I apologise if my opening remarks are a little longer than usual but Members will appreciate the Bill is comprehen sive and requires some explanation or elucidation.
Just over two years ago I launched a review of Irish planning legislation in fulfilment of a commitment in the Government's programme, An Action Programme for the Millennium. After much anticipation the Planning and Development Bill, 1999, has been published and people in all sectors have been familiarising themselves with it proposals. Many have already given initial reactions and, as one would expect, these reflect widely differing viewpoints. However, all accept that the Bill represents a genuine effort to reform in a fairly fundamental way and to update our planning laws. The Bill is the outcome of a great deal of work in my Department and has been greatly assisted by views received from all quarters. I acknowledge that everyone involved went into great detail in assisting the consultation process. It has also been subject to a lot of advice from the Attorney General's office. While some people may quibble with individual aspects of the Bill, it should be seen as an integrated package of proposals which strikes a fair balance that is right for today's world. When I commenced the review I said the planning system of the 21st century must be strategic in approach, be imbued with an ethos of sustainable development and deliver a performance of the highest quality.
In relation to the strategic approach, for the first time the Bill introduces a structured hierarchy of plans from the broad national picture down to local development level. The local authority development plan retains its status as the anchor of our planning system. However, it will be informed by regional planning guidelines which will provide a long term strategic framework for the development of the whole region. These guidelines will in their turn be placed in the context of a national spatial strategy. My Department will undertake the strategy as part of the Government's policies for balanced regional development to be set out in the forthcoming national development plan. Local area plans will bridge the gap between the broad objectives of the development plan and actual development proposals.
The concept of sustainable development is my second principle and it has been woven into the fabric of the Bill. On first glance it can be seen that the "proper planning and development" of an area has been replaced as the Bill's touchstone by "the proper planning and sustainable development", but it goes deeper than a change in terminology – the principle of sustainable development has been woven into the fabric of the Bill. For example, the development objectives to be contained in development plans reflect the environmental concerns of the modern age. Environmental assessment of regional planning guidelines, development plans and local area plans is provided for. The interface between pollution control licensing and planning control has been revised to allow a more holistic approach to be adopted in considering development which requires IPC licences.
The Bill introduces new measures to protect the landscape, simpler procedures to draw up tree preservation orders, measures to facilitate the protection of public rights of way and so on. We gave a good deal of thought to the question of defining sustainable development in the Bill. However, it is such a dynamic and all-embracing concept, and one which will evolve over time, that any legal definition would tend to restrict and stifle it. Weaving it in to the fabric of the Bill, as we have done, gives effect to the concept in a holistic and comprehensive way.
My third principle was to ensure that the Irish planning system delivers a quality service. I am seeking quality development plans, quality and timely decisions, an accessible planning service and proper enforcement; the Bill makes many changes to ensure that these can be delivered.
The local authority remains the key decision making body in relation to planning control. In order to strengthen this position the Bill establishes for the first time in Irish planning law statutory recognition for any submissions or observations which members of the public make to a local authority regarding planning applications. This is an important new right. In turn, the Bill provides that an appeal to An Bord Pleanála will only be available to those third parties who showed an interest in the initial application. The position regarding the right of appeal for third parties will still remain the most liberal in the European Union.
The Bill places an emphasis on timely decision making and tightens up a number of time limits under current law. However, these proposals should not adversely affect the quality of local authority decision making, once they are factored into the authority's procedures. The statutory recognition given to pre-planning discussions in the Bill should also aid the decision making process. Strategic development zones are being introduced to provide greater certainty in planning for development which is of strategic importance to the national economy, especially where we have to compete for internationally mobile investment.
The forthcoming publication of the national development plan will provide for further huge investment in infrastructure and the Bill will help us to deliver that infrastructure in faster time scales than we have been used to in the past. As is the case for any law, if people are to respect the planning laws they must be assured that they will be enforced. This Bill introduces major reforms to the enforcement code. It has been simplified and strengthened to respond to people's genuine concerns on matters such as unfinished estates. The enforcement provisions of this Bill will make people think twice before ignoring planning law and in the future I hope to see the widespread use of retention permission being used only to rectify genuine mistakes, not as a means of circumventing controls, as seems to happen currently.
At the moment, primary planning law is contained in nine Acts dating from 1963 to 1999, and five sets of environmental impact assessment regulations from 1989 implementing EU directives. This Bill will consolidate all the Acts and much of the environmental impact assessment regulations in one Bill to the benefit of all users of the planning system. As well as consolidating existing provisions, the Bill contains many significant changes and new initiatives.
The Bill is very large, with 245 sections set out in 18 parts with six schedules, each of which will receive detailed consideration on Committee Stage. I intend today, therefore, only to outline in general terms each Part of the Bill. The explanatory and financial memorandum will give more details and, in particular, it indicates where new provisions have been introduced and where old ones have been re-enacted; almost all provisions of the existing planning code have been subject to some revision.
I will deal with Part V, housing supply, first and in greater detail since it introduces a major new dimension to planning legislation and contains the most radical and probably the most contentious provisions of the Bill. The provision of adequate housing for all members of society has been a major issue of public policy for Governments of all shades since this State gained its independence. It has further been a traditional aim of Government to facilitate people in buying their own homes where this is possible. This has had a beneficial, stabilising effect on Irish society and home ownership is an aspiration which the vast majority of people hold dear. This Government will continue to support that aspiration. We believe the people of the nation also support that aspiration fully, but the State has a responsibility to assist those who cannot afford to house themselves in the market and this has been done through the provision of local authority or other social housing. Part V of this Bill is designed to underpin these two planks of our housing policy. The increase in house prices in recent years has now put the aspiration to home ownership beyond the reach of many people on reasonable incomes. Average new house prices in Dublin doubled between the December quarter in 1994 and the December quarter in 1998 to £133,000, and increased nationally by over 80 per cent to £107,000. On the basis of traditional mortgage lending criteria of two and a half times principal income and once second income, the maximum mortgage available to a couple earning, say, £20,000 and £15,000 per annum would be £65,000. The average industrial wage is currently around £15,000, yet one index of house prices shows the average price paid by first-time buyers nationally as £93,000. This points up the affordability gap which has developed for first-time buyers over recent years.
The effect of price escalation on first-time buyers is also reflected in a reduction in the pro portion of mortgage loan approvals to first-time buyers. For example, it is estimated that, in Dublin, the figure fell from around 60 per cent in 1994 to about 40 per cent in 1998. Social housing needs, the figures for which were published last week, show that the number of households in need of local authority housing rose by 43 per cent between 1996 and 1999 to a total of almost 40,000 households. This rise is being driven to a great extent by the increase in housing costs and is not a sustainable or acceptable position.
This Government will not stand by while housing is priced out of the reach of thousands of people and local authority waiting lists continue to mount rapidly. In the long run these trends are profoundly damaging to social cohesion and our future economic well being. They are no less damaging to the construction industry which builds the houses and the people who work in it. They will be reflected in wage demands from these and other workers who see the very houses they are building being priced out of their reach. Part V of this Bill will make a very positive contribution over the years to come in providing sustainable housing supply for all segments of the market. However, I must stress that the Government is not shifting its housing responsibilities on to developers. What we are trying to achieve is to bring about a situation where the shortage of social and affordable housing for the lower and middle income sections of the community, is addressed in the context of the planning system when decisions are being made about the zoning of land for housing development.
Builders will not be required to build houses and hand them over gratis to the local authority, as some have suggested. However landowners/developers will know that a pre-set share of land designated for housing development will have to be reserved for social and affordable housing. The share to be so reserved must be based on actual assessments of the existing and projected needs by local authorities in their areas and is not an arbitrary figure, as some have suggested. That is a reasonable intervention and is very far from pushing responsibility from Government on to builders.
It is important to state that the Government is not simply relying on this legislative initiative to tackle the housing problem. This must be seen as one of a wide ranging series of fiscal, taxation and administrative measures. I will mention just a few. For example, this year has seen the social housing programme brought to its highest level in 13 years. A new four year multi-annual programme providing an additional 22,000 local authority houses will commence next year, representing an increase of over one fifth on the existing local authority housing stock. We are providing enhanced support for the voluntary housing sector. A new local authority affordable housing scheme has also been introduced. The Government introduced the serviced land initiative with a budget of £39 million over three years and 167 schemes have been approved under the initiative which will open up 100,000 additional sites for residential development. The Government commissioned two housing reports by economist Peter Bacon and has acted swiftly on the recommendations of those reports. Among these were the steps to increase residential density and to lower the capital gains tax on land zoned for residential development.
Part V of the Bill fully integrates housing supply into the planning system. Each development plan must now contain a housing strategy which means that the plan must provide for the housing needs of the present and future population of the area, and ensure that adequate land is zoned for this purpose. In particular, the strategy must assess the needs for social and affordable housing, the mix of house types that will be required to meet the needs of the different households, including, for instance, the disabled, and it must also make provision to counteract social segregation in housing. Society in Ireland has paid too high a price for the segregation of the past and we must now seek to support more inclusive and better integrated communities in the future.
The needs and policies indicated in the housing strategy must be reflected in the development plan which must include objectives to give effect to the strategy. These objectives must be based on specific assessments to be made by the planning authority in relation to the need for social and affordable housing over the period of the plan and, on this basis alone, they must then require that a percentage of the land being zoned for housing development be reserved for social and affordable housing. The specific percentage will depend on the needs identified in the strategy but cannot exceed 20 per cent in any case. I expect that this percentage will vary throughout the country reflecting actual conditions in different local authority areas. It will not be a national figure but must be based on the individual housing strategies of each local authority.
In order to ensure that the quota of land to be reserved for social and affordable housing does not, in any case, have a disproportionate impact on landowners and developers, or on the normal operation of the market, the legislation places an upper limit on that quota. The limit of 20 per cent stipulated in the Bill is quite moderate by reference to the fact that, historically, between one quarter and one third of net new households have obtained accommodation from local authorities since the 1930s. While the share of total housing output represented by local authority and social housing in recent times has been in the order of 10 per cent, the number of households currently in need of local authority housing is almost 40,000. Against that background, the total housing units, both public and private, completed last year was 43,000. This shows the relative scale of social housing needs and does not take account of the many households affected by the affordability gap that are not represented on local authority waiting lists. On that basis the 20 per cent is, if anything, a conservative cap but one that strikes a reasonable balance between the different interests involved.
When planning permission is applied for in respect of this land the local authority will impose, as a condition of permission, a requirement that the stated quota of land be reserved for social and affordable housing and transferred to the authority. The authority will pay the owner a price based on its existing use value. In the case of land purchased before the Bill was published on 25 August the actual price paid for the land, if greater, will be recoverable together with any holding charges.
The rationale for setting the compensation at this level is that the zoning of land is in the grant of the local authority. This is done as part of the development plan, the so called environmental contract with the community, according to the Supreme Court. A decision by the local authority to zone land for residential development could increase the value of that land between ten and one hundred fold. No one is entitled to have his or her land rezoned. Therefore, it is perfectly reasonable that the greater community, through the local authority, should be able to reap for the public good a relatively small proportion of the gain they confer on the land owner. Furthermore, local authorities should be able to ensure that by their decision on zoning they are not severely restricting their capacity to provide social or affordable housing for those who need it.
I cannot believe, as some have suggested, that these considerations of the common good are not of the kind contemplated by the Constitution in Articles 40 and 43. Hence it is not onerous or unfair to provide that the increased value is moderated to a limited degree by requiring that up to 20 per cent of the land can be acquired by the local authority at the existing use value. Full development value will, with the benefit of the zoning, still apply to over 80 per cent or more of the land involved. The landowner suffers no loss on the transferred land and continues to make a significant gain on the non-transferred land. It may also happen that some housing strategies, either initially or in the future, will show no need for social or affordable housing. The Government's policy to increase residential densities will stand to the advantage of land owners and developers.
After the land is transferred to the local authority it can then build or arrange for the building of houses on the land for qualified applicants for social and affordable housing. This housing can be made available by straight sale or shared ownership lease in the case of affordable housing, or in the case of social housing the land can be built on by the local authority or given to a voluntary housing body. There is also the option of sites being sold to qualified individuals. I will introduce an amendment on Committee Stage to make it clear that, in lieu of transferring the land, a developer and the local authority will be able to make arrangements whereby the developer will provide houses in the development at an agreed price to the local authority or a nominee of the authority.
Affordable housing may only be sold to eligible persons, defined as persons whose relevant income would be inadequate to obtain a sufficient mortgage to purchase on the open market a newly built house to meet their accommodation needs. The relevant income is based on accepted industry norms of 2.5 times income, plus once the second income in the case of a couple. The local authority will determine the order of priority of eligible persons in the allocation of affordable housing by applying a proper fully transparent scheme of priorities, just as in the case of local authority housing allocations.
There is provision for a claw back where a house is sold on within ten years to prevent profiteering. In the case of such a sale the seller must pay to the local authority the proportion of the selling price represented by the initial free equity, that is, the difference between the market value of the property and the actual initial purchase price. There is an abatement of 10 per cent for each year of occupation.
There has been some comment that allowing the purchaser of an affordable house to retain the full value of the property after ten years is unfair. However, I consider this a reasonable compromise in ensuring there is no profiteering while at the same time allowing purchasers to retain the full benefits of ownership after a reasonable period. Much of the comment has been based on the assumption that the significant house price increases of recent years will continue at the same rate. That would be an erroneous assumption. Interventions by the State for reasons of the common good are not unusual and give rise to significant benefits on occasion. For example, many people have benefited from having land located in areas designated by the State for urban renewal incentives. The fact that a benefit may accrue to a particular person does not negate the validity of a scheme.
I am anxious to ensure Part V will have effect at the earliest possible date. Local authorities share that interest and I ask them – and I have already asked managers – to start right away on preparing the groundwork for their housing strategies. The Department intends issuing guidelines to local authorities on the operation of this part of the Act. Work on that will start shortly and there will be no delay in bringing this part of the Bill into operation.
I again emphasise that these proposals are designed to meet a clearly identified concern of public policy and the common good. The measures are well targeted, clearly defined and will have regard to the prevailing and anticipated housing needs and situation in any local authority area. The measures are proportionate and relevant to the issues being tackled. The proposals have been prepared having regard to the constitutional principles of fairness, equality and proportionality. The detailed nature of the proposals in Part V is quite deliberate and is necessary to meet the constitutional imperative that the intention of the Legislature is spelt out precisely in matters such as these.
I will now deal with the other parts of the Bill much more briefly. Part I contains provisions of a general nature and amends provisions from the 1963 Act. An important amendment in this area is to the exemption of agriculture from the planning control system. This allows for the introduction of planning controls over initial afforestation and peat extraction. The general exemption in legislation will be replaced by more appropriate exemptions in regulations.
The development plan system, which provides the framework within which all planning decisions are made, is set out in Part II. It includes the important provisions to streamline the production of development plans, while enhancing public consultation at the initial stages, and places the development plan within a system containing regional planning guidelines and local area plans. The objective in relation to development plans is to develop a sense of ownership of the plan within the community which it serves. Local area plans will assist local authorities in ensuring adequate facilities are provided for major new developments. The Minister's power to determine general policy and require changes in plans have also been clarified. The provisions in this part radically reform the provisions of the 1963 Act.
Part III deals with the development control system and amends the provisions set out in the 1963 Act. The Bill provides that planning decisions must be based on the proper planning and sustainable development of an area. The Bill tightens up a number of time limits for making decisions. The right of third parties to make submissions and to have them considered is set out for the first time in planning law. In return for that and to make a contribution towards the administrative costs involved, there is a provision for the charging of fees for third party submissions. The amount of the fee will be set out in regulations. I intend that the fee will not be such as to discourage genuine submissions, which I readily acknowledge can assist in ensuring full consideration of all issues. Third parties will have to make a submission on a planning application in order to exercise a right of appeal to An Bord Pleanála.
The provisions of the Planning and Development Act, 1999, on the protection of our architectural heritage, which was considered by this House before the summer, are re-enacted in Part IV and will come into effect on 1 January 2000. The provisions relating to An Bord Pleanála contained in the 1976 and subsequent planning Acts are set out in Part VI subject to modifications. The permanent membership of the board has been increased from six to seven members and the procedures of the board have also been simplified. The openness of the board's decision making is being enhanced also. The board will have to state the main considerations and reasons for its decisions. Where the board grants permission in contravention of a development plan it will be obliged to state why it contravened the plan. The board has been given new powers to dismiss appeals where appeals are made with the intent of extracting money from a developer or solely for the objective of delaying a project. The Bill also provides that the board may operate in separate divisions and, therefore, maximise the efficient use of its time and resources.
Part VII restates the requirements from the 1976 Act on members and officials of planning authorities and An Bord Pleanála to disclose any property and business interests. It also contains a new provision for codes of conduct to be drawn up for staff and members of planning authorities and the board. These will be complemented by comprehensive ethics provisions for local authorities in the local government Bill, which I will be bringing forward shortly.
New provisions on enforcement are contained in Part VIII. They aim to simplify and build on the existing provisions to respond to genuine concerns about past failures in enforcing the planning code. Maximum fines have been increased to £10 million and it will no longer be possible to use retention permission as an escape hatch when enforcement action is threatened. I should also point out that section 34 will allow a planning authority to seek a court order to refuse permission based on a developer's past record where that developer has been in previous breach of a planning permission. This matter has been the subject of Private Members' Bills in the Seanad and Dáil in recent years and I have responded in a constitutional manner to the concerns raised in the debates on those Bills.
A major innovation under the planning code is the establishment of strategic development zones under Part IX. A streamlined planning process will operate in specific sites selected by the Government for reasons of strategic importance to the national economy. These zones will offer more security in planning terms for potential investors in making decisions on location because of the certainty regarding the outcome of a planning decision and the time taken to make that decision in these zones. There will be full public consultation when drawing up planning schemes for SDZs with an appeal to An Bord Pleanála. However, once a scheme has been made there will be no appeal to the board in relation to the decision on developments which wish to set up in an SDZ in compliance with a planning scheme. Environmental licensing, where required, will not be affected. In other words, IPC licensing, etc., will continue in the present manner.
Part X incorporates in primary legislation provisions on environmental impact assessment which were previously contained in European Communities regulations. Major changes include the transfer to An Bord Pleanála of the Minister's powers to approve local authority development subject to EIA. This Part will also facilitate future changes to be made to the present system of identifying projects for which an EIA is required. In this regard, I should mention that my Department will be carrying out a review of the EIA system in Ireland over the next few months.
Part XI concerns development by local and state authorities. Under section 163, councillors will in future receive a full planning report on local authority development, that is Part X developments and processes, and will have the power to reject or modify a development. The persistent problem of unfinished housing estates will be settled finally by this Bill. Local authorities will be under an obligation to take the estates in charge if they do not take action against the defaulting developer.
The provisions of the 1990 Act on compensation are consolidated into the Bill in Part XII. A number of additional instances when compensation will not be payable are outlined in the Fifth Schedule. One important change arises out of the new principle in the Bill that zoning lasts only for the lifetime of the plan. Compensation will, therefore, not be payable as a result of "down zoning".
Part XIII includes a number of provisions from the 1963 Act concerning amenities, for example, on designation of special amenity areas. The decision on whether to confirm a special amenity area order will be transferred from the Minister to the board and such orders will no longer have to be laid before the Houses of the Oireachtas. This part also contains new powers to protect valuable environments, for example, through the designation of landscape conservation areas and through revised and simplified tree preservation orders.
Part XIV transfers responsibility for approving compulsory purchase of land, local authority EIA projects and road schemes from the Minister to An Bord Pleanála. Procedural deadlines have been introduced to ensure that the process happens within a set timeframe. The board will have an objective to deal with CPOs and EIAs within 18 weeks, the same period that applies to planning appeals.
A new system for licensing outdoor events and regulating funfairs is set out in Part XV. Licensed events will in future be exempt from the requirement to seek planning permission. Part XVI amends the financial provisions from the 1963 Act. Section 222 re-enacts the power to provide for fees in regulations with the additional provision to allow for fees to be charged for making submissions or observations to a planning authority regarding a planning application.
Part XVII contains certain miscellaneous provisions, many of which are re-enacted from the 1963 Act. The Environmental Protection Agency Act, 1992, and the Waste Management Act, 1996, are being amended to allow planning authorities take a more holistic view of developments which require an integrated pollution control licence or a waste management licence. A new provision will allow the Minister to monitor the performance of planning authorities and, if necessary, to appoint a commissioner to carry out the planning functions of an authority where there have been serious inefficiencies in performance or other problems have arisen. Part XVIII contains standard provisions on commencement, repeals and transitional arrangements.
There are six Schedules to the Bill. The First Schedule sets out the objectives that a planning authority may include in its development plan. This has been substantially redrafted to take account of the principles of sustainable development. The Second to Fifth Schedules concern compensation, including the rules for determination of compensation and reasons for which compensation is excluded. The Sixth Schedule, as is usual, sets out the Acts which the Bill repeals.
I acknowledge the fact that new functions are being given to local authorities and An Bord Pleanála, and the greater demands of the Bill in regard to some existing functions will require the allocation of greater resources and the ongoing development of planning skills. If a good planning system is seen as an essential guarantor of our future quality of life, and I think it is, there will be general acceptance that these resources should be provided.
I look forward to debating the detail of this Bill on Committee Stage. Many organisations are studying the Bill and will be making submissions to me over the coming weeks. I have also had good feedback from the seminars which my Department organised on the Bill. The last of these will be held in Cork tomorrow. Senators, in particular, will be familiar with the planning system and I look forward to a good debate in the Seanad. I am open to any suggestions which will improve the Bill. I want to assure Senators that their views and amendments will receive the fullest and most positive consideration by me. I will table a number of amendments which are based on the comments which I have already received during this process. I encourage Senators to be constructive and positive in their views and to bring forward their ideas to improve the Bill. It has been suggested that Part V might be modified, somewhat limited or more limited than it is. I must say to Senators and anyone else who may be thinking that there will be any row back on that part of the Bill that it is not my intention. I am prepared to discuss openly how it can be implemented but not any type of row back on it.
Tugann an Bille seo uirlis éifeachtach dúinn chun córas pleanála níos fearr a chur i bhfeidhm sa tír seo: córas pleanála a ligfidh don fhorbairt atá riachtanach dul ar aghaidh go tapaidh ach i gcónaí i slí a chosnaíonn ár dtimpeallacht agus ár n-oidhreacht. Dá bhrí sin, molaim go láidir an Bille seo don tSeanaid. Go raibh maith agat.