Tuesday, 9 April 2019

Questions (68, 117)

Mick Wallace

Question:

68. Deputy Mick Wallace asked the Minister for Housing, Planning and Local Government his plans to publish the 31 progress reports on the implementation of the vacant site levy he has received from local authorities; if he has considered changes or amendments to the vacant site levy further to the information contained in such reports; and if he will make a statement on the matter. [16352/19]

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Mick Wallace

Question:

117. Deputy Mick Wallace asked the Minister for Housing, Planning and Local Government if he has considered examining reducing the 0.05 ha minimum site size threshold for the vacant site levy given that over 160 sites were identified by Dublin City Council as being vacant but were under 0.05 ha; and if he will make a statement on the matter. [16350/19]

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Oral answers (14 contributions) (Question to Housing)

The first question relates to the 31 progress reports on the implementation of the vacant site levy he has received from local authorities. I have received them via freedom of information request, but it might be helpful for him to publish them. They make for interesting reading and it is a pity it took so long to get these progress reports. Has the Department considered amendments to the vacant site levy on the basis of the information contained in these reports, which highlight major problems with the levy introduced in 2015?

I propose to take Questions Nos. 68 and 117 together.

Under the vacant site levy provisions of the Urban Regeneration and Housing Act 2015, planning authorities are empowered to apply a vacant site levy of 3% of the market value of relevant vacant sites. These arrangements commenced in respect of vacant sites included on local authority vacant site registers prior to 1 January 2018 with payment of the levy due in January 2019.

When I was appointed Minister, I initiated a review of the measure and introduced amendments under the Planning and Development (Amendment) Act 2018 aimed at further strengthening the vacant site levy provisions. These amendments included increasing the rate of the levy from 3% to 7% for sites on local authority vacant site registers from 2019 onwards and the removal of the possibility of applying reduced or zero rates of levy for sites on registers that are subject to a site loan which is greater than a specified percentage of the market value of the site, reflecting the improved economic circumstances and higher property prices since the levy measure was originally introduced.

The inclusion of sites on vacant sites registers continues to be determined by the criteria provided for in section 5 of the 2015 Act, subject to the site not exceeding 0.05 ha in area. I am satisfied that the existing minimum size threshold of 0.05 ha reflects the appropriate size of a vacant site that should be targeted with a view to maximising return from the measure, thereby enhancing its effectiveness. To give some context, 0.05 ha is about 500 sq. m or about 5% of the size of a rugby pitch, on which it would be possible to build a maximum of two to three small houses or three to four small apartments.

My Department does not maintain a central register of vacant sites, as each local authority administers the vacant site register in respect of its functional area. A recent review of the online vacant site registers across all local authority areas shows there are collectively more than 360 individual sites currently on the local registers. Over 120 of these sites were entered on the local vacant site registers on 1 January 2018 and are therefore subject to the levy in 2019, unless development works were activated in the interim.

As of 14 March 2019, sites with a value of €416 million were listed on local authority vacant site registers, of which €281 million related to sites listed on the registers prior to 1 January 2018. Without any changes to the number of sites currently listed on local authority registers, it is estimated that the levy proceeds nationally could be of the order of €8.4 million, applying the current 3% levy rate in respect of sites on the registers in 2018, increasing to €29.1 million in 2020, applying the increased 7% levy rate in respect of sites listed on local authority registers in 2019.

Levy implementation progress reports were requested from local authorities late last year and all local authorities have submitted responses. These responses are currently being examined by my Department with a view to determining what, if any, further implementation supports may be required, as well as publishing the progress reports. I can in the meantime arrange for copies of the progress reports to be made available to the Deputy if he so wishes.

Do I have two minutes this time?

You have two minutes.

The changes the Minister introduced to the vacant site levy are not adequate and have not tackled landbanking. I wonder if the Department has any interest in doing anything about it. The vacant site implementation report from Wicklow County Council shows that it looked at 158 sites. It highlighted a lack of clear understanding and interpretation of the legislation by internal staff in other local authorities and the Department. It referred to the lack of consistency in decision-making from An Bord Pleanála in regard to sections 5 and 6.

The Wicklow County Council report is very good, but the Wexford County Council one is rubbish; it only looked at four sites in the whole county. What is going on? Does it not have the staff to do it? Will the Department do anything about it? It does not make any sense. The Wicklow County Council one is comprehensive, but the Wexford County Council one is not. Perhaps it does not have the people. If it does not have the people maybe the Department would provide them to it. If the Department does not think the local authorities can do it, why not get someone else to do it? Perhaps the independent planning regulator should be brought in if the Department is not prepared to give the power or if the local authorities do not have the mind to do it.

There are 162 vacant sites in Dublin. I was the one who argued for 0.05 ha back in 2015 because the Government had it at 0.01 ha. When I look at the Dublin City Council report, I actually think I went too big. The Minister said it is only possible to put a couple of houses or apartments on 0.05 ha. I could put 12 apartments on 0.05 ha and it would be possible to put at least eight and maybe ten on 0.03 ha. It might be hard for people to get finance to build out a small site and that is very understandable. The local authority should look at buying the 162 sites and build them out itself.

Finance for small sites and particularly infill sites can be quite complicated because there can be many difficulties, as Dublin City Council found out recently when it looked at a particular site in the city centre.

I am sorry I raced through my initial answer which contained considerable detail. There are 360 sites on the local registers. More than €400 million worth of land is under levy. The new 7% rate that I brought in is now in effect, which means that over the two-year period it is a 10% levy on the value of that site. It is worth noting that 42 sites have come off the register since it was first compiled because construction has commenced, and been completed in some instances, on those sites. That shows it is successful, with 42 sites out of 360 sites actually seeing construction and having construction completed because the levy was applied to that vacant site. Many more sites would be on the register were it not for our decision to introduce the levy and to more than double it in the course of this year.

I am reviewing the reports and the Deputy is right that it is a different picture in different local authorities. That is why we will help the local authorities that need that help. I still believe the local authorities are best placed with their local knowledge to compile and maintain their registers of those sites in their own functional areas.

The levy will bring in approximately €10 million on the sites the Minister mentioned because it was 3% of approximately €300 million and it will be 7% in the following year. As he knows, my Bill proposes a levy of 25% which would really encourage them not to bank land.

Mel Reynolds has pointed out that in Dublin alone it could bring in close to €300 million in one year if all the sites are tapped into in terms of a levy. We could then talk about bringing down the price of housing. A girl telephoned me at the weekend wondering if she should buy a three bedroom house more than 30 km from here for €330,000. That is €330,000 for a three bedroom house. I can tell the Minister the cost of such a house is half that amount on mainland Europe. He will not be able to bring down the price of housing if he does not tackle land banking. His site levy is not workable. It will not make a difference. There are major concerns about the definition of what even constitutes a vacant site. I gave some examples at the committee.

Thank you, Deputy.

I thought I was supposed to have two minutes.

No. The Deputy gets one minute this time. We will hear the Minister's response.

This is not a revenue raising measure. We did not bring in the vacant site levy to bring in money. We brought it in to encourage the use of land for development. We will not measure this based on the amount of money we bring in but on the number of sites we get under construction as a result of bringing in the levy. As I said, development is taking place on 42 sites since we brought in the levy. We more than doubled it to 7% but over the two-year period that becomes 10%. That is punitive. If someone has a piece of land worth €1 million, which actually is not very much for a piece of land-----

(Interruptions).

-----the person is liable to pay €100,000 on that. We are seeing proof of that now. The levy we have put in place is moving sites from vacancy into construction but the important thing to note as well is that we are not just using the vacant site levy to get land moving. We have also got the Land Development Agency bringing forward State land to make sure we are progressing the existing massive State land banks that are not being used efficiently. We can look at the different individual measures we have under Rebuilding Ireland from the Land Development Agency all the way through to our vacancy officer teams and the vacant site levy. This is about getting land and getting it built on.

The vacant levy is doing nothing to tackle land banking.

I will be coming back to the Deputy when we move the next grouping of questions.

Questions Nos. 69 and 70 and 72 replied to with Written Answers.