I am pleased to have the opportunity to discuss the Planning and Development (Housing) and Residential Tenancies Bill 2016 in the Seanad. I thank Members for facilitating the debate on this important Bill and the commitment I understand they have made to try to take Committee and Report Stages next week. The timeline for the legislation is important as we are anxious to complete it before the end of the year. I really appreciate the facilitation and hope we can work through some of the issues that will be raised.
As I think we can all agree, the current housing supply shortage is one of the most urgent and pressing challenges faced by the Government and the country as a whole. It has an impact on all forms of housing tenure, be it social, private or private rental.
This housing supply shortage has consequential knock-on impacts for house prices and rents, affecting thousands of individuals and households throughout the country who are in rented accommodation or who are trying to purchase homes, with knock-on impacts on their cost of living and further impacts on wage increase demands. The housing shortage also impacts on our ability to attract inward investment for the purpose of expanding our economy, so overall it has very real and significant impacts for society and individual families with which everybody in this Chamber is familiar, as well as our economy in general.
To put this in context, we are at present only building between 12,000 and 13,000 new housing units per year when we should be building upwards of 25,000 units to meet the demand that prevails. It is not an overstatement to say that this level of under-supply is a crisis situation which, as I have stated, has significant impacts on people in all walks of life. Accordingly, it is imperative that every possible effort is made to address it as urgently as we can to help better control house prices and rental cost increases. The Government's commitment to ending the housing shortage and tackling homelessness is clearly evidenced and underpinned in the Government's strategy, Rebuilding Ireland - Action Plan for Housing and Homelessness, two pillars of which are about building more homes and making our permitting and approvals systems more efficient and improving the rental sector. In this regard, the action plan includes a number of innovative legislative measures to rapidly increase housing supply and reinforce the rental sector. The main purpose of the Bill which we are discussing today is to give early effect to and underpin these measures, which include: the introduction of temporary fast-track planning arrangements in respect of large-scale housing developments; streamlining the timelines for presenting and considering local authority own development proposals through the Part 8 processes, including social housing proposals; providing for further limited extensions of duration of planning permissions for specified housing proposals; introducing certain legislative amendments to enhance the functioning of the private rented sector; and facilitating higher education institutes to borrow moneys from the Housing Finance Agency for the purposes of financing student accommodation provision.
The Bill also proposes to address a number of other urgent measures which are unrelated to the Rebuilding Ireland action plan and housing supply, namely, the introduction of new environmental impact assessment screening arrangements in respect of certain development works, including flood-related works, and enabling the transfer of moneys from the local government fund to the Exchequer in 2016, as envisaged in the recently-published Estimates. A legislative provision is required to allow this transfer arrangement each year. The environmental impact assessment element of this legislation followed a conversation with the Minister of State at the Department of Public Expenditure and Reform, Deputy Seán Canney, on ensuring we could progress flood relief programmes in a more timely manner than we have been able to do in the past. This maintains the integrity of the system but streamlines the decision-making process, which is what we are trying to do in respect of planning too.
Moving on to the contents and structure of the Bill, it contains 39 sections over five parts, to which I will now turn in more detail. Part 1, covering sections 1 and 2, contains the normal standard provisions dealing with the Title, collective citations, definitions and commencement. Part 2 comprises three chapters relating to amendments to the Planning and Development Act 2000 and is a substantial element of the Bill. Chapter 1, covering sections 3 to 19, deals with strategic housing developments and proposes the introduction, for a limited time period, of new streamlined planning processes in respect of large-scale housing developments, defined as those comprising 100 housing units or more or 200 or more student accommodation bed spaces, allowing the making of planning applications for such developments directly to An Bord Pleanála. The primary provisions are contained in sections 3 to 12, with the supporting provisions for this temporary measure contained in sections 13 to 19.
Rather than go through each section individually, I will instead outline the key elements of the provisions. The new fast-track planning procedures will apply for an initial period of three years - until the end of 2019 - with the possibility to extend that period by a further two years to coincide with the timeframe of Rebuilding Ireland.
Under the new procedures, An Bord Pleanála will be required to complete pre-planning application consultations regarding proposed developments with the concerned developers and the relevant local authority within a maximum period of nine weeks. It subsequently will be required to make a final determination in respect of planning applications for concerned developments within 16 weeks of receipt of the planning application. This will potentially result in planning decisions for concerned large developments within 25 weeks of commencement of the pre-application consultation process, as against the current two-stage planning process which can, in certain circumstances, take up to 18 to 24 months from initial design stage to securing ultimate approval.
I will give a practical example of why this is necessary. There have been 15 applications for housing developments of more than 100 units submitted to An Bord Pleanála this year and the average length of time it has taken, from pre-planning consultation through to getting a decision for those 15 applications, is 78 weeks. We are proposing to change that but also to involve local authorities and councillors in the pre-planning consultation. Perhaps we can tease the issues out here today because I know there are some concerns over how we can maintain a strong role for local authorities. I stress that this will be on land that has been zoned for housing and An Bord Pleanála is required to ensure that its decisions are consistent with that. For the first time, statutory timelines will be in place to ensure that developers and providers of finance will have some certainty, as will local authorities and An Bord Pleanála, with a nine-week pre-planning consultation process and a 16-week assessment and potential approval process for An Bord Pleanála. The big change is for developers rather than anybody else because the quality of their applications and of the work that will be required by them before they enter the formal pre-planning consultation will be a lot higher than it is at the moment. Those Members who have been in local authorities and who have worked with them know that poor applications often come in, followed by a long drawn-out process in preparation for a formal planning application with county council engineers, architects and designers to bang the application into shape before it goes to a formal application process with the local authority. This can take months and months. A lot of that early work needs to be done in a much more professional way and this will mean that the best developers will have a system that supports them.
To ensure that the board has capacity to manage the flow of proposals, a dedicated strategic housing division will be established in the board with additional dedicated technical and administrative support resources to conduct the pre-planning consultation arrangements and make determinations on planning applications in respect of such strategic housing developments. I had quite a long meeting with An Bord Pleanála yesterday to understand what it needs.
I also make the following points on the proposed new fast-track planning procedures. First, the vast majority of large housing development proposals currently end up being appealed to An Bord Pleanála resulting, as I have indicated, in decision timelines of up to two years before the granting of final planning permission. This, in my view, is much too long in the current climate when large volumes of housing supply are urgently required to address the shortage situation in the right areas. This is the key thing - we are not going to promote large-scale housing development in parts of the country where it is not viable, which was the mistake that was made in the past.
The reality is house prices will not allow it.
Planning applications to the board in respect of these housing developments will be confined to lands already zoned for residential purposes by the local elected members in local development plans. In addition, public participation will remain a fundamental part of the process. In this regard, my Department has obtained legal advice from the Attorney General that the proposed arrangements are fully compliant with the requirements of the Aarhus Convention, the EU directive on public participation in environmental decision-making, and the environmental impact assessment directive.
The procedures for a new direct application to An Bord Pleanála in respect of large housing developments are not entirely new. They are modelled on the existing arrangements which have operated in respect of strategic infrastructure developments since 2006. Accordingly, they are well tested. Ultimately, as I have indicated, the new streamlining procedures are intended to provide greater certainty for developers for the timelines for decision making, while also facilitating the earlier provision of much needed housing supply and helping to address the current housing supply shortage situation.
Chapter 2 of Part 2, covering sections 20 and 21, proposes to introduce new screening arrangements for the conducting of environmental impact assessments, EIAs, in respect of certain types of works, including emergency flood relief works with the aim of further streamlining the process for the undertaking of such types of works. Some Members come from towns which have been waiting for the necessary flood protections and relief works to be put in place. Significant delays can be encountered in the undertaking of flood-related works having regard to the EIA requirements in the planning system. In this regard, flood-related works have a relatively low threshold for EIA purposes and for planning permission purposes. EIAs are required for most flood-related works, even though many of the proposed works do not have any environmental impacts.
The introduction of the new EIA screening arrangements will enable planning authorities to determine if an EIA is required for specific proposed works with the screening decision having to be made within a maximum of four weeks. If an EIA is screened in, a full EIA will be required in respect of the proposed works, while planning permission will also be required. However, if an EIA is screened out by virtue of no significant environmental impacts being anticipated arising from the undertaking of the proposed works, no EIA will be required. Planning permission will also not be required if the proposed works are below the exempted development thresholds. These new provisions should ultimately reduce the number of EIAs having to be undertaken in respect of flood works, thereby generally speeding up the process.
Chapter 3, covering sections 22 and 23, relates to two further amendments to the Planning and Development Act. Section 22 provides that a further extension of duration of permission may be granted by a planning authority in case of a housing development comprising 20 houses or more, where the authority considers that a further extension is necessary to enable the development to be completed. This will remove the requirement to go through the planning process again and expedite the completion of the housing developments in question. Many medium-sized housing developments did not move ahead because house prices collapsed and the viability of building was not there for the past nine years. As a result of that freeze period, planning permissions are now running out. Rather than having to go through a long application process again, if it is consistent with the local area plan, then those zoned lands would progress. If a chief executive of a local authority is happy with that, there is a facility now to automatically provide for a second renewal, a provision not currently provided for in law.
Section 23 relates to new streamlined procedures to be followed by local authorities under section 179 of the Planning and Development Act and Part 8 of the planning regulations under the Part 8 process relating to the bringing forward of local authority own development proposals, including social housing, local roads, fire stations, libraries, etc. Most local authority own development proposals are generally approved by the elected members fairly quickly. However, on occasion some delays can be encountered with social housing projects arising from local opposition. Under the current provisions, no maximum timeframe is set for deciding on local authority own development proposals under the Part 8 process. This is a major cause of the delays encountered in some, but not all, circumstances.
Consequently, the Bill proposes several amendments to the existing section 179 provisions, including the setting of a maximum timeframe of 20 weeks for the determination of local authority own development proposals by the elected members, thereby providing greater certainty in the progression of such development proposals, including the easier delivery of social housing, in particular. There was much discussion before this section was put together. Local authority members were concerned that there was a danger that they might be taken out of the process. We have ensured they are the ones who vote this through. We have introduced a timeline by which the process has to happen. Essentially, this puts some pressure on a chief executive of a local authority and his or her team to be able to put the proposals, along with any amendments, to councillors in a timely manner. Again, it is about having certainty around timescale. When there is an awkward planning application through a Part 8 process and because of local political considerations, the matter gets put off. We have to find a way to make decisions and move on with projects which we need to make happen.
Part 3, covering sections 24 to 37, inclusive, and the associated Schedule, relates to the rental sector and provides for amendments to the Residential Tenancies Acts. We are all aware of the acute pressures in the rental market. We had a useful and informative debate in this House last month on the pressures on rents in particular. These pressures are driven by several factors, including rising demand, a lack of supply and the high costs that indebted landlords face in servicing their loans. The problems in the rental sector are one of the most significant issues facing us today and an absolute priority for me. That being said, there is no doubt that the problems in the rental sector are part of a larger problem.
Ireland is in the midst of a housing crisis. The problems caused by high rents reflect, and are reflected in, the other issues facing the housing market. There are not enough homes for first-time buyers, increased demand for social housing and unacceptable levels of homelessness. While many factors contribute to these problems, the one factor common to all of them is the prolonged and chronic lack of supply of new houses.
The Bill implements the commitment in pillar 4 of Rebuilding Ireland to bring forward legislation to amend the Residential Tenancies Acts for early enactment. One of the most significant proposals to be introduced in the Bill is to be found in section 30. It provides that where a landlord proposes to sell 20 or more units within a single multi-unit development at the same time, the sale will be subject to the existing tenants remaining in situ. The purpose of this amendment is to prevent a future recurrence of situations where large numbers of residents in a single development have had their tenancies terminated simultaneously.
Section 31 further improves security of tenure for tenants by providing for the abolition of a landlord's right during the first six months of a further Part 4 tenancy to terminate that tenancy for no stated ground. This is an important amendment and one that has been welcomed both by those working with tenants and those working to prevent homelessness.
Sections 33 to 37, inclusive, provide for several other early actions which will enhance the Residential Tenancies Board's enforcement and dispute resolution powers, including accelerated dispute resolution timeframes. We cannot have a situation where we have a falling out between a landlord and a tenant, whether it is non-payment of rent or some other issue, that goes on for months. The powers and mechanisms have to be available to the Residential Tenancies Board to be able to act on that, to get to the bottom of the issue and to make a determination consistent with law.
That is what we are doing here. The provision of the Bill, as committed to in Rebuilding Ireland, will be supplemented by a new rental strategy which I intend to launch next month with a view to delivering a mature and stable rental sector, providing a balance between the rights and responsibilities of both landlords and tenants. I know both are under pressure in many cases at present. Many families who find themselves homeless have been pushed out of the market because of those pressures. The provision in the Bill is a fundamental part of this process but it is only a part of the process. I hope I will be returning to the Seanad to debate that rental strategy before the end of the year.
Part 4, covering section 38, gives effect to action 4.9 of Rebuilding Ireland, to amend the Housing Finance Agency Act 1981 to enable the Housing Finance Agency, HFA, to provide low-cost finance to higher education institutes for the purpose of providing student accommodation.
In addition, and as the new initiative identified in Rebuilding Ireland, the Housing Agency is to be provided with capital funding of €70 million with the specific focus of acquiring properties from financial institutions for social housing nationally, thereby increasing social housing provision. At present the Housing Agency is talking to banks primarily with a view to acquiring properties that are vacant so that they can get them into the market faster in order to alleviate some of the pressures on the social housing provision and supply. That €70 million is effectively seed capital and the agency should be able to acquire over time about 1,200 homes in this category. We may go beyond that, but that is the target initially. As a support mechanism towards giving effect to action 2.9 of Rebuilding Ireland, provision is being made for the HFA to lend to the Housing Agency for this purpose, subject to obtaining the relevant ministerial consent and compliance with the prevailing fiscal rules. In other words, we cannot simply spend money and ignore it in the context of our overall expenditure ceilings. We must talk to the Department of Finance in that regard.
Part 5, comprising section 39, is aimed at enabling me, as Minister for Housing, Planning, Community and Local Government to make the required payment to a maximum amount of €420 million from the local government fund to the Exchequer, as envisaged in the Revised Estimates volume in 2016. It is necessary to provide for the legislative underpinning of this proposed transfer of funding to the Exchequer by amending section 6 of the Local Government Act 1998.
I think Members will agree that this Bill contains a number of fundamental and important legislative measures emanating from the Government's Action Plan on Housing and Homelessness. We have a great deal of debate on that, both in committee and outside it. Specifically the two pillars relating to building more homes and making our permitting and approval systems more efficient and improving the private rental sector. As I have outlined, these are priority matters for Government and indeed for all of us.
I look forward to the contributions from Senators in debating the detail of this Bill. I look forward to continuing the debate into next week so that we can bring it to the Dáil and enact it very early in the new year.