The joint committee will commence proceedings in public session.
Property Rights: Presentations.
I am not aware if it is correct etiquette or not but I must point out that some of the witnesses who appear before us wear several hats in their other lives and the members of the committee may not be aware of the other hats they wear. For example, one of the witnesses yesterday is a director of An Bord Pleanála and the members were not aware of that.
We did not know that. We could have asked him a few questions.
I do not know whether members should be made aware of that or not. It can leave us at a disadvantage and even though we are covered by privilege we might say something nasty about An Bord Pleanála and not realise that the person making the presentation is a director of that body.
The members were not aware of that.
Today we are meeting a delegation from the Irish Farmers' Association which is represented by its president, Mr. John Dillon, Mr. Michael Berkery, Mr. Francis Fanning and Mr. Jim Devlin. The delegation is very welcome.
I remind visitors that members of the committee have absolute privilege but the 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, criticise or make charges against a person outside the House or an official by name in such a way to make him or her identifiable.
I invite the delegation to make its presentation and to synopsise its submission within six or eight minutes. This will be followed by a question and answer session.
Mr. John Dillon
I wish to apologise to the committee for the absence of the general secretary. I am accompanied by Mr. Francis Fanning, chairman of the industrial committee, IFA, and Mr. Jim Devlin, executive secretary of the industrial committee. I am president of the Irish Farmers' Association.
I thank the committee for its kind invitation to attend this meeting and to present the IFA submission on property rights under the Constitution. IFA recognises the context in which the committee is reviewing the property provisions of the Constitution. It shares the concerns of the Government and NESC about the economic and social pressures that arise, including spiralling development of land and house prices. However, it is important to recognise from the outset that the factors which drive the price of development land, namely zoning, provision of services by local authorities and market forces are not factors determined by farmers and are completely outside their control.
The history of zoning and development is basically one of farmers selling their land at agricultural prices, or marginally above, only to see the same land soar in value a few years later in the hands of developers and builders. I want to re-emphasise that we feel very sore when that happens. Zoning is a matter for the elected representatives of local authorities who approve all local development plans.
I am particularly concerned at the continuing over-concentration of development in the greater Dublin region. This is a major contributor to the high price of development land. We believe that if we want to have cheaper development land what is needed is more zoned land and core services, which are outside farmers' control. We welcome the National Spatial Strategy. However, there is a significant danger that it will turn out to be no more than a "paper plan" with little happening at Government policy level to achieve balanced development across the country. To address this, the Government must drive the full implementation of the National Spatial Strategy as a priority. We have included IFA's submission to Government on the National Spatial Strategy as part of our submission to the committee.
We believe that a transparent market with liquidity and low costs is the most effective way to regulate property prices based on market supply and demand. We see no role for Government intervention in the market for farmland, which should continue to enjoy the property rights set out in Article 40.3.2° of the Constitution. This article recognises the value of private property to underpin our stable society.
Property ownership is also the bedrock of our economy. The value on home ownership provides an important incentive to work and security for the borrowings of both individuals and groups. Farming in Ireland and throughout the EU is based on the right of ownership of private property. Small and medium enterprises are also predominantly privately owned businesses involving property ownership. IFA strongly holds the view that the State must continue to uphold the individuals' rights to property ownership.
Where the State is obliged to acquire farmland in the common good i.e. for roads, infrastructure, etc., it is also obliged to provide a fair system for purchasing this property. Compensation must be based on the full open market value of the property at the point where the compulsory powers are exercised. In November 2000, IFA submitted proposals to Government calling for an update of the system used by the State to acquire land for roads. IFA's objective was to get a better balance between the powers of the State with the rights of farmers directly affected by the CPO process for roads. It was also our objective to bring about greater efficiency in the CPO system.
These proposals resulted in an agreement between the Department of the Environment and Local Government, the National Roads Authority and the IFA. A copy of the IFA's proposals and the resulting agreement have been included in our submission to the committee. IFA has significant experience in reaching agreements on behalf of farmers with other national utilities, which need to construct and maintain infrastructure networks. Again, these agreements help to ensure a fair deal for farmers and greatly assist in the delivery of necessary infrastructure. We have included sample copies of these agreements with our submission for the committee's consideration.
Environmental designations, under the EU Habitat and Birds Directives as SACs, and the Wildlife Amendment Act as NHAs, have imposed farming and developmental restrictions on land. We insist that farmers and landowners are not at a loss as a result of farming and developmental restrictions that these designations have imposed. However, the agreements currently in place do not satisfactorily address this issue. This fact has been recognised in the current national partnership agreement, Sustaining Progress, and negotiations have commenced with the Minister for the Environment, Heritage and Local Government, Deputy Cullen.
Farmers have serious concerns about issues surrounding access to their property. We must remember that farmland is private property and a working environment that contains livestock, crops and machinery activity. This can present dangers to people coming on our lands. While the Occupiers Liability Act 1995 helped with a reasonably high level of protection against claims, the outcome of recent court cases threatens this assurance. Landowners continue to bear the increasing costs of cover for public liability insurance, which is a necessity for all farmers.
Other issues also arise. Some farmers experience damage to their property and massive pressure of numbers of people entering land at popular locations. It is not surprising that farmers have objected. We believe that the property rights of farmers cannot be reduced by creating indiscriminate access to farmland for the public. This would create significant property damage and security problems for farmers. Furthermore, it would not eliminate the small number of instances that occur where individual farmers are compelled to object to certain entrants onto their lands. We have included a copy of the IFA's Guide to the Occupiers' Liability Act 1995 and the Farmland Code of Conduct with our submission.
I thank members of the committee for the opportunity afforded us today and we would welcome any questions.
Thank you very much for your very enlightening submission. A number of groups that do not represent active farming interests have told us of much hoarding of land and people taking options on land, especially land around developing towns and villages on the outskirts of Dublin in counties Kildare, Meath and Wicklow. These would not primarily be farmers but builders, developers or speculators. What is the IFA view on that? Are the farmers getting any benefit from that?
Mr. Dillon
I made a point in my few words to the committee to say that we find that farmers selling land to property developers or builders in a short time become very wealthy people from that piece of land. The value of their property doubles, trebles or sometimes increases by tenfold or even more. That should not be the case. Zoning of land is a function of public representatives at local authority level. On the basis of supply and demand, if sufficient land was zoned the problem would not exist. I will give a rather jocose example which illustrates my point. A lady in a foreign country, which shall be nameless, instructed her maid to fill her bath with 120 bottles of champagne. Having taken her bath, she then instructed the maid to pull the plug and release the contents. However, the maid considered that rather wasteful and decided to refill the 120 bottles but, having done so, found there was still some liquid left over in the bath. The moral of the story is that a small surplus destroys the total quantity. On the land zoning issue, the problem is that there is no surplus. The solution lies in zoning sufficient land, rather than changing the Constitution.
I wish to refer to one or two other points. On the issue of access to the countryside, there have been some difficulties in the Beara and Sheep's Head peninsulas, where farming groups, including IFA members, together with tourism interests, are endeavouring to have special walking routes designated and signposted. What are the views of the delegation in that regard? It is my impression that IFA members in areas such as Mayo, Galway or west Cork wish to co-operate and do not wish to close off access to their land. There is need for consultation on the matter. Some of those involved are part-time farmers who may also be involved in fishing or tourism-related activities. While I accept that people cannot be allowed unrestricted access to land, would the delegation support a system of designated walking routes? I have supported the proposition that farmers should be compensated for such access, but that does not appear to be possible.
Mr. Dillon
Mr. Fanning will respond to that issue.
Mr. Francis Fanning
A change in legislation might be more effective in that regard, rather than changing the Constitution. The nature of the difficulties has been quite clear for some years past. In our submission, we referred to the increasing cost of public liability insurance. That is an area in which there is scope for change and improvement. Every individual property owner must always have the right to refuse access. People should bear in mind that a farm is a working environment in which care must be exercised. A number of walking routes have been put in place by Leader groups around the country on the basis of first securing agreement on access. The changes required to improve the situation are more a matter for legislation rather than constitutional change.
That may be a fair point. Is it the position of the delegation that if walking routes were regulated properly and if satisfactory insurance arrangements were available, farmers would have an open mind towards allowing access through their lands?
Mr. Dillon
Access for walks through land is not the primary topic for this meeting; we came to discuss the Constitution in the context of private property. However, on the issue of access, it has to be recognised that farm land is private property and access can only take place with the co-operation of the owners. Consultation must take place with the land owners before any walking routes are established.
I welcome the IFA delegation. The IFA submission stated that the zoning of land for development has created a situation whereby land sold by farmers at agricultural prices, or marginally above, soared in value a few years later in the hands of developers or builders. Irrespective of whether one agrees with that statement, it is not happening as often as previously. Farmers are becoming more informed in such matters and if land has development potential, they will hold on to it. In many cases, it is farmland which is now being rezoned on the edge of cities and larger towns.
Submissions from other groups have suggested that a clawback of up to 70% or 80% of the added value to land, as a result of rezoning, should go to local authorities for the provision of services for the common good. Is that a proposition with which the IFA would agree, whether the land being rezoned is in the hands of developers or farmers?
Mr. Dillon
Our basic position is that we do not want any State interference in relation to our land. If the State wishes to restrict the price of zoned land for property development, it should zone more land. As I pointed out earlier, the zoning of a sufficient quantity of land will keep down the price, thereby eliminating any need to claw back money from inflated prices.
In reality that is exactly what is happening. The Galway city and county development plans are currently being revised. I will take a hypothetical example of a farmer who has 30 acres of agriculturally zoned land on the outskirts of the city. If it is rezoned for residential development, there may be a tenfold increase in value - or perhaps twentyfold in the Galway situation. Previous submissions have suggested that, whether the owner of rezoned land is a developer or a farmer, subsequent disposal on the open market should be subject to a claw back of a large proportion of the gain - not the original agricultural use value - to enable the State or the local authority to recoup some of the gain in land values for the common good.
Mr. Jim Devlin
If I may comment on Deputy McCormack's point, there is a certain danger involved in this issue. We would encourage the committee not to focus solely on the micro-management of the issue. The Deputy has referred to a situation where there may be a gain as a result of rezoning. Micro-management will not deal with the overall problem, which will still persist. Local authorities have extensive powers, through the planning Acts, to recoup the cost of the provision of services. It is normal practice to levy developers or private individuals, including farmers, with charges to provide for local services.
In addressing the big issue, it is very difficult to improve on a properly functioning market in which there are low costs, liquidity and adequate supply. The big issue, as we see it and as identified by NESC, is that of increasing house prices and increasing development land prices for other purposes. As Mr. Dillon pointed out, this is a key factor in relation to the National Spatial Strategy, in terms of achieving balanced regional development across the country by accelerating development of towns and cities, other than those on the east coast, through the provision of services and features to encourage people to live and work there. We should change the crazy policies which mean that everything is on the east coast. County Galway is a special case because it has exceptionally high development prices. The prices have been driven in that direction for some time. Other cities do not experience the same level of problems.
The extension in 1986 of the boundaries of Galway means that there are large tracts of agricultural land within the borough of Galway city. Galway City Council can decide whether the land should be rezoned. There are many farms within the borough area of Galway city.
I will pick up on Deputy McCormack's point. I welcome Mr. Dillon and his colleagues to this meeting. The committee has heard a great deal of discussion in recent days about agricultural issues and farmland. It is good that Mr. Dillon is here to provide his perspective on the debate and to impart his knowledge of these matters. Can he provide some clarification in relation to an issue that has been discussed at length at this committee? It has been suggested that developers, particularly those from Dublin, are taking long-term options - for ten, 15 or 20 years - on agricultural land throughout the country. Does the IFA believe that this practice, which involves the payment of an upfront premium so that an option can be realised many years later, has become widespread? If so, what is the IFA's opinion of it?
Mr. Dillon mentioned that he believes that the market should be driven by the laws of supply and demand. There has been a great deal of discussion of this topic. Does the IFA not believe that it is legitimate for the Government to interfere in the market to increase supply?
I would like to ask Deputy McCormack's question again, in a different way. The Irish Council for Social Housing suggested yesterday that local authorities should have the first option to purchase agricultural land that has been rezoned at its current use value, plus 25%. What is Mr. Dillon's view of such a proposal? What would the IFA think if the Oireachtas were to give such a power to a local authority?
Mr. Dillon
The Deputy asked if I think people are buying land for the purposes of speculation. I do not know the answer to that question. I am not able to answer it. If it is the case that people are wealthy enough to purchase land for such purposes, I assume they are doing so because they have identified certain trends, which are based on the actions of those who rezone land. There will be no problem if enough land is zoned, as prices will drop as a consequence of the laws of supply and demand.
It is not possible that the land to which I referred, which is far outside of urban areas, will be rezoned in the next five to ten years. Can Mr. Dillon say, based on his experience as the leader of a farming organisation, whether or not long-term option agreements are a widespread practice? Are they a feature of farming life at this time?
Mr. Dillon
I cannot see any problem in this regard, as I do not understand why anybody would want to speculate along such lines. Perhaps there are people with serious money who have nothing to do with it. My colleague, Mr. Devlin, will comment on this aspect of the debate.
Mr. Devlin
I work in this area in the IFA, but I have not experienced widespread occurrences such as those that have been described. Deputy Power is probably aware that a great deal of data is available in relation to this interesting subject. The Central Statistics Office publishes a regular document on agricultural land prices, containing a reasonable amount of data and detail. I am not sure if the Chairman has had an opportunity to examine this series, but it would be worth his while to do so. The statistics are listed by region and further data is provided to back up what is published. Various sizes of parcels of disposals are looked at. The document does not indicate any particular trend that may support the Deputy's contention, such as land being sold for a price far above that in its locality for an unknown reason. The occurrence of speculative purchasing in areas that have not been rezoned is less than that which might be portrayed. Buyers and sellers have different perspectives on land prices. The IFA encounters this phenomenon in some of the areas in which it is involved, such as wayleaves and CPOs.
What is Mr. Devlin's opinion of the suggestion that local authorities should have the first option on newly rezoned land?
Mr. Devlin
My opinion of the suggestion is that it is not dealing with the central issue. One should not micro-manage certain elements of the trading chain without addressing the fundamental drivers, for example the fact that there is a certain demand for housing as a consequence of demographic and economic trends. If one cannot increase supply to meet additional demand, the benefit will be passed on to the next person up the line, such as the developer who is contracted by a local authority to build houses. Local authorities with a stock of housing of very high value may charge rents that people cannot afford to pay. One cannot simply say that this will allow us to increase the supply of affordable or social housing, as I do not think it works that way. Local authorities in other European countries and cities have a stock of high-value local authority housing at very high rents. It has not addressed the fundamental driver, which is, "Can we match the demand for housing with adequate supply?". If we do not address this core issue, we will not address the problem as a whole.
Is Mr. Devlin saying that more zoning is required?
Mr. Devlin
It is difficult to beat a properly functioning market for efficiency and fairness. The issues of zoning, supply and servicing are within the remit of the planning authorities and local authorities as things stand.
A number of groups have said to the committee in recent days that they feel there has been hoarding of land, particularly in the greater Dublin area, although not necessarily in the south or the west of the country. I get the impression that most of the people in question are not farmers, so they are outside the remit of the IFA. The IFA has no knowledge of such practices?
Mr. Devlin
We have no knowledge of it.
That is okay.
Mr. Fanning
I would like to make a specific point about housing. Developers sometimes take long-term options on lands for energy production purposes. I would like to clarify that this takes place in case somebody mentions it at a later stage. Many people are aware that developers have taken out long-term options with farmers in the hope that certain lands will be given planning permission, rather than being zoned per se, for energy production and renewable energy projects. A case in County Kerry is an example of zoning for these purposes.
Mr. Devlin
An alternative energy project, such as a wind energy production facility, is a different issue.
The main focus of the points that were made to us in this regard related to housing.
Mr. Devlin
That is true in the Dublin area, but the situation is different outside of Dublin.
I accept that.
The point made by Deputy Peter Power did not relate to selling land, but to taking an option to buy land in 20 years' time.
The IFA has said that it does not have any evidence of that.
I welcome the IFA delegation. I would like to raise an important issue. Those who have spoken to the committee up to now are predominantly involved in the housing market or are interested in seeking greater access to land. The IFA is one of the very few organisations to come before the committee to represent landowners. From that point of view, the delegation has a very important point to make to the committee which might not have been represented fully otherwise.
Our central focus must be on the constitutional aspect of this matter. In its preliminary submission, the IFA said the State must continue to uphold the individual's right to property ownership. Are the present constitutional provisions adequate? Has the opinion of counsel been sought to determine whether or not the provisions need to be reinforced from the IFA's point of view? We have heard many witnesses who have been of the opinion that the provisions should be modified to relax the unfettered right to private property.
Since the IFA reached agreement with various agencies on compulsory purchase orders, what has been the association's experience of the agreement's operation in terms of the NRA etc.? Is the association happy with the way it has operated?
The issue of access has been very much to the fore in our discussions. The ramblers and mountaineers, all of whom claim to have rights, have come before the committee. As a landowner myself, I must say that there cannot be an unfettered right to property. Regard must be had to the common good. If, as in my case, one lives by a good fishing river, the view should be taken that the waters were there long before one became a landowner. There should be access though that access must be regulated. It should only be free in the sense that people do not have to pay for it.
Regarding public liability, surely it is the case that one has to carry public liability insurance anyway. While ramblers, angling and game clubs tend to have insurance, would it make it easier to afford access if the person who wanders across fields as an individual were subject to an exclusion which made them liable for whatever happened provided the landowner had taken reasonable care? The existing Act seemed to improve matters significantly but in its submission the IFA suggests that recent court cases indicate otherwise. What is the legal basis for that statement? Can the committee be given an example of the way in which a right it thought was strongly enshrined has been eroded by the courts?
Mr. Dillon
Regarding his last comment, Senator Dardis will know about the Donegal case in which damages were awarded against a religious order as an area was not fenced. The integrity of the assurance we were given is threatened by such court cases.
That case is under appeal.
Mr. Dillon
It is. Regarding safeguards, one is never really happy as a referendum could change the Constitution and one's rights at any time. In some cases changes can be made through rules and regulations of the Oireachtas. I could not be 100% happy, but I would be happy if things stayed as they are.
Mr. Fanning spoke about compulsory purchase orders as he was involved in negotiating the agreement we made with local authorities and Government. There is a balance to be made in terms of access to private property and the common good. I live beside a river myself which I have no right personally to fish. I do not have a licence from the ESB to do so. People go to and from it and I do not stop them, but from time to time gates are left open and fences are knocked down. It upsets the environment. Ordinary farm work, such as the spreading of slurry, can cause a problem to people who are not always from the country due to smells. If regulations can be put in place for the common good that is fine, but we must recognise that private property is involved. There must be a co-operative agreement between the farmers who own the property and the people who use it, such as fishermen.
Mr. Dillon made a good point which had not occurred to me about the number of people deriving commercial gain by organising hill walking tours, etc. The people who provide the facility do not get any reward.
Mr. Dillon
To follow from that, hill walking is going on in areas where there are no sanitary facilities. Huge numbers of people are travelling through those areas leaving gates open and walking on fences. If farmers use electric fencing to do their work the way they want to do it, it causes a certain amount of problems. Those issues must be respected by everyone involved. I suggest that no one should enter a farm without the co-operation of the farmer. Of farmers, 99% will not object as long as their ownership of the property is respected.
There are to be controls on the value of property when farming, as such, is not causing the problem. The factor which has driven up the price of development land is zoning which is done by others.
We accept that. In fairness, I have said - and the Taoiseach has averted - that 99.5% of the issues we deal with do not concern farm land anyway.
Mr. Dillon
Nothing has happened since the National Spatial Strategy was put in place. It will be just another paper plan. Sites are making up to €70,000 and €80,000 as a result of the difficulty in obtaining planning permission. Issues must be dealt with by the people who have the power to do so. What is happening is not acceptable.
Mr. Fanning
To reply to Senator Dardis on compulsory purchase orders, the implementation of the agreement formed part of the partnership negotiations we were involved with. The agreement concerned the fairer and more speedy implementation of CPOs and it is delivering excellent efficiencies in that regard. There are two six month periods which must be observed by local authorities. While a farmer, naturally, does not wish to see a road built on his land in the first place, the IFA is in favour of development and accepts the agreement. Roads are being fenced off and built more efficiently as a result of the new deal.
The IFA is happy with the new agreement?
Mr. Fanning
It is performing as we expected.
I welcome the IFA. I am very interested in the delegation's comments that insufficient land is zoned. Other deputations have come before us to argue the very opposite. If there is an insufficiency of zoned land, would the IFA be in favour of all land within a radius of, perhaps, five or ten miles outside each of the major urban areas being zoned as residential/industrial? Would that solve the problem of land prices?
One of the deputations which appeared before the committee in recent days argued quite cogently that the actual value of the land should be separated from the development potential value of the land, on the basis that it is State-driven and for the common good. What is Mr. Dillon's view of that notion?
Mr. Dillon
In regard to the question about the ten-mile zone, farmers are doing their utmost to cut out as much red tape and bureaucracy as possible. I know all of the elected representatives in my local area. There is a lot more work to be done between the elected representatives and the local community. The legislators need to make the necessary changes to allow for the zoning of whatever amount of land is required for housing purposes. We must ensure that proper planning goes into such matters as the notion of a ten-mile zone has just been picked out of the air.
Maybe I did not understand Mr. Dillon correctly. I though that the gist of his argument was that there is not enough land zoned, but many of the other deputations told us that they feel there is an oversupply of zoned land. Did Mr. Dillon say that there is insufficient zoned land?
Mr. Dillon
It is simply a case of supply and demand. If the cost is too high that indicates that there is insufficient supply. The same is true in regard to cows or milk. In my view, that is obviously the case.
That may be a slightly simplistic view because there are other factors that enter into the argument, such as people holding on to land and not letting it be developed, even though it may be zoned for development.
Mr. Dillon
If land is zoned for development, as long as there is nothing influencing the price, such as political interference or some other force, then the law of supply and demand will control the price. I think it can be done in that way, although I am not sure if I understood everything the Deputy said.
On the issue of actual value, the value of the land is the market value, whether it is for development or for agricultural purposes. Farmland can make a serious amount of money at the moment but that value is not based on the income that is possible from farming that land.
Another group is waiting. We are half an hour behind time.
The Chairman will be pleased to hear that my question was already answered. I just wish to welcome the delegation.
I welcome the IFA delegation, particularly Mr. Dillon who is from my constituency. He spoke of the over-concentration of development in the greater Dublin region and the importance of the implementation of the National Spatial Strategy. I concur with him in regard to both points.
How does the proposal that more land be zoned fit with a free market approach to zoning? I accept that may be necessary in relation to places other than the greater Dublin area, but does Mr. Dillon favour continuing to zone land further out from Dublin into the neighbouring counties? My concern is mainly from the point of view of balanced regional development, but is he concerned from a farming point of view that good agricultural land is being used for building purposes while bad land may be left for one reason or another? Should land be left for farming rather than being zoned for other kinds of development?
Mr. Devlin
I might come in on Deputy O'Sullivan's point which overlaps to a certain extent with Deputy Devins' point. We have been discussing zoning and mechanisms to control prices and breaking up a price into its constituent parts and giving a percentage to the local authority, among other possible arrangements. Our central point is that zoning is effectively a tool of planning control and development control, which is, properly and correctly, one of the roles of designated bodies. There are structures in place to deal with this area. Discussion on this matter opens up a Pandora's box of how does one do that, what processes does one put in place and will it be fair as soon as one tries to determine price other than in the context of willing sellers and buyers in a reasonably free market. There are mechanisms within the zoning and development control arena that can be used by the authorities to address hoarding issues that do not involve determination of price, which is the area that should be addressed rather than trying to artificially determine the price of anything.
On the spatial strategy, we feel that a lot of this is driven by an over-concentration on development in the east coast and around the Dublin area. We support the spatial strategy's proposals for balanced development across the country. We believe that its proposals on residential development in rural areas are sound. We want to see more controlled, planned development in accordance with the spatial strategy to re-balance development across the country.
We are concerned by the loss of good agricultural land to development. Agriculture is in a period of great change driven by a number of different factors. We respect the interests of our members who are a broad church, but farming is our core business and that remains of greatest concern to us.
We are running late.
My question on access to the countryside has been more or less answered. As a farmer, if somebody comes on to my land uninvited and has an accident, I should be exonerated from all claims. If a farmer gives somebody the right to shoot or walk on his land, that farmer should also be exonerated from claims. If there is a walkway on land and a walker is attacked and killed by a pedigree bull among a herd of cows, that should not be the farmer's fault. Is a farmer to remove his stock just because people are coming on to the land? In view of the time constraints, I do not expect an answer to that.
I believe it has already been answered quite clearly.
I welcome the delegation. Why does Mr. Dillon oppose an artificially determined price for land when he supports an artificially determined price for agricultural produce?
Mr. Dillon
This is not correct at all.
I do not want to re-open that debate.
Mr. Dillon
The Deputy is not correct in contending that we support a false price for our produce. Not too long ago, a certain Minister agreed to cut the price of our products in Brussels. We received compensation through the premium system by way of direct payment for producing, from time to time, goods for less than the cost of production. We are now moving towards a regime under which we will receive an income supplement by way of a decoupled payment. We supported a payment for our product - we want to be paid for it and we never looked for direct payments or otherwise. That was proposed by politicians, not farmers. It must be made very clear that this was proposed by politicians and not by ourselves. As far as I am concerned this is not on the agenda because it was never part of it in the first place. We had to produce goods for less than the cost of production. I agree with what Deputy Breen stated.
I thank the delegation for a very interesting debate and its members made their points very succinctly. We will suspend for two minutes to allow for the entrance of the Educate Together delegation.
Sitting suspended at 11:02 a.m. and resumed at 11.04 a.m.
The next item is the presentation by Educate Together, represented by Ms Jane McCarthy and Mr. Paul Rowe, who 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. I apologise for the delay. We have already studied the written submission by Educate Together and I will allow a representative six minutes to synopsise it, after which we will have questions and answers.
Mr. Paul Rowe
I thank the committee for inviting us to address the meeting. Over the past 27 years our organisation has been pioneering a model of school governance that provides an alternative to a religiously defined school ethos. Our schools operate under a legal charter. We are a voluntary organisation and are recognised by the Department of Education and Science as a patron of schools and as a partner in primary education. Currently, we operate 28 schools, 15 of which are in the greater Dublin area. The model we offer has become very popular and in response to this demand we are now opening more schools than any other provider in the State. We are a registered charity, depend on voluntary donations and receive €38,500 per annum from the State.
Educate Together has a very wide remit in advocating educational reform and we look forward to working with the committee when it considers Article 42° of the Constitution. However, serious difficulties have arisen in the process of providing sites for new schools, particularly over the past four years, and we believe they derive from an over-zealous protection of the rights of landowners in our legislation.
Our primary education system is privately owned but publicly funded. Of the 3,200 primary schools in the State only approximately 20 are owned by the Department of Education and Science. Historically, new primary school buildings were 85% grant-aided by the State on sites provided by religious organisations and, consequently, there was little necessity for the State to consider the transfer of lands for primary schools. Until 1999, the system was formidably restrictive in respect of any organisation that did not have extensive land banks or financial resources.
In January 1999, as a result of extensive lobbying, the State offered to purchase the site for new schools and to cap the local contribution to the building costs at a reasonable level. This landmark decision created a new environment for school site purchase. Its legal ramifications are still being worked out between the Department of Education and Science and the Office of the Chief State Solicitor. Despite the declaration of the State's willingness to purchase sites, very few have actually been bought. The few that have mostly involved the transfer of sites owned by local authorities and so have been essentially State-to-State transfers. Where private individuals or corporate bodies own sites for schools, the costs involved have drastically constrained the ability of the Department of Education and Science to proceed to purchase.
In the past three years, these costs have become a major factor triggering crises of school accommodation, especially in areas of rapid housing growth. Educate Together urges the committee to consider this issue in the context of the long-term needs of our education system and in the context of the development potential of our society. Ireland still has merely 58% of its estimated population of 1800 and is, at last, experiencing buoyant population growth. In the future we will see considerable development of our urban areas and will consistently require sites for new schools.
The most glaring example in the system is in the Lucan area of south County Dublin. There is an acknowledged shortage of between 200 and 400 junior infant places in schools for this September. However, a site reservation for a new school has been maintained by the local authority for over five years. Despite the fact that a new school was created in Lucan last September, the State has been unable to fund the acquisition of this site. As a result, the school was forced to open in a local scout den, with a maximum capacity of 24 children, when it could have opened on the site and accommodated at least 80. The Department cannot fund the acquisition of this site for the coming school year.
This pattern is being repeated in almost all the areas of housing development throughout the country. Examples in the greater Dublin area are Donabate, Clonee/Ongar, Lusk, Newbridge, Wicklow town, Diswellstown, Pelletstown, Stepaside and Ballbriggan. Outside the capital area, the same issue is becoming a matter of public concern. We are especially concerned about developments in all the hubs and gateways defined in the recently published National Spatial Strategy.
The central legal issue we would like the committee to consider is that the State, through its local government planning process, took decisions that resulted in tracts of land accruing significant additional value. Now, at a later date, the State is being compelled to pay this inflated price for vital educational infrastructure. If the property owner decides to hold out for the full development value of the land, the site can remain fallow in perpetuity and the urgently required educational facility denied to the community. The State is being held to ransom in these circumstances. Stepping back a moment, what is in essence happening is that the capital building programme of the Department of Education and Science is subsidising a private landowner's housing development.
This is in stark contrast to the ability of local authorities to effect the transfer of land for roads, footpaths, parks and public open space at no cost to the State and as a condition of planning permission. However, in our discussions with the Department of Education and Science and the Department of the Environment, Heritage and Local Government, we have been told that there is insufficient statutory provision to change this situation and that any such legislation would have to pass the same arduous constitutional test that the Planning and Development Act 2000 endured in August 2000.
In our opinion, the provisions in Article 43° of the Constitution were not intended to restrict the State in this fashion. It was intended to protect a person's right to private property, not compel the State to enrich the owners of private property. We would like to ask the committee to ensure that Article 43° is not misused in this way. We would like the Constitution to empower the State to pass legislation that will allow the transfer of lands for vital infrastructure as a condition of rezoning or planning and that this transfer is either gratis or close to the original value.
Obviously, we appreciate that this issue arises in a general climate of concern over the price of development land in our urban areas and the excessive prices that the State is being forced to pay for infrastructural projects. We concur with the view that such problems are having a negative effect on our economy's competitiveness, are imposing unnecessary additional costs on citizens and are against the public interest.
We strongly oppose any attempt to diminish the State's ability to regulate the exercise of property rights in the public interest and would in general support the recommendations on page 367 of the report of the constitution review group of May 1996. However, we also feel that it is time that the Constitution recognised the special role of education as the prime development responsibility of the State and its citizens and that reference should be made to this in the text proposed in recommendation No. 4.
We are not constitutional lawyers. We have read with great interest and admiration the work of the constitutional review group and its progress reports. We simply ask that, in the course of the committee's deliberations, it ensures that nothing remains in the Constitution that could prove an impediment to urgently needed legal reforms which would enable the State to address with maximum efficiency the educational needs of coming generations.
I call Deputy O'Sullivan and Senators Dardis and Ormonde in that order.
I ask members to keep their questions brief and not repeat those of other members since we are running behind schedule.
I will stay within our remit in regard to the Constitution. I welcome the Educate Together delegation and I strongly support their arguments about the importance of being able to set aside land for educational purposes and the suggestion that there should be stipulations that profits could not be made from a certain amount of land which should be set aside for educational and other infrastructural needs without anyone being able to make a profit on the zoning of the land.
I accept that the delegation does not comprise constitutional lawyers. I take it from their submission that quite a lot of what they suggest can be achieved under the present Constitution in the context of the planning laws and stipulations in rezoning and planning permissions given to developers. Some of the delegations last week suggested that there might be a need to strengthen the Constitution with regard to the provision of lands specifically for infrastructural purposes, including education. Does the delegation feel that the balance of the common good versus the right to private propertyneeds to be strengthened within the Constitution by specifically referring to educational needs?
Is there enough in the right to education in the Constitution as well as the balance of the common good in Article 43° or is there a need to insert further safeguards into the Constitution in regard to educational needs?
I fully support the argument that something needs to change and quickly in order that new schools can be provided without the land cost being inflationary and there needs to be some way in which the provision of land for badly needed educational purposes can be enforced.
Mr. Rowe
We think that the case for education should be strengthened in the Constitution and it is not particularly in regard to the articles which the committee is currently considering. However, we are not satisfied with the protections or the obligation the Constitution should place upon the State to provide education. We are particularly concerned about the phrase in the Constitution which obliges the State to provide "for" education rather than to directly provide.
In general, we concur with the view expressed by the constitutional review group in the sense that it drew attention to the potential contradictions in the articles in regard to private property, in particular the need to have a single article dealing with this question. The original drafting of the section on private property took place in the context of the conditions at the time when there was serious concern that there could be wholesale nationalisation of private property. Society and the world have now moved on from those times. The wording of Article 43°2 should be examined in this regard.
There is a prime responsibility on the State to educate - it is the prime developmental responsibility of a modern state. When the Constitution was written, we did not have a society which recognised a fundamental responsibility to educate on a life long basis. It was a time when the State only provided resources for primary education, whereas the State now provides resources for life long learning. The central way in which the State can ensure its future prosperity is by developing its human resources through education. Therefore, the Constitution should reflect that prime responsibility.
On the particular clauses to do with private property, the review group favoured a general clause qualifying the right of private property. The clause proposed by the review group is quite a long one but we feel that the provision of education should be included in that qualification clause.
I welcome the delegation from Educate Together and commend its members for their work. I come from Newbridge and, therefore, I have first hand knowledge of what the organisation is trying to achieve there. I am also president of the local rugby club where it is trying to find temporary accommodation and I hope that will be successful.
The matter of Article 43° has already been dealt with and I do not want to go back over it. However, a considerable volume of expert legal opinion suggests that what we want can be achieved through legislation rather than a constitutional amendment. The witnesses' submission spoke of what the planning authorities could achieve. In Kildare County Council we adopted the local area plan for Newbridge only yesterday. Two large areas of land have been zoned for residential use. In this case we have specified that five acres must be found for education. Although we have not designated a particular site, if somebody decides to develop that land he will be required to bring forward a proposal that will show where the five acres will be available for education. In those circumstances development land prices will not be paid for those sites. What we cannot do, however, is to specify that the land be given to Educate Together or any other body, whatever its denomination. So it is possible to do this within the current legislation provided the local authority has the will to do so. I encourage Educate Together to keep up the pressure on local authorities.
The presentation states: "For the voluntary groups who sought to create an alternative to the monopoly of private religious education, the requirement to provide a site for a school was frequently overwhelming." Does the group accept that denominational schools face the same overwhelming problem if they do not already own land? They must also try to build new schools in rapidly developing towns such as Newbridge.
Mr. Rowe
I acknowledge the tremendous help given to us in the Newbridge area, where we intend to open a school in September. Last Thursday, the Minister for Education and Science, at the Oireachtas Joint Committee on Education and Science, was asked specifically whether sites for schools could be included as a condition of planning and rezoning. His reply was that even when he was Minister for the Environment and Local Government he had been advised that there was a legal impediment to this. Throughout the greater Dublin area and in urban areas sites are being reserved for schools. For example, Educate Together sits with other patron bodies on the joint liaison committee for the planning of new schools in the greater Dublin area, in which we consider demographics and decide, in conjunction with the local planning authorities, where sites are needed for schools. The difficulty is that these sites cannot be transferred because the owners of the sites are demanding the full development value of the sites. In the Dublin area, for example, a 3.5 acre site, which is the standard size for a 16-classroom primary school, costs the State an additional €3 million. To put this in context, the total budget for site acquisition in the current capital building programme for primary education is €500,000. There is not a single site that can possibly be acquired in the greater Dublin area.
The section of the presentation mentioned by Senator Dardis dealt with the historical situation up to 1999. Currently, all providers are affected equally. Our presentation concerns education in general; it is not us arguing a case for Educate Together. We just happen to be the leading provider of new schools in the State at present. In the past six years four denominational schools have been proposed and two opened, doubling the number of Educate Together schools. We tend to be affected disproportionately by the difficulties in acquiring land.
I welcome the delegation and acknowledge the work that Educate Together has done in the greater Dublin area, particularly in the Lucan district. Senator Dardis mentioned the concept of providing sites in the development plan. Perhaps that is how we should upgrade our legislation. Currently, an action plan is being incorporated in the rezoning and development plan, providing sites and infrastructure to deal with the demands of the area. If we decide that changing the legislation is the best thing to do, how can we introduce legislation to speed up the process of providing sites?
Mr. Rowe
The difficulty we perceive in relation to legislation is that the planning and development legislation empowers the local authority to apply various conditions on rezoning, action plans and so on, but only in areas for which it has legal responsibility. For example, it has legal responsibility for public sanitation, public services, public open spaces, footpaths and roads, but not for the provision of sites for schools. This is a difficulty because the Department of Education and Science is responsible for education. In my discussions with the Department of the Environment, Heritage and Local Government I have been told that this is not the responsibility of the local authority, so it cannot assume that responsibility in place——
Influencing the decision on the purpose for which the land will be used is a different issue from obtaining finance to build a school.
Mr. Rowe
That is correct. I am dealing with the issue of legislation. The local authorities are reserving sites for schools but they cannot influence the way in which these sites are used. This is particularly important in the context, for example, of the Adamstown development. The STZs are allowing South Dublin County Council to state that a school must be provided after 1,600 housing units are built, but there is no mechanism there to ensure the transfer of the land, so unless the Department of Education and Science is in a position to acquire that site, the school will not be provided.
A public/private partnership could solve that problem by making the developer responsible for the provision of the school.
We understand that at present the PPP element is under review. Certainly, no new projects are being undertaken. What we need is much more co-operation between local authorities and the Department of Education and Science.
As mentioned by the representatives of the IFA earlier, there seems to be a population imbalance in favour of Dublin and the east. In the area I represent I can count 20 schools that are closing. There is a real problem. Perhaps if the National Spatial Strategy was implemented and there was not such a pull towards Dublin - it is predicted that in 20 years, two thirds of the population will live within 50 miles of Dublin, so our problems are set to escalate - things could improve. There is a policy of directing development towards Dublin, to places such as Kildare and Wicklow. We need to get the balance right.
Many of our schools are located in rural areas or outside Dublin. Some of the same problems apply in these cases because of the underlying structure of the system.
I do understand about the logistics because I have seen, through my legal practice, leases from the 1880s and 1890s directing that the land be used specifically for educational purposes. If it is not used for that purpose the land would revert to the landowner. That system operated effectively for school buildings and the residences which were often built close to the school at that time. It does not make sense that we are having problems in this area more than 100 years later.
Sitting suspended at 11.30 a.m. and resumed at 11.35 a.m.
The next item on the agenda is the presentation by the Chartered Institute of Building to be made by Mr. Kevin Sheridan, whom I welcome to the committee. The presentation was scheduled to take 20 minutes but other groups have only had six minutes and we are stretched for time so I will have to cut the presentation to 12 minutes, otherwise it would be unfair to the other groups who faced the same problem. I must remind visitors that members of the committee enjoy absolute privilege. The same privilege does not apply to witnesses before the committee.
Mr. Kevin Sheridan
On behalf of the Chartered Institute of Building, I thank the committee for the opportunity to make this presentation. A colleague, Mr. Declan Gilleece, was due to attend with me but, unfortunately, he was injured in a car crash in Limerick yesterday.
We are not constitutional lawyers and our response primarily represents the thoughts of our members in the mainstream section of the construction industry as opposed to the property section, although the property section impinges on us all. The Chartered Institute of Building is a multi-disciplinary body that has existed in Ireland since 1963. We have 2,000 members, North and South, and our membership is drawn from surveying, architecture, engineering and project management disciplines.
Our response deals with the acquisition, ownership and use of property, and delays and significant cost overruns that occur. Primarily we exist in the upstream areas - at precontract and site acquisition level. We have differentiated in our approach between larger land owners and developers and smaller, private sector land owners.
We support initiatives for constitutional change for the common good. Our caveat is that it should not unduly prejudice the rights of individuals or communities and that it should recognise the right to enjoyment of amenities by all sections of the community in the context of Parts V and IX of the Planning and Development Act 2000, which deal with housing supply and strategic development zones.
We draw attention also to Part VIII of the Act that applies to local authority developments. There are flaws in this system in that local authorities may, with some consultation, although standard opportunities may vary between local authorities, take certain action in relation to their own developments without recourse to any body other than the courts. Third parties cannot appeal to agencies such as An Bord Pleanála and we suggest this should be revisited. We recognise that the consultation provision has, however, been tightened up recently.
We propose a mechanism for a fair and speedy process, particularly in site acquisition by local authorities and CPOs but we also want to ensure that there are safeguards in that mechanism. As for the right to private property, the Chartered Institute of Building differentiates between non-speculative nominal owners of property and larger corporate bodies. Whatever way the Constitution is amended or changed, we must protect the rights of individuals and we recognise the need for changes for the common good.
There is a need for equitable taxation systems such as development and betterment levies. The main costs, particularly in housing, are site costs. The site costs effectively are whatever the market can afford and major economies will be achieved by tackling them. Affordability is a major factor and betterment or development levies should be considered by the State. Local authorities should be given the opportunity to charge levies on a graduated scale over a five year period without prejudicing the rights of land owners.
We support Article 43°2 that protects an individual's property rights and the consolidation of those rights. We agree expressly that rights can be qualified and restricted by legislation. We would suggest, however, that CPO procedures need streamlining. We have already said that we support consolidation. We also support the majority decision of the review group to oppose affording constitutional protection of private property to legal persons, but we would caution against giving a blunt instrument to the state in relation to the bona fide owners of property who are not in a speculative mode.
We contend that Part VIII of the standing planning Act should be further strengthened for the reasons earlier stated by recourse to appeal to An Bord Pleanála. We fully support the need to ensure that frivolous, vexatious or other ill-considered objections should not be allowed to unnecessarily delay the implementation of major projects.
On the compulsory purchase side of things, we believe that the individual can be somewhat prejudiced in some ways by being at the behest of the local authorities, particularly when it comes to invitation to treat. I am aware of a number of individuals in the Wicklow area whose houses have effectively been frozen and who have been unable to move. The local authorities have two years in which to issue an invitation to treat. We think that this procedure should be tightened. In contrast, the larger landowners have professional advisers and are, consequently, in a better position.
On acquisition and compulsory purchase, we recognise that there are large over-runs in property acquisition costs, highlighted in major infrastructural projects. The processing of compensation claims is excessively ritualistic, confrontational and slow in resolution. This should be tightened up, particularly with regard to timescales. Procedural aspects and timeliness of the acquisitions should be accelerated and entered into at very early stages. I have already referred to hardship in the case of individuals, and there would appear to be a lack of skilled professional resources in the arbitration area. I understand there are only two State arbitrators there. It is perhaps not a constitutional issue but there might be a tightening up of resources in that area.
In built-up areas in the Dublin region, many high amenity areas are under constant attack from local authorities who are overturning their own county development plans. In recent times, high amenity areas have been under attack because of the shortage of developed land. I have in mind in particular the public parks. They are very much under attack on the south side of County Dublin.
We generally support the strategic initiatives on zoning of land. To re-state the point, properties affected by insensitive decisions should be the subject of an independent, third party appeals system. We support the spatial strategy, particularly the increase in density on the transportation corridors. General increases in density do not necessarily result in lower costs. Given the supply and demand situation, the price of land that has been significantly increased by way of increased zoning does not always reflect an economy to the purchaser. The price of development land for residential occupancy should reflect a sustainable, affordable resource for the benefit of the broader community.
The adverse effects are not as pronounced in the case of commercial and industrial sites. It is more of a problem in the residential market. Whatever system is used should provide a reasonable return on investment and should not be based on exorbitant opportunity or rezoning bonanzas. Failure to ensure an adequate supply of properly serviced land is another issue that should be addressed. One of the more serious consequences of the boom in recent times is that the price of housing, in particular for first-time buyers, is not properly controlled. It will affect the viability of the economy and contribute to a downturn. It is paradoxical that well paid young professionals and young people generally cannot afford house prices, particularly in the greater Dublin and eastern region.
The right to shelter is fundamental and should be cherished. The response to this should be standard affordable housing and accommodation that reflects the standards appropriate to the 21st century. We would caution against a stop-gap measure, and therefore a less than adequate response. One should look at the uptake by the local authorities of the Bacon recommendations and the provisions in the Planning and Development Act 2000 for the 20% allocation to affordable and social housing. Some analysis should be conducted into the extent to which this has been taken up.
On the right to shelter, the cost of housing in particular has exacerbated the problem. Since 1995 house prices have trebled, whereas building costs, by contrast, have risen by about 75%. It is plain to see where the problem is. The Simon Community estimates that about 10,000 people experience homelessness in each year. Over the past four to five years it has increased by between one third and one half. This coincides with the increase in house prices and corresponding rise in rents, which have also lead to increased homelessness. Relevant State agencies should have regard to the overall good of the entire community and not just adopt arbitrary, expedient solutions.
On infrastructural projects, a more systematic approach should be taken in planning and implementation of infrastructural development, particularly with regard to the planning process, consultation and so on. We recommend the provision of state of the art infrastructure using best practice systems. Within that we would be talking about public private partnership and partnering options. We are aware that there have been joint ventures between a number of construction companies and local authorities, which we commend.
There is a need to tighten up on the site acquisition process and to fast track large infrastructural projects; a need to drastically reduce delays through tighter procurement procedures and project control; and a need to think proactively and develop effective response strategies and quality management systems to respond expediently to eliminate costly delays to projects, many of which have been bogged down by environmental, heritage or other intractable delays.
Since 1995 house prices have trebled. As I stated, building costs, by contrast, have risen by only about 75%. In 2002 prices rose from somewhere between 13.5% and 21%, which is not sustainable. The price of new homes is influenced by the balance in the supply and demand equation, the availability of serviced land in the right areas and the excessive price of sites as a percentage of the final cost of the premises. Many sites make up in the order of 40% to 50% of the total cost. When I first got involved in the industry it was about 20%, so one can see where at least part of the problem lies.
The price of new homes is influenced by the availability of mortgages and the level of mortgage and deposit interest rates. That is a fact of life. The paradox is that as interest rates come down the market takes the balance and facilitates the rise in prices. Perhaps some mechanism, voluntary or otherwise, can be found for changing the loan system in such a way that the fixed rate might be slightly higher but over a longer period of time.
The need to pursue a consistent mechanism for controlling land price we believe is most important. There is a need to follow through on the regulations in the Planning and Development Act 2000. There is also a need to reduce stamp duty on second-hand houses and to consider a compensatory measurement mechanism such as development levies at the upstream level. We recognise that if stamp duty is reduced overnight, it may well push up housing costs. We suggest a combination of a greater level of supply in new housing and a reduction in stamp duty. Changing the emphasis on the revenue stream to the development levy should be looked at. We support the desirability of access to the countryside, subject to sensible consultation with the affected parties.
We recommend amending Part VIII of the Planning and Development Act 2000 to give openness and transparency. We also believe that access to an independent third party, such as An Bord Pleanála, will reduce litigation costs and indeed costs for local authorities. We propose that local authorities charge development levies. These should incorporate the imposition of a graduated scale over a five year period increasing progressively over that period. We recommend that procedural aspects of acquisitions need to be accelerated, as there are many delays. Delays on the part of the inquiring authority to issue invitations to treat should be shortened from two years to one year. A panel from An Bord Pleanála should, in the first instance, be the source of any appeal. We recommend implementing a more systematic approach to site acquisition and implementing of infrastructure development with regard to planning and consultation processes with all affected stakeholders, including the State stakeholders. Procurement procedures should be further examined and fine-tuned where necessary.
Mr. Sheridan got the full 20 minutes out of it. I am sorry to hear that his colleague was involved in an accident and I wish him a speedy recovery.
This is a constitutional committee looking at whether we should recommend amending the Constitution or the introduction of legislation. Does the CIOB feel that legislative change is sufficient to deal with this issue? Does the CIOB believe that the constitutional balance as it currently stands between the common good and right to private ownership is correct? Should it be skewed more towards the common good.
Mr. Sheridan
As I said at the outset, having looked at the original documents, our impression was that the committee had come to the conclusion that the Constitution needed to be amended.
No, that conclusion might take six or nine months longer.
Mr. Sheridan
My apologies. As we implied earlier, we would be reluctant to recommend changes to the Constitution if it were to prejudice individuals and the smaller property owners. The only thing we have supported in this area is the tightening up of the various parts of the Constitution into one code under the rights of property. We believe that much of this can be tackled outside the Constitution and within the current framework. Many of our recommendations apply to the current legislation and refinements of it. We are not sure whether a constitutional amendment is necessary.
The CIOB does accept that the train of your submission, which is very elaborate, coincides with that of other professional groups. They have expressed serious concerns that critical infrastructure developments are being delayed by up to two years and this is having a knock on effect on the funding that is coming from the NDP. Does the CIOB accept that argument?
Mr. Sheridan
We certainly accept that in the current situation there are significant problems in those areas which are mostly upstream and supply driven. We are not sure that these are constitutional issues and that a constitutional change would be the solution. We would be guided by people who are closer to the constitutional and legal end of things. We believe that in the current situation the existing procedures could be tightened to make significant changes. The up-front procedures are far too slow, and onerous. There have been delays in major projects on environmental and other grounds. Perhaps, if some of these issues had been addressed at an earlier stage, this might have had an impact. The longer these projects go on at that earlier stage, the higher the costs become. The cost of land has also been exacerbated by a shortage of land.
I thank the CIOB for their detailed and penetrative submission. It appears to me that the CIOB is saying that the safeguards in protecting private property, rezoning and CPO, can be upgraded by amending the Planning and Development Act 2000. Will the witness elaborate on this, particularly in the area on consultation? I understood that Part VIII of that Act was a substantial provision. How best can it be improved, as this would speed up the whole process?
Mr. Sheridan
Our understanding of the consultation process is that while it has tightened up, if a local authority decides to put social housing in a high amenity area, there is a statutory consultation period. There is no guarantee that the legitimate objections of the people in that immediate area will be taken on board. The problem is that the only recourse of the affected persons would be through judicial review. In every other situation, one has an opportunity to appeal to an independent third party. I am not suggesting this is right by any stretch to the imagination. However, there is a great danger in the current system that it will exacerbate the costs, delay the process and the local authorities may end up picking up the bill. If there was a transparent process under which an independent third party, such as An Bord Pleanála, adjudicated, then the local authority would not be adjudicating on its own submissions.
Can legislation can do that?
Mr Sheridan
Legislation can do that
I thank the CIOB for their excellent presentation. It was claimed that the increase in house prices was not sustainable. Other groups have suggested to the committee that the supply and demand of houses has reached an equilibrium, that the continued increase in house prices will not happen and there will be a levelling off in prices. Five to eight years ago, others said this would happen and it is now being said again. Does the CIOB see that occurring and how will house prices go if there is no intervention?
Mr. Sheridan
We would certainly support intervention in that area. Many economists and people in the industry have been surprised to see that the rate of levelling-off has not been as projected. We believe the current position is unsustainable primarily because of the limitations in supply and because, as I said, as mortgage rates come down, in a free market housing constructers, contractors and so on will extract the maximum price. The rate of increase may be flattening out and is not as great as before. The big issue here is that it is causing major inflationary problems. It is also causing problems for young people trying to enter the housing market. The current situation is already overstretched. We would certainly welcome anything that would push down the price of houses to an affordable level. House prices, in the Leinster region at least, are not in that bracket.
The witness is not directly involved, but he will be aware of this. It was said to us yesterday by two groups that developers and builders are taking options on agricultural land which will probably be zoned for building purposes. Those options cover up to 20 years, and it does not take a rocket scientist to know where land is likely to be zoned. In other words, a small number of people have created a great deal of wealth for themselves from building. They are now taking long-term options on land, closing it off to anyone else and interfering with the general market by so doing. Has the witness any evidence of that?
Mr. Sheridan
I have no direct personal evidence, other than that I have heard of it, as has the Deputy. Our position is that the local authorities and the State should be the primary beneficiaries of any rezoning to begin with. In doing so sensibly, they are better placed to lower the cost of housing.
I thank Mr. Sheridan for his presentation. My question is similar to that of Deputy Neville. Are Mr. Sheridan aware, through his involvement in the industry, of the market being manipulated by the slow release of housing? Mr. Sheridan mentioned supply and demand, which is very much what the auctioneers identified. That implies that, if one makes more land available, one will be able to build more houses and help solve the problem. Has Mr. Sheridan experienced a situation where land is available but the houses are not being built as fast as they could be? A certain number of houses is released each year to keep the prices at a certain level. Is Mr. Sheridan aware of that?
Mr. Sheridan
Only from anecdotal evidence. We have no personal knowledge of it. One of our proposals is to structure development levies in such a way as to provide an incentive to release that land and a significant disincentive for people to hold on to it. Extinguishing of planning permissions, as contained in the Planning and Development Act 2000, if properly enforced, would be a further mechanism to address that problem.
My question concerns Mr. Sheridan's reply to Deputy Neville's question. Mr. Sheridan said that local authorities should be the primary beneficiaries of rezoning and made many recommendations, using words such as "tightening up", "streamlining" and "cutting out delays in acquiring property". If this committee proposed to change the Constitution to allow the Legislature and the Government to give local authorities a first option on rezoned land at current use value, plus some element of a premium, thereby excluding developers, would that have a much greater effect on the supply of development land than the recommendations which Mr. Sheridan is making? I believe that all Mr. Sheridan's recommendations are worthwhile and can be catered for under existing legislation. However, I wonder what he thinks about that proposal, which might require a constitutional change.
Mr. Sheridan
On the face of it, we would certainly support the first option of the current value, plus say 25%. I am not sure that it excludes the developers or the construction industry. Doing so, the local authorities can, through joint ventures and partnering arrangements with the industry, ensure that a more equitable provision of housing in particular can be accommodated. We would certainly support that suggestion.
I wish to thank Mr. Sheridan for his very detailed submission. Unfortunately we are running well behind schedule at this stage, but that is not his fault.
Sitting suspended at 12.05 p.m. and resumed at 12.10 p.m.
The next presentation is by the Irish Uplands Forum, represented by Mr. Adrian Phillips and Mr. Joss Lynam who are both very welcome. I apologise that we are running a little late, but such things unfortunately happen. I remind our visitors that members of this committee have absolute privilege, but this same privilege does not apply to witnesses appearing before the committee. We have received an interesting submission from this group, which we have studied. I would ask that the deputation to give us a synopsis of the main points in as brief a time as possible.
Mr. Adrian Phillips
Thank you, Chairman. I am the chairperson of the Irish Uplands Forum which was formed in 1995 and consists of members from State organisations, semi-State organisations, communities, recreational groups and landowners concerned with the sustainable development of the Irish uplands. My colleague, Joss Lynam, the vice-chairperson, is well known as the father of mountaineering in Ireland. We were established with the aim of promoting sustainable development in the upland areas of Ireland through the establishment of partnerships between the main interest groups such as landowners and land users, and, in particular, the recreational groups who want access to the Irish uplands. These partnerships have focused on problems of access and on a much wider issue concerned with the promotion of sustainable development in the Irish uplands. An example of our work has been the establishment of a partnership in County Wicklow called the Wicklow Uplands Council which was modelled on the Mourne Heritage Trust in Northern Ireland. This has now been used as a model to initiate new partnerships in Sligo-Leitrim, Donegal and Connemara-Mayo. Underlying our activities is Chapter 13 of Agenda 21 - that is the agenda for the 21st century, which the Government agreed to implement after the Rio de Janeiro summit in 1992; and, in particular, Articles 43° and 43°2 of the Constitution.
Our submission is primarily focused on the Constitution and not on downstream legislation. I will hand over to my colleague, Joss Lynam, to address those points.
Mr. Joss Lynam
It is a moot point whether access should be dealt with by constitutional change or by legislation. The Irish Uplands Forum believes Article 43°2.2 allows, what might be called, derogation of property rights for the common good. The forum believes that this provision of the Constitution might be used to promote reasonable access. I would like to stress that this major problem has to be resolved either by legislation or amending the Constitution. Access has narrowed recently for various reasons. There has been a huge increase in the number of walkers, which obviously disturbs owners. There has been bad behaviour by a small proportion of walkers. Tour operators are using the land much more. A bowdlerised version of what I hear from quite a few farmers in the west is: "That man is making money out of crossing my property." The work of small farmers in the west, particularly in areas where access is wanted both by our own people and by tourists, is becoming increasingly uneconomic. They are looking for other sources of income, some of which are definitely not good for either the environment or for access. Finally, there was a recent decision in Donegal, which turned the Occupiers Liability Act 1995 on its head. A person who was injured received more than €84,000 in a situation that no one could have anticipated.
This case, I believe, is being appealed to the Supreme Court.
Mr. Lynam
That is correct.
It is still sub judice, so it would be wise not to comment too much on it.
Mr. Lynam
No, I do not want to comment. All I want to say is that it has created a considerable amount of worry - and reasonable worry - among landowners. As chairman of the Irish Sports Council's committee on waymarked ways, I should like to say that the co-operation we have received in general from landowners has been very good. I do not have to talk to the Chairman of this committee about what goes on. I know he is well informed.
I have a vested interest, unfortunately.
Mr. Lynam
I am aware of that. If we are going to act to improve access, I would refer to what was said in the submission. I do not need to repeat that. We are not just talking about walking. We are talking about many countryside activities, walking, fishing, rock climbing, all sorts of things. We consider that whatever we do should have some benefit to the landowner as well as to recreationalists. Finally, both recreationalists and landowners need to know exactly what is happening - whether or not access to a place exists. At present it is such a grey area that people dare not go anywhere. One problem is the fact that walkers and such people are not easily persuaded to join a club. Anybody can go and walk. If you have a gun club, arrangements can be made. For walkers, however, there is no way of doing anything like that. One cannot force all walkers, regardless of how short the distance, to take out insurance. If we do have constitutional change, then limited legislative action should be used for specific trails and waymarked ways. I do not see how it could be used for the open hillside. It is unsuitable for that, and I hope, unnecessary, because at present access to the open hillside is not a serious problem. If we are going the legislative route, there are plenty of places from which we can learn. I have a short study, if the committee would like to see it, from the Countryside Commission in England, which looked at what is happening in Germany and Scandinavia. It is very interesting.
We have received some evidence of that from the mountaineering groups who appeared before the committee. Legislation is being processed in Scotland currently on that.
Mr. Lynam
What is happening in England is not suitable, by any means. I do not have 25 copies of this submission, but the chairman of the access and conservation committee of the international body, who was a chairman of the British Mountaineering Council, and is currently chairman of the Physical Council for Recreation, maintains that the law that the politicians claim opens up access to four million acres of land in England and Wales, is not in fact doing that. The result is that they have ended up with an extremely limited statutory right which is going to be hemmed in, costs millions and is confined not only by mapping but by an appalling idea of a national database. The database will attempt to dot the i's and cross the t's of every step we take. The English Act sets out restrictions on any commercial activity, by mountain guides or anybody else. It is taking an enormous amount of time. More and more people are becoming dissatisfied with it. He compares it with the Scottish law which looks very good to us. Although we have stated it could be covered under the existing Constitution, we have reservations because, looking back over the years, the possibility of derogation of the fundamental right to private property in favour of the public good never seems to have been considered. What is the point of having something in the Constitution if in its present form it gets us nowhere?
The committee is dealing with a far wider issue than simply that of countryside access. We have been listening to a gentleman from the building forum, and according to him there are all sorts of areas where it may be considered necessary and important to make changes in the Constitution. If it is decided to alter the Constitution for other reasons, please ensure that the issue of wider access is not forgotten in whatever constitutional changes are made.
In your opening remarks, Mr. Lynam and Mr. Phillips, you mentioned that the solution is partnership with landowners and stated that it has worked effectively in Wicklow. In my area, the Sheep's Head way has worked to a great extent and is not closed. There are some problems with the Beara way. Waymarked routes, prepared with the co-operation and following consultation with farmers, are the way to go. If farmers do not consent, they cannot be bullied or forced into submission. Deputy Devins wishes to contribute.
Mr. Phillips
May we finish our submission? It will take perhaps two or three minutes.
We will have a question and answer session later.
Mr. Phillips
I will be brief. We suggest that Articles 43°2 and 43° should be used in a test case involving the purchase by the State of agricultural land to be used by the State or a local authority for development, the State offering the current price of that agricultural land. That is to continue Joss Lynam's point that Articles 43°2 and 43°, dealing with social justice and the common good, have never been adequately applied.
The last point is that we believe that underlying these two articles of the Constitution is the broader and, perhaps, more recent concept of sustainable development. We tentatively suggest that there should be an inclusion in the Constitution, perhaps under the initial part of Article 43°, which would read: "The State will endeavour to promote sustainable development involving the balancing of the economic, social, cultural and spiritual development of our people with the conservation and enhancement of the natural environment on which they depend". That is a preliminary suggestion. That is the end of our submission.
I thank the Irish Uplands Forum for their presentation. To cut to the quick of the problem, the dilemma that faces us is whether to amend the Constitution or to make changes by way of legislation. I get the impression the delegation is having an each-way bet by recommending a legislative route in one situation and also going to the trouble of suggesting an amendment which has been put before us in writing, for which I thank you. To get to the core issue, which side of the coin is the forum on? Is it recommending changing the Constitution or that the matter should be dealt with by legislation?
Mr. Phillips
The existing Articles are perfectly adequate but we are recommending that Article 43°2 should be tested in the courts and then, in order to strengthen Article 43°, we suggest that the concept of sustainable development should be included as a new item in the Constitution which would emphasise the public good side of the equation and make it more in balance with the ownership of private property side, which seems to have been favoured in the past to the detriment of the public good.
The forum recommends that we swing the pendulum slightly back towards the common good. I have one final comment. In the forum's suggested amendment there is mention balancing the economic, social, cultural and spiritual development of people. I should like to hear an elaboratation on why spiritual development is included?
Mr. Phillips
Spiritual does not mean religious denomination. It covers anything to do with the artistic, with language, literature, music.
Are they not covered by cultural?
Mr. Phillips
Cultural is different to spiritual. I would say that cultural is habits of behaviour, whereas spiritual has to do with fundamental values.
Thank you.
I will be brief. Will the delegation elaborate on the test case it suggested the State should take by buying property to test out Article 43°2?
Mr. Phillips
It would be appropriate for either the State or a local authority to make a compulsory purchase order on agricultural land which is needed for infrastructure and to offer the current going rate for agricultural land. If the landowner is not satisfied with that it would be useful to have that referred to the Supreme Court for adjudication as to its constitutionality.
I repeat what I said already about access to the countryside, it should be granted, provided there is no possibility of litigation against the landowner arising out of injury. On the question of the purchase of land, it is suggested that a small farmer who has struggled and slaved all his life to rear a big family on a bit of land a mile from a village should not be entitled to get a windfall from the increased value of the land. That does not make sense.
Mr. Phillips
That is a misunderstanding. I was referring to development land around major infrastructural projects and major cities, not small holdings in the west. As the Deputy said, that would be totally unjust, and I cannot see how a local authority would want a compulsory purchase order on a small plot of land on a farm in Connemara.
Thank you for that clarification.
There are two minor issues I wish to address. One has to do with the issue of the State or local authority taking land for development. I assume the forum would not allow the State or a local authority to have a windfall benefit which they sometimes have, having bought land cheaply in the past and held it and sold it on, like any other agency. The second is in regard to sustainable development. I thank the forum for coming forward with a wording. That is very helpful. Many people ask for something without specifying what the wording should be. I suspect there are many definitions of "sustainable development" and would we find ourselves with the courts deciding what "sustainable development" meant?
Mr. Phillips
There are hundreds of definitions and the worst one is the first one, the "Brundtland" definition, because it does not define anything. It is important to get in the Constitution a commitment to sustainable development which is underlying much of Government and European policy for the next 50 years or so. A definition is needed, otherwise it can be challenged indefinitely. I have tried to suggest the broadest possible definition rather than a narrow-minded one. I am trying to be helpful, but I am certainly not suggesting to the committee that it is the right one.
I assume Mr. Phillips is opposed to the windfall accruing to the State or to the local authority.
Mr. Phillips
Yes, 100%.
I thank the delegation for its submission, for answering the questions and for the wonderful work it does, even though I may be biased. When we hear the Minister for Health and Children speak of all the problems surrounding unfitness, obesity, slí na sláinte, ways being opened, the key element of the presentation is the notion of partnership and that farmers in rural Ireland would work with groups. Also there are immense benefits for tourism in areas such as west Cork and Connemara where it is almost impossible to eke out a living from a farming point of view.
Sitting suspended at 12.32 p.m. and resumed at 12.33 p.m.
Unfortunately, we are running behind schedule. I welcome the Irish Landowners' Organisation Limited which is represented by Mr. Roderic O'Connor and Mr. John P. Maxwell. I remind witnesses that members of the committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee. We have already received the organisation's submission which we have studied. As I have asked other groups, I would like the witnesses, so far as is possible, to give a synopsis of the main features of the submission within six or seven minutes to be followed by questions from members?
We thank the joint committee for the opportunity to make a further submission. The Irish Landowners' Organisation Limited is a small but growing organisation which also liaises with other organisations in Ireland who share similar concerns with farming, heritage and the rural economy. We are directly represented in Brussels by one of our members who is on the board of our parent organisation, the European Landowners' Organisation. This organisation represents both directly and indirectly up to 30 million people owning land in the EU countryside. The majority of our members are involved in agriculture but this can also involve other rural activities ranging from forestry, small business to energy production and aquaculture etc.
The ELO actively lobbies in Brussels on all proposed legislation that affects the interests of its members. It has successfully made similar proposals on the wording of Article 1 of the First Protocol to the European Convention on Human Rights and also on Article 17.1 of the recent European Charter of Fundamental Rights - December 2000 - and is currently an invited member of the working group drafting the proposed European Constitution.
Property rights are an essential component of a stable society and open market economy. They must be enforceable by law, the process of which must be fair and transparent. If those rights are perceived as being capable of being curtailed in an arbitrary and unnecessary manner then the country will not be able to attract investment from either home or abroad.
Is Mr. O'Connor reading all the submission?
Yes. It is short and I have made copies available to the joint committee.
We would prefer if Mr. O'Connor made the bullet points but we will let him ramble on.
Sorry about that.
If we allowed everybody read out submissions it would take hours.
Basically, we are all concerned at the cost of major infrastructure projects and the effect of this on economic growth. A combination of factors account for this. The high cost of land is a significant cause but the lack of integrated long-term planning ensuring that there is an adequate supply of zoned and serviced land available has been one of the reasons for this high cost. There is also the fact that rezoning is allowed to take place on unserviced land which in turn imposes a requirement for unplanned infrastructure thereby imposing another cost factor. The fact is that this rezoning can be authorised by elected councillors who are not obliged to have regard to other material considerations of an integrated planning nature. Most of the delays which result partly from the failure to meet procedural and assessment requirements stem from this piecemeal approach. Currently most of those requirements come from obligations imposed by European law and we do not believe that part of it can be cured by any changes in the Constitution. In other words, environmental law is primary. The challenge is to devise a system that can speed the process and reassure the public as to its integrity.
In our previous submission we expressed our concerns about public policy and the exigencies of the common good. The increasing trend towards public-private partnerships and private sector competition on roads, rail, air, telecoms, water, sewerage, waste disposal, gas lines and power lines and other projects is likely to give rise to a blurred area and to abuses. The private sector's motivation is profit.
There is already one case where through the Gas Act and a statutory instrument, a company has been granted the power of compulsory purchase. Will other similar enterprises be given powers of compulsory purchase? They will claim they should in the interests of fairness. It is vital that objective criteria are set for judging the necessity of such projects in the furtherance of the common good and in the public interest.
We propose that all proposals should be subject to tests as to their necessity. They might be broadly based on three basic and objective criteria: social, economic and environmental. We are not recommending that such a test should add a further complication but it should be part of the forward planning process. As nearly all infrastructure projects will require mandatory environment impact assessments that process could be run together. The first step is to establish a system that definitively proves the necessity of the project and to show that all viable alternatives have been considered. That could also be a part of the environmental impact assessment regulations.
If alternatives are proposed for consideration, it should be possible to place a stay on development permissions, and in particular rezoning, for those alternatives until the issue has been decided. That is just a suggestion. The issue should therefore be independently assessed and certified as being in the public interest. We believe this approach would save a significant amount of public money. The French use a system, very similar to what I have described, which provides for an independent judicial inquiry into the merits of such proposals. The process also involves an assessment of the economic benefits of the proposal. We believe that would also help public confidence in this area.
Our organisation is particularly concerned about the rural economy, which we believe is facing various threats. We are concerned that the viability of the rural economy should be maintained. We ask the committee to give consideration to that fact and to the practicalities of management, which maintains the landscape people believe is desirable to preserve, and which is what Europe is increasingly demanding under the environmental laws.
A depopulated landscape will soon become a totally different one. If it is not managed it will not be the landscape which was worthy of designation. It requires people to be actively engaged on the land and to be paid properly for that. In this context we wish to submit the choice of wording we propose for the Charter of Fundamental Human Rights, which is that everyone is entitled to the peaceful enjoyment of his possessions and the right to inheritance. No one may be deprived of his possessions or restricted in their use, except where deemed necessary in the public interest and subject to the conditions provided by law and subject to full and prior compensation. The principle here is not simply compensation but the loss of viability that can occur. In a rural context we would ask that this compensation take the form of allowing the person to make a substitution, and that it should not take place years after because the whole viability of a small holding could be destroyed.
There is also a problem in restrictions of use, which again goes back to the habitats directive, and keeping people on the land. If people are forced to leave the land because of restrictions and are not encouraged in some manner to remain, the habitats directive did not envisage the practicalities of how to achieve that.
There is another problem with the Planning and Development Act in regard to listed buildings in that its wording is over-zealous. For people who want to paint their houses and do simple modernisation techniques, that should be possible without going through a lengthy and complicated process.
Public access to the countryside is another area where there are difficulties. Farms can be potentially hazardous areas with working machinery, livestock and areas such as coastal paths. Landowners need to control the right of access. Access can often be achieved by negotiation, which allows both parties to appreciate that there are responsibilities which attach to all rights. We understand there is a successful partnership model in Wicklow. We believe that is probably the way forward. Unrestricted access imposes burdens of risk of damage and public liability, which is unfair to the owner. I thank the members for this opportunity to address the committee.
I thank the Irish Landowners Organisation for its contribution. It makes an important contribution to the Irish Farmers' Association. It is important that we are aware of the landowners' perspective because frequently at these meetings we get the other perspectives, which are appropriate, but it is important that we achieve a balance.
I take issue with one aspect. Mr. O'Connor made a statement about elected councillors doing the rezoning and that they should have regard to material considerations of integrated planning. I am a county councillor, as are many other members, although we will soon be asked to resign our seats, and I dispute that statement. In the preparation of plans we are first governed by the Act of 2000. We have to have regard to strategic planning guidelines, the spatial strategy, the Dublin transport initiative and so on, and we have to be guided by the officials of the council.
As to the issue of legal challenge to the procedural and assessment failures, one incident that comes to mind is the serious delay which took place with regard to the by-pass of Kildare town. I attended a public inquiry, which went on for several days, and on at least two of those days the issue of the potential effect on Potterstown fen was discussed fully. One individual from the other end of the country then intervened on behalf of the snail in Potterstown fen, and that held up matters for a very long time. That is not to say the fen is not important. It is internationally important, and the snail is important also, but it is more to do with delay in the process rather than that the fundamental process is deficient.
With regard to the French system Mr. O'Connor described, we have something similar here in terms of large infrastructural projects. The question is how far down the line we should we go with that type of assessment. The other aspect is that, as Mr. O'Connor is well aware, we have a different legal system but that would not preclude having inquiries along the lines he described. That is more a matter of observation rather than a question.
With regard to what Mr. O'Connor said about listed buildings, renovations, painting and so on, public moneys are available for works in some circumstances. Mr. Maxwell is laughing at me but there is a scheme which has been availed of by some owners of large heritage properties, and I am aware of one in particular, but in circumstances where public money is available it is reasonable to assume there should be some control over the outcome, so to speak. Is that an unfair assessment of the situation?
Yes, it is an unfair assessment in that the amount of money available is a pittance compared to what it should be. It is a question of the cost and the time delays of doing simple projects. It does not seem necessary in many cases. We need a fast-tracking system for simple projects of that sort and a much cheaper solution to the problem. It is hugely expensive and it is an onus that is only put on people who have listed properties.
Does Mr. O'Connor believe it is such an imposition that the basic fabric of the buildings is being affected?
Yes. There is no doubt about that.
I thank the Irish Landowners' Organisation members for their presentation. I gather from the presentation that they have firmly nailed their colours to the mast in stating that they do not believe there is a need for a constitutional amendment on property rights. In developing that further, I note that on the major infrastructural projects that affect the common good, they are concerned that some of those may give rise to abuses. I am a little surprised by the comments that such areas as road, rail, air, water, sewerage, waste disposal, etc. can give rise to abuses. Is Mr. O'Connor talking about abuses of the actual procedures or abuses that the infrastructural projects could give rise to?
I am not talking about the present. What I am talking about is the future when deregulation sets in, that we perceive this as a danger.
I do not quite follow what Mr. O'Connor is saying. Is he saying that the actual infrastructural project itself might give rise to abuses or that the procedure surrounding the building of it might give rise to abuses? For example, we referred to establishing the necessity for each project before invoking anything in the common good. That is the point I was trying to make.
Is Mr. O'Connor saying, for example, that in the case of a proposed road, there would be a need to prove the need for it before proceeding?
There is a monetary aspect to public private partnerships, although roads are perhaps not the best example. It is part of proper planning that the issue should be debated beforehand.
Including the need for the project?
Yes.
How would you propose to do that? Would it be through An Bord Pleanála or the judicial mechanism you recommend?
Through any independent mechanism that would adjudicate on it.
Would that not add longer delays to any major infrastructure project?
I would hope not because I believe we have a form of it at present. We probably need to integrate the system. In other words, the environmental impact assessment is a judge and other hearings can take place in the case of compulsory purchase.
I welcome the delegation. It is good to see a different perspective. The group is mainly concerned with the preservation of rural Ireland and the conservation of the landscape. The submission seems to suggest that there is too much legislation covering conservation and listed buildings. Is the group in favour of diluting the legislation in this area? Mr. O'Connor is concerned with the right to private property in balance with the common good, yet he suggests there appears to be a legislative infringement on private property rights. Is that a correct interpretation?
I do not think the present system is sufficiently integrated. At present, there can be separate hearings for compulsory purchase orders and hearings by An Bord Pleanála. We need to integrate the system to avoid delays.
How would that operate?
Would it entail a one stop shop?
It could be a one stop shop. It has happened that infrastructure obligations are imposed because of decisions.
Mr. John Maxwell
Problems will arise in the next few years following huge changes to the CAP. There is a danger of a flight from the land. It is a question of viability. Who will ensure it?
I thank the delegation for its submission and I regret I was not present for the presentation. I understand the point about infrastructure projects. For example, the profit motive arises where public private/partnerships are involved. Checks should be imposed to ensure that this does not drive such projects. It is also important to incorporate the perspective of the landowners.
In the written submission the group say the common good has not been adequately defined and submit that a phrase should be defined in such a way as to provide a test as to whether the action is necessary. Does the group consider it should be done by way of legislation and, if so, has it devised a wording?
No, but we could make further submissions on that point. Public private/partnerships also involve the public sector. It has happened that compulsory purchase powers have been granted, but the same protection is not available as there might be against the State. We need to make the system more fair.
I thank the delegation for thepresentation.
Sitting suspended at 12.55 p.m. and resumed at 2 p.m.
The next item on the agenda is a presentation by the Green Party, represented by Ms Deirdre de Búrca and Deputy Dan Boyle. They are welcome. I remind witnesses that committee members have absolute privilege but this does not apply to witnesses appearing before the committee, except for Deputy Boyle.
We have already received and studied the Green Party's submission and, perhaps, the witnesses would, in so far as it is possible, synopsise the main points in six or seven minutes. We will then have questions and answers.
Ms de Búrca and I will cover different areas of our submission and the committee may then ask us questions. I will use whatever privilege I have advisedly.
We value the opportunity of making this submission to the committee. From the many submissions the committee has heard and will hear, it should be clear that there are central issues the Oireachtas needs to tackle in terms of the continuing viability of the Constitution. The Green Party's perspective is that, at the very least, the Constitution should be tightened to ensure there are no disagreements on future interpretation of how the common good and social needs are met in the area of housing provision and how private property is treated.
Private property, as it is classically defined, is an 18th century concept. Modern Ireland needs to reflect the reality of the society in which we live and the economic realities that accompany that. We also need to recognise and tackle the specific situation in Ireland where there is a different degree of and distinction between house tenancies which differentiates Ireland from other European countries. We need to examine how, even in the existing situation, legislative measures can be taken to tackle what we believe is the much too widespread practice of profiteering in the transfer of land ownership and the development of such land for individual house units.
My colleague will now go through some of our general proposals and I will speak later about some of the immediate legislative and fiscal measures we propose on top of what we believe should be done in terms of constitutional change.
Ms Deirdre De Búrca
I will summarise the five proposals we have made in our submission. The first one contains the distinction we believe should be made within the Constitution between created and non-created forms of property. We believe the ownership of created forms of property, goods and chattels, constitutes a natural law right and should be recognised by the Constitution. However, where rights to non-created forms of property, land and other natural resources, are concerned, these should be governed by common good objectives. In providing for and regulating such rights the State should act in a manner that is proportionate and not arbitrary.
Second, the reference made to the common good in the Constitution is not sufficiently well defined to reflect the challenges to human welfare, present and future, which characterise the challenges of the times in which we live. In particular, we believe current public policy neglects the rights and interests of future generations. We propose that a new definition of the common good should be developed to include the concept of sustainability. The new definition should enshrine in the Constitution the right of current generations to meet their legitimate needs while explicitly recognising the rights of future generations to do the same.
Third, the Constitution should provide a right of access to the countryside, limited by law in the interests of protection of agriculture and other legitimate uses of lands and privacy. As with all constitutional provisions, we believe this should be general and followed by specific regulation by statute. We suggest a wording similar to that in the Swedish constitution or a wording which involves recognition on the part of the State of the right to physical access to land regulated by law in a manner and at locations compatible with protection of the environment, the carrying out of agriculture and other legitimate uses of land, privacy and other appropriate considerations.
Fourth, we note and agree with the view of the constitutional review group in its 1996 report that constitutional protection for property rights should be limited to natural persons. Since legal persons - corporations, for example - are the creation of statute, the protection of the rights and interests of legal persons is a matter for the Oireachtas alone.
Fifth, the powers of compulsory acquisition of property rights are an important element in delimiting property rights and the promotion of the common good. The Green Party wants to see the Constitution empowering the State to compulsorily acquire property rights to fulfil a broader range of social policy objectives than mere road-building or the provision of transport infrastructure. We would propose the following wording for the Constitution: "The compulsory acquisition of property rights may be provided for by law but such acquisition must be demonstrated in each case to be in the public interest, proportionate and not arbitrary."
We also believe that if equitable land taxation were introduced the use of compulsory purchase orders would not be as necessary as people would have much greater incentives to sell or develop their land.
Those are the fiscal measures we feel should accompany such change and which could be used in the present constitutional climate. They would include, as Councillor de Burca said, a site value tax for land which has been zoned for development and has remained undeveloped in the fiscal year in question. Preceding that there is also a case for a windfall tax on the increasing value of land which has been zoned, through a development plan process, from lower use value to higher use value. That would be a once-off tax. Furthermore, such a tax could have a retrospective element to take into account a rise in land values which has occurred in the past 30 years. There might be a question as to how one would apply taxes retroactively or retrospectively but many capital taxes are retrospective and retroactive. There is a difference between the value on which the tax is applied in terms of both capital gains and inheritance taxes and the original purchase price of such assets. Consideration should be given to a once-off windfall tax and a subsequent site value tax for continuing unzoned land.
As in other areas we have also suggested measures such as certificates of reasonable value to show consumers the degree of profit on each housing unit. That is worthwhile and would show at the consumer level the extent to which people are paying for property.
It is pertinent that we are making this submission on the day Focus Ireland produces its report, which refers to levels of homelessness in Ireland and to the official response to that at local and national level, which is abysmal. We have to think not only in terms of property rights but in terms of housing in general. We are talking about people with no property, which is the biggest problem we have in the country.
We are happy to make this presentation and invite questions.
Thank you for the submission and presentation. On Focus Ireland, we have heard from a group which builds social housing. The group's view is that the wealthier the country has become the group has become more marginalised to a point where it is impossible to compete in the open market for lands on which to provide affordable housing. That is a voluntary process and we have great respect for that organisation. Does Deputy Boyle see the gap widening as a result of today's report?
I have experience of working in the voluntary housing sector and to be fair to successive Governments, the grants made available to such organisations have kept pace with building costs. However, the gap is in the price of land and the ability to plan for construction costs of such housing units. That is a problem for voluntary agencies in this area. They have fallen further and further behind in the past ten years or so.
One is talking about the most marginalised people.
It is the ultimate problem in terms of the first step these groups need to take to even envisage building houses.
If one cannot get the land one cannot build the houses.
On Councillor De Búrca's presentation, I was interested in her concept of sustainability. There is quite a lot of work in academic circles on this issue and the protection of the environment for future generations. The Constitution itself is written in the present tense so it applies to everyone at any given time.
Councillor De Burca said the definition of the common good in the Constitution should be broadened to encompass a broader range of activities than compulsory purchase orders for infrastructure or roads. Has the delegation thought that through any further? The Green Party would like the Constitution broadened while others would like it narrowed down. Are there any concrete proposals as to how the Constitution should be broadened? How is that to be done, as that is the question we will have to grapple with? It would help us if there were any such proposals.
Ms De Burca
I do not have any specific proposals but we were talking about broadening the rights of the State to use compulsory purchase orders not just for infrastructural projects, which tends to be the case, and the delimiting of property rights. Our suggestion is that the Constitution should make explicit the State's right to use such powers for broader social policy objectives. This should be made more explicit rather than granting new powers.
For example, at least three groups have stated they are in favour of granting constitutional protection to local authorities to acquire property which has been rezoned at its current use value plus a small premium. Would the Green Party be in favour of such a proposal?
Yes. We recently submitted a Private Members' Bill on that subject.
From my experience as a local authority member for almost 19 years, I have never seen CPOs operating in my local authority, whether for sheltered or affordable housing. It exists in theory but it is never operated.
There is a difficulty outside of the Constitution, even for the legislative base, for a compulsory purchase order for housing, particularly social housing. The Roads Act was used for compulsory purchase orders. There is too much of a grey area, both constitutionally and legislatively, as to the common good and social purpose behind compulsory purchase orders. What we are calling for in our submission is more clarity in that area.
Some of the ground rules relating to compulsory purchase orders date back 100 years. They are based on 19th century requirements and need to be leapfrogged into the 21st century.
I thank the Green Party for its submission. Many recommendations have been made on how the Constitution could be altered. Have members considered how much of what has been recommended might be altered by legislation rather than changing the Constitution? The submission makes an important distinction between creative property and non-creative property. We had submissions from various other organisations, including the IFA. I am sure that body would argue strongly that land to them is a very creative form of wealth and that farmers use it as such. How would the Green Party members answer that?
Ms de Burca
It is true to say a great deal can be done to land in terms of its development or for agricultural purposes. It appears to us that land in itself is not created by anyone. It is something people have come into possession of by virtue of inheritance or whatever but it is not actually created. Certainly, it can be enhanced in certain respects by the individual who owns it. However, an important fundamental distinction is that goods and chattels can be produced and created by individuals but land and other natural resources such as water, air, minerals and so on are not created by individuals.
I accept the point made by Ms de Burca and I concur with the sentiments in relation to water, air and so on. In regard to land specifically, most farmers would say that they engage the land in a very creative form of activity. Therefore, they might not accept the Green Party submission that the arbitrary division of certain rights as being creative and land being included as non-creative is not a true reflection of the situation.
Ms de Burca
The Green Party holds the position that farmers do not fundamentally create the resource in itself. The resource is the land. They can enhance that, which they do by means of their activities. They make it more productive and so on but, fundamentally, the resource is not created by humans, therefore, that distinction is important.
In reply to Deputy Devins, this committee will eventually have to deal with the question of whether the Constitution in its present form is open to interpretation which will allow, through legislative means, a lot of this activity to take place. The Green Party is of the opinion that it could be open to that interpretation but there is a need for certainty. We would be more disposed towards the Constitution being worded in such a way that this ambiguity would not exist, and that it should be strengthened in terms of how the common good is defined and how social progress can be made through the legislative process.
I was going to ask how much can be done through legislation without changing the Constitution. A number of organisations agree that the right to shelter should be included in the Constitution. I wanted to ask about proposals relating to controlling the price of development land and ensuring the availability of land for development. Could members expand on their proposals regarding land tax? They are suggesting it should be included in the Constitution that the State may promote the common good by imposing taxes on the use of land and other natural resources. They describe both a windfall tax and an annual development site tax. I presume this would be to encourage holders of land to release it for housing. Is that the extent to which members would like to see land tax going or should it go further?
In terms of the application of taxes on property, in European terms Ireland rates very low on the scale of how such taxes are applied. The political reality is that we cannot go back to the old fashioned rates system, both in terms of domestic property and agricultural land. However, there is an application for a property-based tax or site value tax on this specific type of land, land that has been zoned for a particular use, and use has not been made of it. We believe the ultimate encouragement to allow that development is a fiscal measure. Others have suggested the withering clause in terms of development plans. We are sceptical about that. We do not think it will work in the short-term or long-term. Experience shows that creative fiscal measures achieve the right policy approach if directed at the people who are using their assets in what we would define as a non-productive way.
Given that the Green Party is in favour of the right of access to the countryside, does it mean people should be allowed access through land in pursuit of fur or feather?
Hardly from our perspective. We understand there are difficulties in terms of properly defining the right of access. If the restrictions that currently apply in relation to insurance and so on are removed, I believe there would be genuine goodwill in many rural communities towards allowing access to land. It is a matter of getting the balance right between what is seen as a constitutional right to access to certain areas and having legislative controls in place which would allow this to happen. It would also give proper protection to landowners.
I thought part of the Green Party policy was that fur or feather should not be pursued in the countryside.
I thought the Deputy was saying the opposite.
No. I am asking if the Green Party is in favour of huntsmen having access to the countryside in the pursuit of fur or feather?
Our definition of access would be people perambulating under their own motor speed.
I share the view that there is goodwill in the countryside to allow people have access provided there is a level of protection for landowners. This is the issue rather than access itself.
The Green Party has made several proposals regarding amendments to the Constitution. The more questions that are asked of the electorate in a referendum, the more likely it is that the matter will not be carried. How does the Green Party propose getting the proposition that the State may promote the common good by imposing taxes on the use of land and other national resources carried in a referendum?
We are making several proposals and, obviously, we would prioritise how these questions would be put to the people in a referendum. It is clear that we would place a proposal for inclusion of a constitutional provision on the right to shelter before anything else. We would be confident that the electorate would accept such a provision. It is then a question of prioritising the remaining proposals. We realise it is a process and it will not happen at once. We are also in favour of a more active participative democracy where people vote on a regular basis. Over a set period of three to four years, there is no reason, on an annual basis, the suggestions for constitutional proposals could not come before the people and they could be prioritised in a way that the Oireachtas sees fit.
Is it the Deputy's view that the need to include the provision with regard to the imposition of taxes arises from the striking down of rates on land as being unconstitutional?
No. To be fair, that proposal is in the particular grey area that the committee is examining. It could very well be that such a proposal could be implemented legislatively without compromising the existing constitutional provisions but it is the type of area on which the Green Party thinks the Constitution should be clear and unambiguous. It is quite possible that there could be both the legislative and constitutional approach on a issue such as that.
Ms de Burca
I believe the public is becoming more aware of the injustice of the enormous windfall profits that are made when land is rezoned. Any constitutional referendum with regard to the introduction of the right to impose taxes on land would have to be preceded by a public awareness campaign. If people knew how those taxes were going to be used, I believe they would be very ready. Part of our proposal is that the annual site value taxes would be channelled through to local authorities who in turn would make those available to housing associations, trusts and so on, to provide a guaranteed supply of social and affordable housing which is the nub of the housing crisis.
There is a reasonable amount of agreement about the need to curtail the excesses of development. The submission refers to the imposition of taxes and this will cause the people of very little property who may live in an isolated area in the west of Ireland and never find themselves the subject of development, to become very frightened.
The committee has heard evidence from a number of groups that there is hoarding of land, particularly in the greater Dublin area by perhaps 15 to 20 developers, property owners or speculators who either hold on to the land for a number of years or else drip-feed it into the market. Has the Green Party any factual evidence of this? Does the party regard it as a major problem in the Dublin, Kildare, Meath and Wicklow areas?
Only to the extent that it seems to be revealed elsewhere in investigations into this issue. It is clear that there is a slowness in land becoming available in the greater Dublin area and questions have been asked as to the beneficial ownership of most of those plots of land. The Green Party's proposal is that the withering clause for development plans as proposed in the Planning and Development Act 2000, has not seemed to have any beneficial effect yet, even though the Act is three years old. The Green Party believes that a fiscal approach is required. If people own land that has been zoned for development and the land has not been developed, proper fiscal measures such as a site value tax should be implemented to encourage them to develop the land as soon as possible. If such a measure were introduced, the party is confident that it would have the required result.
On a light-hearted note, is it the Green Party's proposal that this committee would become full-time and that there would be regular referenda on the Constitution?
We believe the Constitution is a living document, so why not?
Sitting suspended at 2.34 p.m. and resumed at2.35 p.m.
The next item on the agenda is the presentation by the IHBA and the Construction Industry Federation, represented by Mr. Noel O'Connor, Mr. Jim Wood, Mr. Ciaran Ryan, Mr. Matt Gallagher and Mr. Liam Kelleher. I welcome the delegation.
I remind visitors that members of the committee have absolute privilege but the same privilege does not apply to witnesses appearing before the committee. The committee has received a detailed submission from the delegation and I ask that the speakers summarise the main features of the submission and the members of the committee may then ask questions. Speakers will be allowed between six and eight minutes.
I am chairman of the Irish Home Builders' Association. I am accompanied by Mr. Liam Kelleher, director general of the CIF; Mr. Ciaran Ryan who helped prepare the submission; Mr. Jim Woods, a member of the national committee and Mr. Noel O'Connor, an official of the IHBA. I propose to deal with some specific issues and Liam Kelleher will deal with some broader issues touching on the involvement of CIF. We will be delighted to answer any questions from members. If I am unable to answer any technical questions, I will refer to Ciaran Ryan or one of the other members of the delegation, with the committee's permission.
It is a team effort. We allow various members to field the ball.
We welcome the opportunity to appear before the committee. We are aware that the committee is attempting to deal with what has become a very topical issue in recent years, namely, house and land prices and the lack of infrastructure. I do not propose to go through our submission in detail but I will concentrate on some of the items which we regard as extremely important.
The business of development land starts at the zoning phase. While in recent years there appears to have been a relatively reasonable amount of land zoned for housing and other development purposes - and I will confine my remarks to housing - there has been a serious slow delivery of services to that land, to such an extent that land which was zoned possibly two development plans ago, today still does not have the services which would enable it to be built upon. It is missing one or other of the essential ingredients. We believe the zoning horizon, instead of being the short-term horizon of approximately five years, should be pushed out to maybe ten, 15 or even 20 years. This would enable local authorities, builders and anyone involved, to plan in a more coherent fashion the development of towns and cities. It would also facilitate the provision of schools, shops and public transport, which are often missing. This would also enable priorities to be identified at a very early stage instead of being brought in as an afterthought at a later stage.
Local authorities do not have sufficient time in a five year timeframe to plan for the infrastructure, never mind provide it and find the resources to pay for it. All of these things are restricting the supply of land, which is available for development and specifically housing development. This is leading to competition among builders and is driving up the cost of land, particularly at a time of unprecedented demand for houses of all types, shapes and sizes. There has been an unprecedented boom in the economy. The construction industry has increased its output in the past ten years from approximately 20,000 units to 57,000 units last year. We are not responsible for every single unit, but are responsible for the vast majority of them.
We feel we have done our bit in that respect. It takes a long time to increase production like that. If the demand for extra houses this year suddenly increases, within small limits it is possible to increase production, but there are not sufficient tradesmen to cope with the level of demand we have seen. There are a number of bottlenecks within the system. Nevertheless we feel we have done a pretty good job in increasing the supply.
Some people have said that if the price of land is reduced or capped in some way, this will thereby cap house prices. I do not believe that. It is not as simple as that. We believe the only way to keep the price down within reasonable bounds or stop rapid increase, is for the supply to keep pace with the demand. If there is a good supply of land there will be a reasonable supply of houses. Therefore, there will be competition among builders, which will keep every builder looking over his shoulder at what the fellow in the next field is doing and it will keep the prices within bounds. If, on the other hand, it is decided that a cap on the price of land is the answer, I do not see what that will do to cap the price of houses. The market will decide the price of houses at any particular time. I am not a constitutional expert and so I cannot go into the ins and outs of what the various articles concerned do to this argument.
Apart from the supply of land a number of other issues need to be addressed. I am referring to the whole planning and development process, starting off with local authorities and moving on to An Bord Pleanála and all the other bits in between. The process has become far too complex and long drawn out. In this day and age, it is ironic that there are fierce battles in local authorities to rezone land for housing. It takes years to service it and when it eventually is serviced, two, three or four planning applications can be made over a two or three year period, which are all refused. In other words a developer can build nothing on land that has already been zoned.
The battle has already been fought over zoning the land and it has been decided that it is to be for housing. Yet a developer can go through the whole planning process and end up with nothing even though he may have complied with all the guidelines laid down in terms of density and everything else. The system has become a monster, which is making it all the more uncertain. I would go so far as to say that if we had the high interest rates today that we had a number of years ago in this industry and the country generally, builders would be going bust all over the place because their banks would not wear the length of time it is taking to get through the system.
I believe Mr. Kelleher might have a few words to say.
Chairman, before you open up to questioning, I would like to make a couple of brief points on behalf of the Construction Industry Federation. I thank you, Chairman, for the invitation to make a submission to your committee and to meet its members. The federation is the membership organisation for firms in the wider construction industry. We have approximately 3,000 members covering general contracting, house building, civil engineering, mechanical and electrical contracting and a range of specialist contractors. We also have a network of branches around the country, with which a number of members will be familiar.
The federation submission followed the sequence of eight points outlined in the advertisement in April or May. As members have a copy of the submission, I will not repeat its contents but will summarise the key points. For us, supply is the key to stabilising and moderating house prices and to increasing affordability over time. Price rises since the mid-1990s have been driven by the strength of demand, the components of which have been the extraordinary growth of the Irish economy, the drop in interest rates, social and demographic change and inward migration.
In the early 1990s slightly more than 20,000 houses and apartments were being built annually. By the mid-1990s the highest existing forecast for housing demand into the future was one from the Economic and Social Research Institute forecasting a demand of 25,000 units per annum. Successive economic forecasts since then have raised the estimate of demand. For eight years in a row, house building in Ireland has exceeded the highest estimates of housing demand made a year or two years previously. This continued to be the case in 2002 when more than 57,000 units were produced with the highest forecast prior to 2002 being for 51,000 units. It is an extraordinary rate of supply.
I know the committee has discussed various points over the past ten days back and forth. However, it needs to be put in context when looking at land, land prices and questions of the hoarding of land, which have been raised at the committee. Ireland is currently building at the rate of 15 housing units per 1,000 of population. This is five times the rate in Germany, six times the rate in the UK and three times the average rate for the European Union. The reason for the huge housing supply and demand rests in the fact that in the mid-1990s Ireland's housing stock was about one third less per 100,000 of population than the European average. We are rapidly moving towards European housing norms, but a deficit still remains.
On the question of price, the supply of second-hand housing is by definition fixed. When demand increases the immediate impact is for second-hand house prices to rise. It is worth noting that right up to last year, and currently, the number of purchases and sale transactions in second hand houses each year exceeds that by about 50% for new housing. Both in numbers of transactions and by value, the biggest market segment in any one year is the second hand housing market and not the new housing market. I would argue that while new house prices also rise, the effect of increasing supply moderates the upward drive in price. Without the rapid supply increase in new housing since the mid-1990s, house prices would have risen more rapidly than they did. With a current annual building rate close to 60,000 units and, perhaps, 60,000 units this year, clearly the supply is exceeding the long-term or even the medium-term demand.
Last week, the ERSI published its medium term outlook for the Irish economy and forecast housing demand to 2016. The estimated demand for the years 2001-06 is 49,000 units. So for the years 2000, 2001 and 2002 we are ahead of the average demand for the years from 2001-06. From 2006-11, its estimate is 42,000 units and from 2011-16, its estimate is 32,000 units. My core point is that the industry has the capacity and is currently delivering housing at a very high level. There is no holding back, beyond proper and prudent management of individual businesses. The key to stability and moderation in house prices is, as Mr. Gallagher said, in increasing the supply of zoned and serviced land, bringing forward essential infrastructure and operating an efficient and effective planning system. Joint ventures, as referred to in the IHBA submission and in "Sustaining Progress", represent a very significant way of increasing the supply of affordable housing in an efficient and effective manner. Adherence by local authorities to residential density guidelines would also facilitate increased supply. Despite the guidelines issued in 1999, there is a tendency for development plans to include zoning densities below the levels outlined in those guidelines.
The tax take from the new housing sector is variously estimated at between one third and 40% of the selling price, including the elements of capital gains tax on land, stamp duty at 9% in some cases, VAT at 13.5%, development levies, PRSI, PAYE on workers and corporation tax on companies. The price of land, in our view, is derived from the use to which it is put. Different views have been expressed on that theme by other contributors to these hearings. The price is what remains after calculations by a house builder or commercial property developer in relation to the estimated selling price of the premises on the developed site, the cost of labour, materials, overheads and profit, the holding cost of the land and taxes.
It will be evident from those remarks that we query the need for constitutional change or its appropriateness to address the issue of matching supply with demand over the short, medium and longer term.
In the current remit of this committee, as initiated from the Taoiseach's office, we were mainly asked to consider whether the balance in the Constitution was correct and fair. On the one hand, there are provisions concerning the right to private property in Article 40°, subject to restrictions in Article 43° with regard to exigencies of the common good and the principles of social justice. Does the delegation regard that balance as being correct, having regard to the huge number of people who cannot afford houses and the increase in the number of homeless people? A statistic which I found startling was that approximately 30% of apartments built in Dublin last year were bought by speculators rather than home buyers. Is the balance right, in that context? The message which public representatives are getting very clearly from Joe Citizen is that the balance is not correct, the system is not working properly and some action must be taken.
That is a fairly complex question. I will try to deal with elements of it as best I can. Last year, we produced 57,000 units, all of which were purchased by members of the public. Perhaps the question we are being asked is: "Are houses affordable to the great majority of people?" In our view, and from anecdotal evidence from our members around the country, affordability is not a problem in most cases. It has become a problem, to some extent, in areas of Dublin where prices have advanced fairly rapidly. However, I do not believe the problem is as serious in one respect as commentators are making out.
For instance, two people on an income of €25,000 each can afford a mortgage of around €200,000, costing them approximately €7,000 per year, which is not a huge percentage of their disposable income. It is certainly well within the 35% level which is mentioned in Part V as being the definition of affordability. Those figures represent fairly modest incomes. Part of the problem is in relation to the supply of affordable housing under Part V, which has not come on stream fully as yet. Developers and local authorities are slowly but surely getting to grips with it. The first Act of 2000 was found not to be working properly and required amendment, which took place in 2002. This has widened the manner in which Part V can be implemented. It does not have to be all on site any more - it can involve a mixture of joint ventures with local authorities. There is a range of ways in which it can be implemented.
None of us has any experience of operating this system, which is new to all of us, including builders, developers and local authorities. Consequently, we are feeling our way and that is probably slowing up matters somewhat. Once we get to grips with all of those issues, I believe there will be a goodly supply of houses at very affordable prices, particularly in the Dublin area. Already, there are one or two schemes in operation - I will ask my colleague, Ciaran Ryan to speak about this shortly - where there are very successful partnerships between builders, developers and local authorities in and around the Dublin area to bring on schemes at very affordable prices. More of this will be required. This is new territory for all of us.
Builders are not in favour of high house prices, per se, as that would result in our running out of customers and going out of business. We want a steady market, just like everybody else. We are looking around for ways to bring that into effect. We know the Government is looking at it. The Taoiseach recently proposed, under Sustaining Progress, that 10,000 affordable houses be built. We welcome that and have said, publicly and privately, that we will do all in our power to bring it to fruition. It suits if people can get onto the housing ladder and keep advancing forward. Perhaps I have lost the thrust of the Chairman's question.
If I can put it another way, the irony is that despite all that delivery of new houses, there is still a growing number of people on the housing list in every local authority area. I understand that some 45% of those are people who are eager to buy houses and would probably have been in a position to do so in the circumstances of ten or 15 years ago. Now, however, with current problems of rising prices of houses or land, or a combination of both, the mix is not right. I am not attributing blame for that to the building industry.
There is a certain wedge of society which, for one reason or another, will not be able to buy houses and for which provision will have to be made. Above that level, there is a sector which, perhaps with a struggle, could get on to the housing ladder but, because there was a fairly good supply of local authority housing, they found it easier to avail of that, at least for a transition period of a few years. However, as the delivery of local authority housing has not increased in line with other building, that wedge of people found themselves with nowhere to go, except on to the housing lists, because the new prices had gone beyond them and local authority houses were not available. A degree of imbalance has developed, but the Part V proposals will deal with this issue. They will probably make available a large number of houses for people who would never previously have contemplated buying. Houses will be made available to such people.
I do not want to hold up the committee by allowing members to ask questions that have already been asked.
I thank the delegation for its presentation. It started its submission by saying that a reasonable amount of land has been rezoned and that the difficulties in the market relate to the supply of houses and rezoned land. The committee has received two stark presentations outlining the determining factors on the price of housing. Certain people argue strongly that the price of land must be controlled. Most people say that landowners should be paid the market value prior to rezoning, plus 25%. On the other hand, the construction industry and the auctioneers say that the price of land is not a factor in the final price of housing. House prices have been escalating despite the fact that, according to the delegation, the industry exceeded demand each year for eight years in a row. It seems to me that the entire debate is somewhat contradictory. If the industry is exceeding demand and a reasonable amount of land has been zoned, why do prices continue to increase?
The second question I would like to ask relates to presentations that were made by two delegations at yesterday's meeting of this committee. It was claimed that developers and builders are anticipating rezoning, perhaps over a 20-year period, and taking options on land that, it can reasonably be predicted, will be rezoned over the next ten to 15 years. One does not need to use rocket science to identify the lands in question. Options are now being taken to purchase land that will be rezoned. Such an approach will surely cause restrictions. It smacks of a closed shop. Those who are now involved in developing and are making reasonably good profits are using their money to continue their activities indefinitely. It must be difficult for others to get in on the act. I would like Mr. Gallagher to comment on those two issues.
I will deal with the second issue first. I am quite sure that people are buying options on land, but we should consider what the option gives them. Such people are certainly not paying for the land, as I do not know of a farmer in this country who would sell his land so far in advance without having a clue what its value will be. They are paying for the possibility of dealing with a landowner should it happen that his land is rezoned. There is nothing inherently wrong with such a practice, which does not decide the ultimate price of the land. The market decides the price of the land. One can be sure that the landowner will receive the best possible advice from his auctioneer or other advisers when the actual transaction takes place - when the option is being converted into a contract for sale. The landowner will look for the highest possible price from the builder for that land. The builder is trying to ensure that he has a supply of land going forward and there is nothing wrong with that. It is like a grocer buying in bags of tea in advance to ensure he has something to sell when the time comes.
People are confused about the business of options. The allegations of hoarding that are being made are nothing more than allegations because nobody has produced any figures in that regard. The Irish Home Builders' Association has asked to see the figures. We have spoken to people who we thought might have knowledge of this matter, such as local authorities in the Dublin area, but they have said they are not aware of land being hoarded. People are aware of options, which is a common practice that has been going on in the construction industry for 30 or 40 years. It may suit some people to say that it is responsible for something, but an option does not dictate the price of the land.
My other question relates to the market and the questions of supply and demand.
The ESRI's predictions were quoted.
Perhaps I can come in briefly at this stage. I was making the point that supply has increased in every one of the last eight years. I did not claim that it exceeded demand, which remained extraordinarily strong, particularly in the second half of the 1990s. There has been a supply response and supply has increased in each successive year. I also quoted the ESRI figures going into the future.
The CIF was ahead of the ESRI prediction, but that was not enough.
The predictions proved to be too cautious and conservative for the demand that transpired as a consequence of the extraordinary economic growth and various other factors.
I will ask Mr. Ciaran Ryan to make a further clarification about the issue of supply to help Deputy Neville.
Mr. Ciaran Ryan
While the industry increased its output up to a level of 53,000 private houses last year and a total of almost 58,000, one has to concede that the figure of 10,000 private houses per annum in the greater Dublin area has been exceeded just once - 1999 - in recent years. Supply was below 10,000 units in all other years, with the exception of last year, when supply in the greater Dublin area increased by 40%. Many different measures have been taken in recent years to increase the supply of new houses. Plenty of land has been zoned, but it has not been serviced.
The Government introduced the serviced land initiative - SLI - a few years ago. The initiative anticipated that 16,000 new housing units would be serviced on the northern fringe of Dublin - the area covered by Dublin City Council and Fingal County Council. Peter Bacon's housing report, which analysed the benefits of the SLI, stated that not one additional site had come on the market in that area two years after its introduction. It takes a long time to deliver infrastructure, which is now coming through. One can now see that fairly large developments are coming on stream in various parts of Dublin. The IHBA anticipates that supply will match demand in Dublin in the next few years. In a report commissioned by Dublin Institute of Technology Bolton Street last year, the Society of Chartered Surveyors suggested that 25,000 houses are required in Dublin if supply is to catch up with demand. This shows that while output is increasing every year, problems remain in Dublin.
As a former member of the Government's housing forum, as someone who sits on five strategic policy committees on different local authorities in Dublin, as a former director of housing in the CIF and having worked in local government for 20 years, I am disappointed that local authorities in some parts of Dublin are not zoning sufficient quantities of land. One local authority's draft development plan contains a "health warning" that states that insufficient lands have been zoned in its area to meet the housing demand there. The construction industry wants to deliver. I was one of the judges of a major joint venture pursued by Fingal County Council, which has delivered 750 affordable homes in partnership between the council and the private sector. A similar scheme will produce more than 500 homes in Dublin city. Another scheme being pursued by South Dublin County Council has produced more than 400 houses.
Many buyers are not aware of the assistance that exists because it is not being marketed to them. It is strange that more than 50% of the approvals given under the shared ownership scheme in the first quarter of this year related to the Dublin city area. The same was true in 2001 and 2002. More than one third of the houses sold under the affordable housing scheme, which should not be confused with Part V, are in the Dublin city area, where one would expect prices to be highest. This shows that the schemes can work, but I am convinced that most people are not aware of them. This belief was confirmed by a recent media report which stated that not many people are coming forward to avail of affordable housing under Part V. I am involved, in a private capacity, in negotiating with local authorities on social and affordable housing schemes. It strikes me as very odd that these people are not coming forward. The marketing is not in place to make them aware of the benefits.
In a nutshell, Mr. Ryan is placing an onus on the local authority to zone, market and operate the system?
Mr. Ryan
It is obvious that the local authority zoned the land.
It must also service it.
Mr. Ryan
Zoning is an essential part of the market. There is no reason servicing cannot take place, as we have suggested, on a joint venture basis. Already, the level of money paid through development levies is very significant, having risen from a figure of under £20 million in 1995 to in excess of €150 to €200 million last year. I stand to be corrected if I am wrong. One of the ways forward is to open joint ventures, one of which I have been involved in myself, to zone and service lands. If the local authority does not have access to the necessary money, it is possible private investment could meet the financial requirement.
I want to develop on the last point. The delegation made reference to the health warning from the Dún Laoghaire-Rathdown county manager whose remarks on the failure by local authority members to zone enough lands were included in the association's written submission. It is the universal experience of local authority members that where they take the liberal view or wish to zone what they regard as adequate amounts of land, the health warning is made in the opposite direction. Caps on population figures and infrastructural deficits are indicated and the advice is that land should not be zoned. Certainly in Kildare, where I am a local authority member, that is the common experience. The IFA advocated a liberal approach to the zoning of large amounts of land and made the same supply side argument the Irish Home Builders Association is making now, though to a more extreme degree. If all land is zoned, one reaches a point at which there is no infrastructure whatsoever. As that is undesirable, there must be a marrying of requirements. If a liberal approach is adopted and large amounts of land are zoned to attend to the supply side, how do we stop the pull to Dublin? Surely, that is exacerbated even more. How is regional balance achieved in the context of the spatial strategy in such a scenario? I cannot marry these things.
Development levies have been referred to. What evidence is there that the levies are being collected, but not being spent by local authorities?
It has been suggested by several groups that have come before the committee that local authorities should buy the land at current use value before inviting builders to build on it. In other words, a control on the price of land would be introduced by buying land at current use value, with a premium of 25%, after which builders should be invited to tender to build. What is the reaction of the builders to that approach?
It was stated that the tax take was between 33.3% and 40%. If the site value, development levies and construction costs are added, I cannot understand how builders are making money.
Mr. Ryan
I can understand the Senator's concerns about trying to achieve balance in terms of the spatial strategy. There has been a great deal of thought and reporting on the question of how to avoid the pull to Dublin. The zoning in Dún Laoghaire to which I have referred reflects fully the strategic planning guidelines for the greater Dublin area. However, local authority members have zoned an amount of land far short of that necessary to meet the projected needs. We have never had a series of reports on the housing market such as that of the past few years and we have never seen such a concentration of reports on planning. If insufficient land is zoned, we must ask what all that comes to. This will not create any imbalance. The modern planning involved in action area plans - the most recent example of which in Dún Laoghaire-Rathdown is at Stepaside - makes provision for all community facilities, transport infrastructure, open spaces, schools, churches, neighbourhood shopping centres and health board facilities. We do not for one minute advocate that all of these should not be an essential part of the planning system. In fact, many builders will pay for such facilities, not only as part of their development levies, but also over and above those levies.
I cannot tell the committee why some local authorities do not collect development levies. Having worked in a planning authority, I am familiar with the condition most authorities include in planning permission which ensures that a certain amount of money will be paid before development commences towards the services provided by the local authority which have facilitated it. Very often a local authority agrees to receive those moneys as the development is taking place, but it holds the ultimate trump card as the house purchaser's solicitor will require a letter from the local authority to confirm that the builder has complied with all the conditions of the planning permission. If the builder has not paid the development levy, the letter should not issue. I can only think that a local authority may include in some accounting procedure development contributions or levies included in planning permissions granted to developments which do not go ahead. The authorities may be assuming that such moneys will be paid. There may be double accounting due to change of use applications, but there is no reason money should not be collected as it is a condition of the planning permission. It would be difficult to sell houses without the letter of compliance.
Is there any evidence that moneys were collected, but not used?
Mr. Ryan
I know of very few cases where money was collected and not used and I know of cases where the applicant, by law, was entitled to and received a refund of that money plus interest. The local authority is required, by law, to lodge such money in a separate capital account which means the money can be returned if it has not been expended for the purpose for which it was collected within seven years of the granting of planning permission.
Does the delegation have any comment to make on the proposal that local authorities should purchase land at current use value, plus 25%?
I am aware of at least two schemes involving such a practice, one of which is at Castlecurragh. I have personal difficulty with the proposal. While the idea is to keep the price of new houses down, if the general market is higher than the price at which these houses are sold, a huge proportion of them will be placed immediately on the market once bought. The purchaser who manages to acquire such a house will make a handy windfall profit. This has happened in one or two cases with existing schemes. I will ask Mr. Ryan to elaborate as he has the exact details.
Mr. Ryan
We refer to a scheme on land owned by a local authority which was designed to deliver affordable housing to the market and involved three bedroom houses sold for €135,000 to people meeting the affordable housing criteria. Some of those people have sold on within 15 months and, even taking the claw back into account, have come out with an additional €45,000 to €55,000. Although these houses were provided as affordable housing, they are coming back on to the market at full market rate. The same would happen if any cap on land or house prices were introduced as soon as the houses involved became second hand at a further transaction.
I thank the delegations for their presentations. As a south Dublin county councillor, I wish to pick up on this question of the need to zone more lands.
I do not accept that the problem is a lack of zoned land. Even if more zoned land is made available, the problem of the land being serviced will still remain. The issue of servicing is as much in the hands of the private building industry as it is in the hands of local authorities. That is the way it works out in practice. There has been an increase in joint effort, in terms of servicing, by the county council and the building industry. Based on my experience, I do not see more zoned land as being the solution. The reason land is lying undeveloped is because builders have not decided to make their move on it. They are building elsewhere. There is a contradiction in what Mr. Gallagher said, which on the one hand is that there is virtually maximum output in terms of construction, while, on the other hand, he said that the solution is to zone more land. If the industry is close to maximum output because of all the other factors like the availability of tradesmen and so on, then how could zoning more land be of help? The only result of doing that, as far as I can see, would be to make more millionaires. It would also contribute to a scenario where land will be held for development for ten years instead of five.
There is a problem in regard to affordability. The percentage of a person's salary that is being spent on mortgages is much greater than what the previous generation spent, and that is continuing to rise. Middle-income people are not entitled to go on council housing lists as they are over the affordability guidelines yet they cannot afford to buy a house. The delivery of affordable housing under Part V would go a long way towards solving this problem. I recognise, however, the work that has been done by Fingal County Council in regard to affordability.
I accept that we are calling for the rezoning of more land, but we are actually calling for the servicing of that land as well as the servicing of land that has already been rezoned. While I do not have specific examples with me, land that was rezoned ten years ago is still unserviced.
Then why not concentrate on the servicing of land?
We have been. Senator Tuffy mentioned another thing which we are trying to promote as the only way to get things moving, which is to get the local authorities into bed with developers to bring on bigger tracts of land and get them serviced so that they can be made available to builders for building.
There is no doubt but that the more serviced land that becomes available the greater will be the impact on the price of land, which is what this is all about. There is a restriction on supply which has been there for some years. I will take a leaf out of the Kenny report in saying that one of the things which could be done at the zoning stage, is to zone lands specifically for affordable housing. That is something which has not been tried before, but it is one possible option.
Chapter 11 of the Kenny report deals with the causes for the increase in the price of land. We should bear in mind that this was written 30 years ago. It was stated in subsection 18 that the actions of public authorities were a further factor which could influence the trend in land prices, and while it did not propose to discuss all the ways in which this might happen, two of the more immediate relevant examples that were given to illustrate the point were, planning legislation and the rate at which serviced land was made available. It went on to refer to the introduction of the Planning Act and so on. Later it stated that delays and uncertainties, by slowing down the rate at which land suitable for development became available in the early phase of new legislation, tended to push up prices for sites. It also said that delays in the servicing of land would add to the pressure on prices by creating temporary or local shortages of sites suitable for development. Submissions made to the investigation contended that one of the main causes of the sharp rise of land prices in the Dublin and other urban areas during the past decade was a scarcity of serviced land, a view which was backed up by available information. If I read an extract from the Kenny report without indicating that it was written 30 years ago one would think it was referring to the current position. I submit that this was not acted upon at the time because economic circumstances took over and the pressure came off. We now have an opportunity to do something that will stop it happening again, even when the pressure does come off.
I welcome the two groups and the informed submissions they made. The debate so far seemed to focus on the alleged benefits of zoning more land with the aim of moderating prices and so on. The fact that the whole process is so long and drawn out also has an impact on the price of houses. The fundamental issue at stake is the common good while, at the same time, protecting the right of each person to private property. I believe the right of the ordinary citizen to buy a house is currently being infringed.
What, in the opinion of the delegation, is the best way forward? Should we revisit the planning and development legislation in order to incorporate the points that were made on zoning enough land, compulsory purchase orders, serviced lands, and the role of an Bord Pleanála among other factors? Would that help to sort out our dilemma and moderate the price of houses or should we amend the Constitution?
I am glad of the opportunity to say something about the planning system. In effect, we have two planning systems, if not three, currently in operation. A developer can go through the hoops with the planning authority and he then has to go through the same again with An Bord Pleanála. I do not have any doubt that the issue of planning needs to be revisited from top to bottom. Some improvements were made in the 2000 Act and a further improvement in the 2002 Act but the system is now so complex that it needs to be revisited. It would be worth going down that route first before we tinker with the Constitution because that might have grave and unforeseen repercussions. When one plays around with the Constitution one does not know what will come out of it.
On the planning side, may I ask Mr. Jim Wood to give us his personal experience of one site in his area to illustrate the difficulties that we, as developers, are up against.
We have heard from a number of other groups that there is chaos in the planning process. As a local authority member I am inclined to agree with that, so he is probably preaching to the converted.
Mr. Jim Wood
I will be very brief and will keep to one issue which would have solved the problem. I have a small family building business and we bought a site six years ago. It took five years and three planning applications to get planning permission on it. The problem is that a new road was needed for the area before the development could proceed. We had no issue with that but the local authority did not have the money to put in the road. It took five years for a State company to come on-stream for that road to be built, thereby allowing our permission to be issued and levies charged that would go back then to the local authority and the State. There is a chicken and egg problem here, as far as we are concerned. If one thing could come of this committee's finding it would be fantastic if there could be some way for this infrastructural chicken and egg issue to be addressed. If, for example, in year one of that planning process we had access to some facility to borrow the money to put in the road and then recoup that money during the life of the permission that would have brought houses on the market five years ago. Those houses are only now being built. It seems quite straightforward that private enterprise could address some of the infrastructural problems we have been examining in respect of serviced land.
Is the roll-out of infrastructure keeping pace with the demand for housing?
Was the delay that took place totally independent of any third party objection?
Mr. Wood
I will not go into detail on the matter but there were certainly third-party appeals to the development. It was not popular. However, the main issue was a lack of road infrastructure, and this is only now apparent.
I thank both deputations. Many of the questions I wanted to ask have already been put to the groups. I get the feeling that builders, as suppliers of houses, are not very happy with the planning appeal process. An Bord Pleanála was before the Committee of Public Accounts recently. What is Mr. Gallagher's opinion of the planning appeals procedure?
I will answer as briefly as I can. The first difficulty is the length of time it takes An Bord Pleanála to determine appeals after they are first lodged. The board has, in theory, a statutory four month period in which to make a decision, but frequently, within a week of the decision date, it issues a note stating that it will require an additional one, two or three months - it can be any length of time and, therefore, there is no certainty.
Let us consider the quality of decisions by An Bord Pleanála. A grant of permission is frequently received from a local authority, with conditions, but when someone appeals it, it can be totally upended for reasons that escape us. One could read through the small print and yet not develop a firm idea of why the planning application was rejected. The uncertainties this problem is adding to the process is causing huge delays. The decisions themselves are very inconsistent. We have heard of cases in which there were two very similar types of applications in similar areas, dealt with by the same inspector and with similar recommendations to the board, yet, for no apparent reason, a positive decision was made on one case and a negative one on the other.
The process of pre-planning consultation and lodging one's application is done at local authority level. More often than not, there are requests for additional information, which can extend the duration of the process by another couple of months. Then, if there is a third party appeal, the application must be considered by the board after a further month. We feel that all the reports - on roads, sewers, planning, etc. - have been carried out at this stage by all the people concerned and we cannot understand why it should take an additional four months for a decision to be made on the appeal by the board. Frequently, An Bord Pleanála is acting like another planning body, although its role is to review decisions and not to make new ones, but this is what it is doing.
I wish to thank the groups for their very detailed submissions and for the thought-provoking discussion.
Sitting suspended at 3.34 p.m. and resumed at 3.45 p.m.
The next item on the agenda is the presentation by An Taisce, which is represented by Mr. Michael Smith, chairman and Ms Sinéad Dullaghan, honourary secretary. I welcome the delegates to the meeting.
I remind 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 a presentation of approximately six to eight minutes which will be followed by a question and answer session from members.
I thank the acting chairman.
I propose that Ms Dullaghan give a ten point synopsis of An Taisce's stance and I will answer questions with assistance from Ms Dullaghan.
Ms Sinéad Dullaghan
It is a privilege to appear before the committee today and I thank members for the opportunity.
In making our submission on property rights in the Constitution, we called for more recognition of the public interest and full implementation of the Kenny report in order to ensure affordable high-quality development and the elimination of windfall re-zoning profits. As Mr. Smith said, I have a ten point synopsis of the approach we would like to see taken.
It is important that the committee takes a coherent view of rights across the range, given that there is a wide range of theories on the matter. For example, Jeremy Bentham said that rights are nonsense and the rights of man are "nonsense on stilts". It is important that one theory infuses the entire Constitution. We believe that a right is something which even the public interest cannot take away. We suggest that property be recognised as an entitlement rather than a right because it is trumpable in the public interest and is not essential to human fulfilment and integrity.
Deputy McCormack took the chair.
Ms Dullaghan
Property rights are not recognised in the South African or Scandinavian constitutions.
The Constitution should be amended as the existing one has allowed conservative interpretations of the common good and public interest. Examples are among local authorities, who singularly fail to exercise compulsory purchase orders in the common good, and in the 1985 Oireachtas report on building land, which undermined the Kenny report. A new self-contained article on property might state that every natural person is entitled to the peaceable enjoyment of his or her own possessions, subject to certain conditions.
Property has its duties as well as its entitlements. Property entitlements, since they carry with them duties, may be subject to legal restrictions, conditions and formalities, provided that these are duly required in the public interest. Such restrictions, conditions and formalities may, in particular but not exclusively, relate to the raising of taxation and revenue, property land use and planning controls, protection of the environment, consumer protection and the conservation of objects of archaeological, artistic, cultural or historical importance.
We support full implementation of the Kenny report and its extension in order that local authorities can buy any land at its existing use value plus 25%. This applies to commercial, retail or residential development and amenities. There need be no limitation of the scope of this power to designate its sites and it need not be presided over by a judge, although recourse to the courts should remain a possibility for disgruntled land owners.
Sustainability is an important element of the public interest and an amendment to the Constitution could usefully include explicit inclusion of the concept of sustainability and inter-generational equity. Sustainability is a concept which post-dates the Constitution and it should now be recognised as it has been in the South African and draft EU constitutions.
Quality of life is an important element of the public interest. The tacit goal of society seems to have emerged as the promotion of quality of life and this should be recognised. Too often, standard of living is used as a poor indicator of this, which is responsible for many poor decisions. To promote quality of life it is necessary to systematically monitor it through indicators.
An Taisce believes that a land use commission should certify zonings and re-zonings for compliance with relevant criteria. This should include compliance with the National Spatial Strategy, regional planning guidelines, proper planning and sustainable development, flood plain strategy and so on.
The Constitution should assert that landowners should pay penal rates of taxation on windfall zoning profits. This taxation should then be diverted to local authorities for expenditure in the area in which the zoning occurs to help with the provision of social and affordable housing and amenities, so that it goes back into the community where the land is located. The opinion of the authors of the Kenny report is that the community is entitled to the whole of the increase in price in undeveloped land attributable to works carried out by local authorities and that this should apply also to the increases due to the decisions of local authorities.
Everyone who is in need of accommodation has a right to accommodation. There is an entitlement to social and affordable housing because basic human endeavours can only be conducted against a background of proper housing. This should be recognised in the Constitution. Elderly and retired people have the right to the same standard of housing as working people. Local authorities should facilitate access to the countryside through provision of networks of bridleways and by encouraging farmers, for example by underwriting insurance, to allow walkers on their land. It is debatable whether it should be recognised in a modern Constitution, although a right of access to nature is recognised in Swedish fundamental law. The right to an improving environment should also be included and is included in the Amsterdam treaty and the Convention on the Future of Europe draft European constitution.
I thank the representatives of An Taisce for the presentation. I am somewhat surprised at the assertion in the first page of its submission that property is not a general or fundamental right. As a non-lawyer, I would have thought that according to the Irish Constitution property was a fundamental right. Is An Taisce saying that it wants that changed?
Mr. Smith
I suppose we are. Trawling through a number of progressive constitutions from around the world, including those of Finland, Sweden and South Africa, I found that they do not expressly recognise a right of property. They are more inclined to recognise the circumstances in which it is permissible to interfere with or curtail that right. We have recognised that property should be an entitlement, but we do not think it is a fundamental right such as the right to be treated equally before the law. We consider that is should not be recognised under Article 40°3, but that it should be recognised as an entitlement, which is somewhat subsidiary to a right, under a revised and revamped Article 43°. We felt that the right was so circumscribed by the public interest that it was not really meaningful to recognise it as such. We also considered that unlike, for example, the right to be treated fairly or the right to justice, it was not absolutely essential to human dignity and integrity and it is probably not absolutely necessary to the fulfilment of human nature or a proper life plan. The European Convention on Human Rights and the UN recognise this right and we feel it is appropriate to do so, but it should be accorded a status considerably lower than the really important, fundamental rights such as the right to be treated equally before the law.
That is certainly quite a radical opinion.
I represent the constituency of Sligo-Leitrim and An Taisce has made several comments about planning permissions in that area. What is the actual procedure in these cases? Is there a board that verifies that a submission is made, or is it done by a single individual acting on behalf of An Taisce?
Mr. Smith
I was not prepared to answer questions so specific to the operations of An Taisce, but in general, appeals must be ratified by the national organisation. I believe that there is not a fully functioning Sligo-Leitrim association at the moment and in those circumstances, the appeals in that area are channelled through the national organisation. There is a very complex procedure for dealing with appeals involving a dispute. This involves the local representative, the chairman of the national organisation and the chairman of the organisation's policy committee which deals most closely with the particular application. There is a complex procedure, but we operate proper control mechanisms, as befits an organisation that is a prescribed body under the planning Acts.
I did not quite understand what Mr. Smith said. Is he saying there is no procedure in the Sligo-Leitrim area?
Mr. Smith
There is a procedure, but I do not believe there is a fully functioning association in either county.
There are certainly an enormous number of submissions by An Taisce, so I find that somewhat surprising.
Mr. Smith
The Deputy will find they are being channelled through the national organisation.
They are all coming through the national organisation?
Mr. Smith
I believe they are being channelled through the national organisation, yes. There is a perception, as I heard from one of the Deputies earlier, that An Taisce is closing down the country. In fact, the organisation appeals 300 schemes every year, nationally, out of 70,000 that are granted permission. It is important to note that we appeal only one in 250 schemes. Very few people around this table would deny that at least one in every 250 schemes granted permission should have been subjected to some sort of appeal or control. We exercise our function cautiously and conservatively.
Ms Dullaghan
I might add that 90% of the appeals we take to An Bord Pleanála succeed. This is because we take an approach based on the guidelines of the Government. An Bord Pleanála sees fit to agree with us in 90% of cases.
I ask the members to ask questions and the representatives to deal with the questions that are asked.
I thank the representatives sincerely for their submission. Most of An Taisce's proposals could be introduced through current legislation; we should not have to amend the Constitution. Where do the representatives see it necessary to do so? Amending the Constitution is a cumbersome process and takes years - it should not, but it does. There is also a level of risk involved as the amendment may not be carried. All the proposals I have heard so far could be achieved through legislation. Why should we change the Constitution?
Mr. Smith
There is ambiguity in the Constitution. The review group quotes the Chief Justice drawing attention to the unhappy wording of Article 43 in particular. It seems to enshrine very strong property rights with one hand and take them away with the other. That is the main problem. An Taisce has noted that local authorities across the country are very reluctant to exercise their compulsory purchase powers, even where we consider it clearly in the public interest. The advice being offered to local authorities is very conservative because of this ambiguity.
The Law Society said there was no constitutional impediment at any time to compulsory purchase; local authorities are simply not doing it. The thing to do is to test it.
Mr. Smith
We must set aside the issue of what the law actually is. There have been decisions that were very conservative in interpreting property rights, particularly early on. The advice offered to the Oireachtas committee on building land in the 1980s was that the implementation of the Kenny report would be unconstitutional. I do not deny what the Law Society stated but I do——
That would have changed following the test of Part V of the recent Planning and Development Act.
Mr. Smith
That is true to an extent but we still encounter very conservative legal advice being offered by local authority lawyers. Local authorities will not compulsorily purchase lands even when it is clearly in the public interest to do so because they believe that the public interest is to some extent served by the private interest, even when there is a clear case that a CPO would serve the public interest. The evidence for that is that the use of CPOs is low, even though it is legally and constitutionally permissible to use them more often.
I would not argue with the Law Society but there is an ambiguity in the Constitution. There is a lack of clarity between Article 40°3 and Article 43° and it would be better to clarify it. In other circumstances we would argue with local authorities that the Constitution allows them to take a more progressive and assertive line on CPOs but the ambiguity is the major problem.
Which of these proposals would An Taisce prioritise? A number of the proposals involve constitutional change, such as those dealing with sustainability, the right to shelter, the right to access to the countryside and, most important, that property rights should not be fundamental. There is detailed proposed rewording for Article 43°. Does it need to be so detailed? There are already three subsections to the Article. We should also hear more about the idea of a land use commission.
Mr. Smith
The proposed replacement for Article 43° is considerably simpler than the existing article. Stating an entitlement to property could not be clearer. It would be useful to add to that entitlement Thomas Drummond's phrase that property has its duties. We have changed the word from "rights" to "entitlements", so we would say that property should have its duties as well as its entitlements. Beyond that, it is essential that the circumscription of the right should be laid out because that is where litigation would arise. It is important that there should be commercial certainty and the Constitution should lay down the chief restrictions in the public interest on the exercise of property.
Much of what we propose is important. Property should be primarily exercised in the public interest, a major change in the thrust of the Constitution. Beyond that, we are calling for the implementation of the Kenny report. It is appalling that 20 years on the report has not been implemented because therein lies a solution to the issue of the housing crisis and the excessive prices. If the report was implemented and there was more use of CPOs, we could see higher quality development with better amenities. It would result in cheaper and better housing.
Beyond that we are looking for things that are reflective of our remit. We want to see sustainability recognised in the Constitution. That is a perfectly reasonable demand in 2003. It is recognised in the Constitution on the Future of Europe, the Amsterdam Treaty and even in the South African constitution.
Quality of life is an overriding consideration. In times which are arguably post-religion, quality of life is the goal of many people in society and of politics and that should be recognised. It is so important, in fact, that it might even be recognised in the preamble to the Constitution.
Local authorities should continue to exercise the primary function in zoning and rezoning in the interests of subsidiarity but we would like to see a national land use commission with a supervisory remit that would have to certify that those zonings and rezonings comply with elementary criteria such as the National Spatial Strategy. The current practice among local authorities undermines the prospects for regional development and massive over-development has taken place in the Dublin hinterland in Counties Meath, Wicklow and Kildare. If there was a supervisory function, excessive rezonings in those counties would not take place and this would afford an opportunity for the gateways, such Galway, Limerick, Waterford and Cork, to gain the critical mass they will need if they are to be successful, self contained and capable of competing with Dublin.
A national land use commission should certify all rezonings for compliance with the spatial strategy, regional guidelines when they are drawn up, proper planning and sustainable development. We would also like to see a flood plain strategy and this body would certify that rezoning was not taking place in areas subject to flooding.
This commission would ensure that the National Spatial Strategy, with which we all agree, is implemented on the ground. I was involved in litigation against the development plan for County Meath on the basis that it provides for a disproportionate population in County Meath, which the judge accepted. He accepted that rezonings in County Meath are a cause for concern.
He also upheld the plan.
Mr. Smith
He did but for the purposes of——
Mr. Smith is the second person who referred to this and on neither occasion did anyone say the plan was upheld. Witnesses cannot be selective in their quotations.
Mr. Smith
No one said the plan complied with the National Spatial Strategy either.
I have listened to An Taisce say that the Constitution should reflect improvement of the quality of life as an important goal of society. That makes me laugh. I have often seen a person moving to the countryside to improve the quality of his life applying for planning permission only to have it objected to by a faceless bureaucrat from An Taisce. Is Mr. Smith a full-time employee of An Taisce? Has he declared his interests and where can we see them? Could we see a list of all the members of An Taisce? I have been a councillor in County Clare for 18 years and I do not know who is a member of An Taisce but it cuts across my work and objects to planning applications. Everyone knows who I am as a TD and a councillor.
I want to return to the debate on the Constitution.
This is important. We are talking about property rights and quality of life. I have to declare my interests as a TD and councillor and everyone can see them. An Taisce can object to everything and declare nothing. Could Mr. Smith please answer that for me?
Mr. Smith
I had hoped to talk about the Constitution but I can probably deal with the question very quickly. We do not consider that we are exercising a major influence on the 36% of housing being built in the countryside. We appeal about 100 to 150 one-off houses. We believe there is a better way. There are problems with the quality of life in the longer term with an ageing population and with our demographics and so on if-one off houses are built at a rate of 36% in the countryside. We are arguing that development should take place primarily in rural towns and villages and not in Dublin. That is a simple message from An Taisce because it will improve the national quality of life.
I am not paid by An Taisce, nor is the honorary secretary. While I would not be self righteous about it, there is nothing particularly striking about my vested interest that interferes with our taking of a public interest stance on issues such as this.
We have 27 associations across the country. The names of the officers in all of those associations are available from our head office or our website. They are no big secret. We do not publicise the names of members because they only join because they support an environmental cause. It is not normal for charities, which is what An Taisce is, to reveal the names of the members. I wish it was not but it is in breach of the Data Protection Act 1988 for us to reveal the names of ordinary members of the organisation. Otherwise we would do it because people keep making out that there is something private about the way An Taisce operates.
An Taisce is a transparent, open organisation, but no more than any political party would give a list of its members, An Taisce is not entitled to breach the privacy of people who are just ordinary members and do not actually get involved in anything other than to pay a membership fee and receive our magazine. It is not legal for us to reveal their names. The names of the officers and the activists are——
We are straying into matters which are not relevant to our agenda, which is the review of the Constitution, but I had to allow Mr. Smith to reply.
I am trying very hard not to enter into this debate. I wonder if Carton House in Castletown would ever have been built if An Taisce had existed at the time. Anyway, let us return to Article 43°. I wish to develop the point that was made by Deputy O'Sullivan. The proposed new wording provides that "every natural person is entitled to peaceful enjoyment of his or her own possessions and property" subject to paragraph (3) below. This paragraph (3) is effectively legislation. An Taisce is putting legislation into the Constitution.
Experience teaches us that the more detail we put into the Constitution and the more we try to incorporate legislative aspects into it, the more fraught things become and the more unintended effects appear. The X case would be one instance of where there was an entirely unintended effect. The amendment was put into the Constitution in good faith in the belief that it would secure one objective but something totally different and contrary happened.
Would An Taisce be prepared to accept that the wording should be, "every natural person is entitled to peaceful enjoyment of his or her own possessions and property subject to law," as well as providing that property has its duties as well as entitlements? Why do we need to define all these aspects? If we define them the courts will be asked ultimately to say what, for instance, proper land use and planning controls are. It will ultimately come down to the courts to define precisely what these mean. It is fraught in terms of the possibility for legal challenge.
Regarding quality of life issues, the phrase "systematically evaluated through indicators" was used in An Taisce's presentation, which I do not understand. What in the name of God does that mean?
Ms Dullaghan
That means establishing indicators for quality of life, a number of measures whereby one could realistically measure quality of life.
I assume then that An Taisce would determine what the qualify life was rather than anybody else?
Mr. Smith
One could look to the OECD for example, which has guidelines on quality of life indicators. British Prime Minister Tony Blair is making a feature of quality of life indicators in order to assess the success of society. At the moment too much emphasis is put on economic growth, and over the past few years we have witnessed accelerated economic growth but, arguably, a diminution in quality of life and we——
Excuse me, but some people would say that there had not been enough emphasis on economic growth. There are people who would argue that. It is up to us as legislators to find a balance between all those arguments.
Mr. Smith
I accept that but it would be helpful if we adopted state of the art thinking on this, which is to monitor the success of society on economic, social and environmental goals. One could list up to 100 goals across the range, including employment and crime rates, property ownership, access to green space and time spent commuting. If we assessed those rather than just GDP growth we would have a better indication of whether society is succeeding.
The likes of the OECD and even the EU are promoting those ideas. It is a systematic way of assessing whether society is improving. I agree with the Senator that there are a lot of people whose quality of life has massively increased with the economic boom.
To return to the Senator's first question, we would run with something like "subject to the public interest in accordance with law." It is important to use the term "the public interest." What I have outlined are just iterative, not comprehensive. I just mentioned some of the ways in which property rights might be curtailed in the public interest. Arguably, it is in the interests of landowners to have some sort of idea——
Would Mr. Smith accept the proposition that the more detail one puts into the Constitution the more fraught it becomes and the more likely one is to end up down in the High Court?
Mr. Smith
I do not think so in this case. What we have outlined is a definition of the public interest rather than a definition of peaceable enjoyment. We have tried to define the exception, which is probably different from trying to define the norm - the entitlement to peaceable enjoyment.
We have ten minutes remaining in this slot and I have two questioners.
I welcome the delegation to the committee. An Taisce is perceived in here as being concerned only with the environment, whereas it probably perceives the Government as only being concerned with the economy. There is probably a mixture between the two. I know An Taisce says it holds a brief for the economy and other issues apart from the environment.
To get on to the Constitution, I have a copy of the Finland constitution with me. People must think that I am a bit of a nerd but I had it in my office so I ran up to get it. I see the distinction that An Taisce makes. It includes a right to vote and to education but in terms of property it simply states that the property of everyone is protected. It then states that provisions on expropriation of property for public needs are laid down in an Act. I tend to agree with Senator Dardis. I know Mr. Smith is saying that the points made after the first two paragraphs of An Taisce's proposed wording are just illustrative but there is an argument for leaving the wording as bald as possible.
While An Taisce is saying it should be changed from a right, it concedes that it exists as a right but is also protected. An Taisce says that is ambiguous but others would say it is flexible and appropriate. What An Taisce is then introducing could also potentially create ambiguity because there will be arguments over the whole thing. I do not have a question and, to be honest, I am simply agreeing with An Taisce's view. I cannot help noticing that at the end of its submission An Taisce goes through all this material about Northern Ireland, the New Ireland Forum, the new Republic, the Good Friday Agreement and so on. I am not sure what all that is about. What is An Taisce telling us about there?
Yes, the Deputy did have a question. I will allow Mr. Smith to answer it.
Mr. Smith
We look to the more egalitarian models like Scandinavia, which tend perhaps to play down property rights in the public interest. An Taisce is prepared to be unpopular in the public interest. It is very much public interest-driven. The success of society is supposed to be a combination of economic, social, environmental and cultural factors. We treat that, as one would expect given our genesis, seriously. We suggest that in future reviews of the Constitution that there might be representatives from the environmental and planning sectors as well as from the economic and social groups.
I welcome the submission from An Taisce. In it, An Taisce considers that property is an entitlement that may be exercised only when it is in the public interest. An Taisce would like the Constitution to be amended with that in mind. If that were put into the Constitution, does An Taisce believe we would win a referendum?
Mr. Smith
I believe it would be won because it would be sold as being absolutely crucial if we are to improve quality of life. It would be sold as being linked with problems of affordability of housing, infrastructure and the quality of housing and amenities. An Taisce is driven by the fact that we have 1.2 million houses in the State and over the next ten years we will build 500,000 new houses. It is important that they are built in the public interest. We could have the best planned State in the world if we take care of it. If this idea were sold that this is essential to the quality of life and radical measures are needed to promote affordable quality housing it would be a populist measure.
In the submission there is a reference to a Drummond. Who is this Drummond?
Mr. Smith
I believe he was an eminent Corkonian and his statue is the main one in Dublin City Hall.
What has he published or done?
Mr. Smith
He is most notable for the phrase "property has its duties as well as it rights." He also has had his statue erected in recognition of that aphorism in Dublin City Hall.
That concludes this presentation.
Sitting suspended at 4.23 p.m. and resumed at4.26 p.m.
This is the final session for the day. I welcome the Farmers and Property Owners Association. I must remind the delegation that the members of this committee have absolute privilege but the same privilege does not apply to witnesses appearing before the committee. We have read the written submission from the association. The delegation can briefly outline their case.
I want to apologise for the fact that Dr. Yvonne Scannell is not available. That is why we wished to postpone our submission until tomorrow.
We are all concerned with the property rights, as we all know they are vital to people. The Constitution set that out very well in 1937. Any diminution of those properly rights will be of concern to every citizen. The natural right of private ownership should be upheld at all times.
Another area of concern to the association is the common good. The term "common good" is an immeasurable one. If it is to be defined, for the future it must be carefully considered. In our submission we refer to the Crosby case which was extraordinary. We would not like to see that happening again any time in the future. We must guard against this kind of development. There was also a case in the Glen of Imaal before the Occupiers' Liability Act 1995 was introduced. A postman in that area owned land and a case went against him under the Occupiers' Liability Act, costing him £500,000. This is one of the issues that we are concerned about. Dr. Scannell's submission highlight most of our concerns in this area. These should be considered carefully by the committee.
Mr. Sean Byrne
Far from weakening any of the rights of property owners, they should, in fact, be strengthened. An example of the problems with access and trespass that are encountered by property owners can be seen in County Wicklow. There is the feeling among recreational users that there is a cultural right to trespass on private property in County Wicklow and the greater Dublin area without any recourse to the owners. I suggest that far from weakening the constitutional cover we have, it should be reinforced.
The association are right in their assessment that the Keep Ireland Open group were complementary of the contact between the various users of the Wicklow Hills. Is there any evidence, apart from the damage to property and attendant problems, of actual environmental degradation or of species, either flora or fauna, being affected by access?
Mr. Byrne
A map and compass have become redundant over any of the mountains in Wicklow now, there are so many pathways eroded into them. A blind man would almost find his way over the mountains now, and the damage is there for all to see. If one looks at stone walls and landscape infrastructure, one sees that it has all been damaged by pure dint of too much recreational use. There is no funding or plan for maintenance. We have the people to do the damage but none to make the repairs and make good the landscape.
The point was made to us this morning by the IFA regarding access to land, particularly in the west, that people are making commercial business out of this. In other words, they are benefiting from bringing walkers to Ireland, but there is no attendant benefit to the landowner. Perhaps Mr. Byrne might comment on that aspect.
Mr. Byrne
I have every sympathy with people who are trying to bring tourists into the country. The walking product in particular is a very big seller in Ireland and is one of our greatest resources. While we have commercial companies bringing in walking groups to walk on the mountains of Wicklow, in the west and everywhere else, no contact is being made with the owners of the land. The only way that the tour operators can put the people in there is through trespass. The situation is scandalous. I certainly do not blame the landowners for it, for in Wicklow we have very much gone out of our way to accommodate all users with absolutely no resources. In the west of Ireland I believe that there have been several cases where the situation has become quite volatile between users and landowners.
What about all the rubbish that is left behind? People use the countryside, tramp on it and leave all their rubbish after them. We are picking up perhaps five or six bags of rubbish a week from the beach at the top of Lough Dan.
Mr. Byrne
It happens every weekend from Easter until the end of the summer.
The walking tour operators are making money from this. Perhaps in the west of Ireland and in Wicklow some compensation could be paid to the farmers per walker. There must be something that can be done.
I gather from what has been said that the net point is that the Constitution should be left alone and that there is no reason to improve it or otherwise from the point of view of property owners.
I see no need for it. The property rights should stand, for they are as valuable to the Irish people as they were when constituted in 1937. That is essentially our opinion.
As a committee we are trying to achieve a balance between people's right to access the countryside and the rights of the owners of the land not to be disadvantaged by that access. We have had proposals, for example, from the Irish Uplands Forum, which look to the right to access mountains and so on, but suggested that there should be indemnity from any claims by recreational users and compensation for damage to property and tax relief to compensate for general wear and tear. If there were all those kinds of safeguards, would the delegation accept that people have the right to walk over the beautiful lands of Ireland? I do not walk in Wicklow, but I certainly walk the hills of Kerry, Clare and South Tipperary. I would feel very aggrieved if I were not allowed to do so. I do not leave litter, and I would be willing to take some responsibility. I would also be in favour of the public purse taking a certain responsibility regarding the rights of landowners. Would the delegation come halfway on this if they felt their concerns were being taken on board? Would the delegation accept the right of people such as myself to access the beautiful parts of our country that happen to be in private ownership?
To be fair, that is already the case. Many people in the Wicklow area allow people to walk through their land. That seems fair enough, but perhaps compensation could be made for any damage done. The west of Ireland is another matter. There seems to be more confrontation in the west than in Wicklow. People in Wicklow are fairly easy, and we get on well with most of the people up there. Perhaps the west of Ireland might need something of that sort. The landowners there have problems and feel aggrieved by the fact that damage is being done without their getting compensation for it. As I said before, the tour operator is making money from them. However, Wicklow people are generally all right about it, though Mr. Byrne can correct me on that.
Would the group accept that in the public interest access be allowed to places as long as the rights of the landowner are also protected?
Mr. Byrne
The Deputy asked if we would meet her halfway. At present, we feel that we have given quite a lot, but the offer to meet us halfway was the first I have heard.
I am not personally offering to meet you halfway.
Mr. Byrne
Mr. Kenny and I were at a meeting in Enniskerry two weeks ago, and our lane is about half a mile off the public road. We had to abandon our car at about 11.30 p.m. and walk the remaining half mile in the pitch dark without a torch because we were not expecting to be shut out of our own property. A group of cars had been parked there. People were going into the mountains to stay overnight. It is very hard to be nice to the next guy that one sees parking there if he is even halfway blocking a laneway. We have tolerated all that. Our land is open, and I have never told anyone not to enter it. I have never put up a "private" sign on it. However, I have put several stiles over vulnerable ditches and gates over which people can cross without having to tear down fences. I have never been offered or received any assistance from anyone. I have done that to save myself the work of fixing the fences the next day or the day after. We are always ready to meet people, but I would be very cautious about the offer from the other side.
Our job is to make recommendations that would work for both groups.
Mr. Byrne
In a county such as Wicklow, public liability is a burning issue, for none of us is safe from the public, and none of our land is safe. My land has some very dangerous spots on it. Mr. Kenny referred to a neighbour of ours at Glenmacnass . The waterfall there is beautiful, and the owner will have to fence it off. He was prosecuted by the family of a man who died on it, and the damages awarded were over £500,000. The owner had absolutely no control over that. He did not make the landscape the way it is, and he did not fence it off so that people could go in and view the falls. We are all in the same position. We have lake shore, cliffs, rocks and very rough ground, so public liability should be accepted by the State. Areas deemed to be nice, where people will go walking, may extend quite far. However, we should not be asked to carry any responsibility. We thought that the 1995 Act had cured all that, but a recent case in Donegal has left that as wide open as ever.
I thank the group for its presentation. It will be considered along with all the others.
The joint committee adjourned at 4.40 p.m.sine die.