, I totally agree with the Senator.

Chairman

Senator Dardis said he had not finished.

Senator Dardis

I have not even started yet. I was provoked by Deputy Neville into intervening. One of the merits of this session is that we had a vigorous exchange, which is healthy. I do not have any objection to Mr. Jones or anybody else making fairly vigorous comments. It is up to us to rebut them if we do not agree with them but I do not recognise the process we have just gone through in the area committee in County Kildare with regard to the development plan for Newbridge. I do not see it in the same way as Mr. Jones. The six members of the area committee have done their level best over 14 hours of discussion since the draft came back to us with 50 proposed amendments to try to at least have a unified and coherent approach to the matter and avoid the manager having undue headaches when it comes to presenting his report to the county council on Monday. The system is enormously improved and it is more transparent than it was previously. It is invidious to draw a comparison between what has taken place in Dublin Castle and what is happening at local authority level. There is no comparison. That is not to say there are no abuses. There can be in any system, but we must have regard to the strategic planning guidelines, the Dublin Transportation Office and the spatial strategy to such an extent that development is focused primarily around the railway station because it is viewed as the most convenient way of moving people in and out of Dublin, if that is what they wish to do. I was provoked into making that statement.

Deputy Neville asked a question that I would have phrased differently. How could a campaign be conducted to ensure the constitutional amendment would be adopted or what wording could be devised to secure adoption? I am not sure how that could be done.

On development land tax and the "use it or lose it" approach, under which one is taxed at an increasing rate the longer one holds on to land, there would be a degree of support for the proposition that the original 40% rate of capital gains tax did not allow land to be released because it would be subject to the 40% rate. It was only when the rate was reduced to 20% that land began to be released. I recognise that is something different from what Mr. Jones proposes. His suggestion is that there should be penalties for holding on to land. However, I make that point.

Mr. Jones suggested ring-fencing the money gained from the development tax for infrastructure, for example. How would he react to the proposition that this is already being done through development levies? There is effectively a tax through development levies which is meant to be spent on infrastructure in an area. However, the question arises as to which bottomless pit it enters.

If the range of measures suggested by Mr. Jones were implemented and if they had the desired effect, what would he say to the person who bought a house for €500,000 only to find it worth €300,000?

Mr. Jones

In answer to the first point, we did not wish in our submission to comment on public representatives in the Houses or those who are aware of other councils. We were reacting to what has emerged from past problems. It was not intended to comment on any individual; it is the system. We, like public representatives, are part of that system.

Perhaps we are in a unique position. There are many problems in places such as west Cork, which I represent, one of the major ones being, as I discovered when I conducted a recent audit within my political office, rural planning and once-off housing. Almost 60% of the problems with which I deal are in this area. If I were to take the view some members have that people ought to build their houses in villages and towns, without a shadow of a doubt I would lose my Dáil seat, and I am not talking about building a holiday home in Crookhaven or Beare Island or Ailihies. I am talking about people living in those remote areas, involved in fishing, farming or tourism or a mixture of those. They may say they have met a local girl and they want to settle down and work and play football in the area. Recently An Taisce expressed the view that we have one of the most conservative planning regimes. I have been a member of Cork County Council for 19 years and not once have we used a section 4, though it has been used in Kerry and Galway; I think it is an abuse of the system. Rural planning matters are like chalk and cheese when compared to Dublin, though perhaps that is why we are promoting this matter.

People say local authorities should step in. The county manager for our area for the past three or four years, a far-seeing man, has bought land banks around almost every town and village. He bought 60 acres of unzoned land around my home town of Bantry for €2 million and people thought he was daft. However, he has sold some of that land off and almost made back his money already. In Glengarriff he bought 16 acres for social and affordable housing and in Clonakilty, Schull, Skibbereen and Dunmanway it is the same. Could that be replicated elsewhere? We might not have this problem in that case. He has spent approximately €25 million in the past three to four years and if nothing happens for the next decade it is still a wise investment.

The kernel of the matter is that we are here to decide if legislative or constitutional change is appropriate. The Irish Planners Institute is saying the present system is not working and something major - constitutional change, legislative change or a combination of both - must be done, otherwise the chaos will continue.

Mr. Jones

In response to the first point, yes. The very fact that in 1973 Mr. Justice Kenny was asked to look at the price of building land means it was of concern then. I made a submission in 1985 or 1986 through a Member to an Oireachtas committee which was considering building land prices. Now, almost 20 years later, it is still a matter of concern. The way in which the market decides what one's home will cost is wrong and essentially that is why the system is not working, as one's right to a home is dependent on the vagaries of the marketplace. In our view that puts far too much balance towards the landowner - the individual - as opposed to the common good. That is our starting point. The market system of dealing with building houses without the intervention of the State, which is what we effectively have, is not working. Anyone buying a house will say that and I am sure members hear this every day at clinics. That is why it is not working. We need the State to redress that balance and, in our view, we need a mixture of constitutional amendment, which is what the committee is looking at, and legislation. That is a matter for the committee, by definition, but we feel the price of building land is based on a marketplace which needs intervention. Whether that is a matter of taking away development rights constitutionally or taxing those rights and giving that to the local authority so it can intervene is the kind of political decision the committee, as legislators, must come up with. Our starting point is that doing nothing will not work, just as it did not work in 1973 or 1985.

As for holding back land, the answer is no. The local authority could intervene and buy the land at 20% of its market value. The county manager in Cork is absolutely right but I suspect he had to pay market value for the land, and even if it is not zoned there would be a hope value. He might have spent €25 million but if a development land tax were in place he would get back €20 million and the landowners would still do well; they would just not do as well as they are doing now. What has been done in Cork, as described by the Chairman, should be done by every local authority but, as members will know, most authorities do not have the money to buy that land.

That is the real problem. As we all know, since 1977 local authorities have had virtually no financial freedom. Having a tax directly related to the value of the land which goes back to the local authority rather than into the coffers of the Department of Finance is the key. It means the authority can be what Neil Blaney said it should be back in 1963 when he produced the original Planning Act - a development corporation. Too many of our authorities are reactive, which goes back to another point the Chairman made. They look at planning applications and do their statutory duty every five or six years. In most cases they are not intervening and getting development going - they are reacting to the private sector. That change is necessary to get authorities active. If someone gets land zoned and sits on it and there is a shortage of land in the area, the authority should be able to use a CPO, give the owner 20% of the increased value and sell or licence it on to builders. The threat of the local authority being able to do that would in effect free up land and prevent people holding it. That is the key and that is why we are suggesting the graduated rate, with the higher rate depending on how quickly this is developed.

Ms Kenny

On what happened in Cork, the manager was obviously insightful but lucky in a way. I am aware that authorities in the greater Dublin area, whether they had money or not, took out options on land surrounding every village. Considerable land banks existed around every village but the minute the Celtic tiger began the developers were up and running, buying these land banks. If we are to start looking for land one cannot compete with the developers, who already have the options, so one is looking at building five or six miles outside villages. That makes no sense from a planning point of view so we have already lost. There is no place for the developer——

Deputy Neville

You are saying that around the villages of the greater Dublin area options have been taken on all possibly future zoned land at this stage?

Ms Kenny

Yes, in my county.

Chairman

That is an interesting point.

Mr. Treacy

On the quandary of rural housing, the national spatial strategy addresses the rural housing issue. People are locked into hubs and gateways and are not looking at what this strategy says about the development of rural Ireland. The strategy recognises that there are certain urban centres generating urban-generated housing into rural areas which are causing problems in servicing, commuting and so on. It also recognises that some parts of Ireland have been in decline.

If one takes the CLÁR programme and the district electoral divisions which have lost population since the foundation of the State by more than 50%, we have existing social and economic infrastructure in those rural areas, schools, post offices and churches, but those are closing down. The institute is not saying nobody should be allowed to live in the countryside. It recognises the need to sustain these areas. I am not aware of any planner in the country who has said that a native seeking to build in his own area should not get planning permission. We have to translate the national spatial strategy into regional strategies and county development plans where we identify those parts of the county which can accommodate this kind of development for those who wish to live the rural lifestyle.

We have to limit the amount of development that is allowed in those areas that are under pressure and have population growth. Such areas are not losing population - they are under pressure from urban-generated population growth. Policies should be put in place for those areas to accommodate genuine local needs. The problem, like many problems in Ireland, is that people are trying to circumvent the policies that are being put in place to facilitate local needs. Those local needs can be misinterpreted as someone saying: "I need permission for three houses so I can afford to build one of them." This is not an appropriate "local need".

Deputy Neville

What is Mr. Treacy's interpretation of "local need"? No houses are being constructed in Mountcollins, for example, which has lost three-quarters of its population. We would be delighted if someone came from Donegal and built a house. Is that a "local need"? Mr. Treacy mentioned the word "native".

Mr. Treacy

I was talking about using the principles of "local need" in areas where there is pressure of population, not areas that are becoming depopulated. I come from a county where for the first time in the history of the State it has had a population growth in the last census. Notwithstanding that, more than 60% of DEDs have continued to lose population. My local authority is more than willing to accommodate people who want to build in these areas and sustain the local community, be they from Dublin, Belfast, Scotland, France or wherever. We need to put together policies which are appropriate to the area's needs. We must put in place policies which cater for the problems and needs of areas. Rural Ireland is not a homogeneous entity. There are different types of rural Ireland. The NSS recognises this and the policies within the development plans should recognise this also. Local authorities should identify the parts of counties which have different characteristics and need different policies. This would solve the Chairman's problem of losing constituents.

Chairman

I suppose we could continue along these lines all day because it is a parochial problem. Nevertheless, people in peripheral regions of west Cork feel their constitutional rights are impinged because of difficulties with planning. My electoral area of Bantry, including Mizen Head, the Beara peninsula and Sheeps Head are all in the CLÁR programme area, yet it takes one to two years to try to get planning permission. What I would define as "local need" is a house that is occupied all year round, whether by a doctor coming into the area, a teacher or a local farmer's son or daughter, who are living locally. I am not referring to the scenario in Crookhaven where 75% of houses have lights on for two weeks of the year. This is no good to the economy of the area.

JOINT COMMITTEE ON THE CONSTITUTION debate - Tuesday, 22 Jul 2003

Property Rights: Presentations.

Mr. Michael Finnegan

Mr. Finnegan

Mr. Finnegan

Mr. Finnegan

Mr. Finnegan

Mr. Finnegan

Mr. Finnegan

Mr. Finnegan

Mr. Finnegan

Mr. Finnegan

Mr. Finnegan

Dr. Padraig Kenna

Dr. Kenna

Dr. Kenna

Dr. Kenna

Dr. Kenna

Dr. Kenna

Dr. Kenna

Dr. Kenna

Dr. Kenna

Dr. Kenna

Dr. Kenna

Dr. Kenna

Dr. Kenna

Dr. Kenna

Mr. John Sweeney

Mr. Paul Croghan

Mr. Tony McEvoy

Mr. Sweeney

Mr. Sweeney

Mr. Sweeney

Mr. Sweeney

Mr. Sweeney

Mr. Sweeney

Mr. McEvoy

Mr. Croghan

Mr. Croghan

Mr. Sweeney

Mr. Sweeney

Mr. Sweeney

Mr. Croghan

Mr. Barry O’Driscoll

Mr. Oliver Russell

Mr. O’Driscoll

Mr. O’Driscoll

JOINT COMMITTEE ON THE CONSTITUTION debate -
Tuesday, 22 Jul 2003