Tuesday, 27 January 2004

Questions (867, 868)

Enda Kenny

Question:

986 Mr. Kenny asked the Minister for the Environment, Heritage and Local Government if he has considered exempting social housing providers from development charges which would allow housing to be provided at the cost of the land at existing use values; the cost of construction which would have an impact on reducing the overall cost; and if he will make a statement on the matter. [1873/04]

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Enda Kenny

Question:

987 Mr. Kenny asked the Minister for the Environment, Heritage and Local Government if he considers that the imposition of development charges at local authority level will add to the cost of new housing; the estimated average percentage increase in new house prices as a consequence; and if he will make a statement on the matter. [1874/04]

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Written answers (Question to Minister for the Environment, Heritage and Local Government)

I propose to take Questions Nos. 986 and 987 together.

While the Minister for the Environment, Heritage and Local Government may comment on a draft development contribution scheme during the consultation period, it is ultimately for the elected members of the planning authorities to determine the level of contribution for their own functional areas and the classes of development to which the contributions will apply, having regard to the actual cost of providing infrastructure in that area. Circular letter PD 4/2003 of 27 June 2003, which issued to each planning authority, advised that the basis for determining the contribution levels in the scheme should be justified and supported. That circular also recommended that, in accordance with accepted practice, development contributions should not be charged in respect of social housing units, including those which are provided in accordance with an agreement made under Part V of the Planning and Development Act 2000, as amended under the Planning and Development (Amendment) Act 2002, or which are provided by a voluntary or co-operative housing body, whether or not under Part V.

I do not anticipate that the contributions levied will unduly affect the price of houses and the level of inflation. The major driver of house price increases in recent years has been the demand for housing, fuelled by rapid economic growth and demographic changes. The Government has responded to this unprecedented demand by focusing on measures to boost supply as the most appropriate way to bring moderation to the rate of house price increases. The key component of this strategy is ensuring a supply of serviced land for housing which the development contribution system helps fund.

Provisions governing the acquisition of land at existing use value for the provision of social and affordable housing are set out in Part V of the Planning and Development Act 2000.