I welcome the opportunity to appear before the Seanad today to discuss the Planning and Development (Amendment) Bill, 2002, the primary purpose of which is to amend Part V of the Planning and Development Act, 2000, which deals with housing supply. The Bill will also make other miscellaneous amendments to the 2000 Act and certain amendments to the Housing (Miscellaneous Provisions) Acts, 1992 and 2002, and the Housing Finance Agency Act, 1981.
I stress that the Government is committed to making Part V work. There was never any question that I would set aside the requirement on housing developers to make a contribution to the provision of social and affordable housing. My aim is to remove obstacles and make Part V work to ensure a continued good supply of housing which is the only way to affordability. The changes now proposed are designed to make the system operate more efficiently and effectively, eliminate the rigidities that were slowing down supply, and bring more social and affordable housing on stream more quickly, while continuing to promote social integration.
A review of Part V was promised in An Agreed Programme for Government to ensure it was meeting the objectives in relation to social and affordable housing. The review was initiated mainly because complaints had been received that the system was overly bureaucratic, not only from developers, but also from local authorities, and because it appeared to be slowing down supply – the opposite of what was intended.
In initiating a review the Government's aim at all times was to boost the supply of housing, particularly social and affordable housing. A key element was the continued promotion of social integration. The review, which was conducted with all key stakeholders, reached some interesting conclusions on which there was a fairly general consensus: the provisions in relation to making housing strategies and the requirement to zone sufficient land for residential development were positive; there was a need for increased flexibility and less bureaucracy in the operation of the provisions of Part V; the provision of an adequate supply of social housing was essential; and there was no support for a complete repeal of Part V.
A number of stakeholders also raised the issue of the provision which causes certain planning permissions to wither after two years. This provision was not viewed as helpful in terms of increasing housing supply. The changes announced in the Bill are specifically designed to meet the concerns about bureaucracy and flexibility expressed in the review and thereby boost housing supply.
The Bill will replace section 96 of the Planning and Development Act, 2000. The purpose of the new section is to give new options as to how an applicant for permission for development can comply with the requirements of Part V. At present agreements are confined to providing land within the proposed development for the local authority or providing houses or sites within the development. In addition to these existing options, the applicant for permission will now be able to reach an agreement to reserve land or provide houses or sites at another location, or make a payment to the local authority which will be used for the provision of social and affordable housing, or agree to a combination of any of these options.
In considering whether to make an agreement as an alternative to reserving land within the site which will remain the primary requirement the authority will have to consider a number of important issues, the most important of which will be the need to counteract undue social segregation in the area. Social integration does not mean making people live side by side. Some voluntary housing bodies argue against "pepper potting" houses through estates for management reasons. It does mean ensuring all the people of a community, of all kinds, are represented within a locality, going to the same shops and schools, benefiting from the same community facilities and transport links.
I am determined that this new flexibility in Part V will not lead to builders providing new estates at the edges of communities with no social links or infrastructure. I will be setting firm guidelines for local authorities as to the types of alternative arrangements that will be acceptable in terms of social integration. The agreement's potential contribution towards achieving the objectives of the housing strategy and how quickly housing is likely to be provided as a consequence of the agreement will also be considerations for the local authority.
These changes to Part V are all about delivery of housing more quickly and efficiently. The new provision will not lessen the obligation on developers. Any agreement under the Bill must result in a contribution of an equivalent monetary value to the reservation of land within the development. In practice this means the equivalent of whatever the local authority would have saved if it was acquiring the land within the development at existing use value instead of market value. Any alternative arrangement must be of equal benefit.
These changes to Part V will introduce flexibility into the system which will give local authorities a variety of choices in deciding how social and affordable housing requirements of their communities are to be met. They are firmly within the principles of Part V – to integrate housing supply fully into the planning system and require applicants for permission on residentially zoned land to contribute towards meeting the existing need for social and affordable housing. The system in Britain requires developers to make up to 30% of larger developments available as social or affordable housing. The aim of their policy is also to achieve mixed communities with a balance of housing types and tenures. The difference is that, through their more flexible system, they are delivering low cost and social housing. It has become a normal and accepted part of the planning process for developers to negotiate with local authorities on social and affordable housing provision and build those houses, either as part of the development or at another location.
This is what we are doing, building in the same flexibility and trying to ensure Part V becomes a settled part of the planning process in Ireland. One may ask the reason developers or landowners should contribute towards social and affordable housing. The value of land is increased by a decision of a local authority to zone land for residential development. Part V is based on the principle that there should be some benefit to the community arising from that decision and that developers should contribute some of the gain back to the community. It was this principle that was upheld by the Supreme Court in the summer of 2000 when it declared that Part V was constitutional.
The review of Part V also signalled problems with the provision under which certain permissions withered after two years. This withering provision was introduced to put all planning permissions on an even footing as soon as possible in relation to social and affordable housing. However, it is now estimated that permissions for many thousands of houses would expire because of it at a time when it is critically important to ensure continued supply into 2003 and 2004. I therefore propose to insert two new sections into the Planning and Development Act, 2000.
Section 96A reverses the impact of section 96(15) of the Planning and Development Act, 2000. Section 96(15) provided that permissions for residential development granted after 25 August 1999 but before a housing strategy is included in the relevant development plan in accordance with the Act, and to which Part V of the Act would have applied had the housing strategy been incorporated when the application for permission was made, would last until 31 December 2002 or for two years from the date of the grant of permission, whichever was longer. Planning permission would expire for those houses within the development for which the external walls had not been built by the relevant date.
Section 96A removes that provision and provides that the normal rules concerning the duration of permission will apply to those permissions. These permissions are not subject to Part V requirements because they were applied for before the Part came into force. However, it is consistent with the principles on which Part V was based that developers of the houses in question should be required to contribute towards the cost of social and affordable housing.
In return for extending the duration of permissions affected, developers will be required to make a once-off contribution towards funding social and affordable housing. The alternative was to do nothing and leave these sites to wither. There would have been no gain, financial or otherwise. I chose to try to keep the sites viable and to go further than was provided for in the previous Act by seeking a levy from the developers which will go directly to the local authorities. They will thus have more funding available to them for social and affordable housing. I hope Members who comment on this point will be prepared to propose another alternative. The one facing us was to leave the sites to wither, in which case nobody would gain anything. A total of 80,000 permissions would have been lost from the market on the supply side. I have restored them but have gone further by securing a substantial community gain for the housing stock. That is a more imaginative approach.
The response from the building industry is positive in this regard. Without this we would have had nothing. I hope people do not confuse this provision with regard to withering with the other elements in Part V because they are separate. It was a question of doing something or nothing and I believe we took the right course.
Section 96B provides that a levy must be paid in respect of each house for which permission would have expired, if this Bill were not passed. It should be emphasised that it is not a levy on all houses built in future, just on those whose permission is being restored. The levy, which will be 0.5% of the cost of a house with a value less than €270,000 or 1% of the cost of a house with a value equal to or greater than €270,000, will be paid to local authorities to put towards the provision of social and affordable housing. Setting the levy at this level should not discourage developers from building out these permissions and will be an incentive to set the price of the houses that are built at an affordable level.
Payment of the levy will be a condition of the planning permission for each house and will be the responsibility of the developer. There may be concerns that this cost will be immediately passed on to the purchasers of the houses but the section prohibits this. It provides that if an agreement of sale includes a requirement on a purchaser to pay the levy, that term of the agreement will be void and the money, if paid over, can be recovered.
I will now deal with other sections of the Bill in detail. In preparing the Bill, a number of amendments to the Housing Acts to facilitate the supply of housing were included. The opportunity was also taken to make a number of miscellaneous and mostly technical amendments to the 2000 Act. Part 1 of the Bill contains the standard citation and definition sections. Part 2 contains the provisions to amend Part V of the Planning Act, which I have already outlined.
Part 3 of the Bill contains the other amendments to the 2000 Act. These are mainly technical amendments. Sections 7 and 8 amend the provisions dealing with local area plans, to clarify that land may be zoned in a local area plan. In addition, a second public display period will be provided for where it is proposed to make material amendments to the plan following the first display period. This is similar to the requirements for development plans.
Section 12 will permit a decision by a local authority on a declaration in relation to a protected structure to be referred to An Bord Pleanála for review. This will be similar to the procedures where a local authority makes a declaration on what is or is not development, or exempted, under section 5 of the Act.
Section 13 amends section 239 of the 2000 Act to permit regulations to be made in relation to the granting of certificates of safety for fairground equipment which refer to technical guidance documents. Section 14 amends section 262(4) which provides that certain regulations made under the Act are subject to a requirement to get positive approval. This amendment will remove the requirement to get positive approval for procedural regulations in relation to development by State authorities while retaining the requirement that regulations determining the types of development which are approved under this special procedure will be subject to the positive approval requirement. Therefore, the same rules will apply in this case as, for example, in relation to a local authority's own development.
Part IV of the Bill makes amendments to other legislation, namely, the Housing (Miscellaneous Provisions) Acts, 1992 and 2002, and the Housing Finance Agency Act, 1981. These amendments are also designed to ensure a continued supply of housing.
Sections 15 to 18, inclusive, amend the Housing (Miscellaneous Provisions) Acts, 1992 to 2002, to introduce measures to facilitate the provision of affordable housing. The amendments complement the changes to Part V. The changes will allow approved housing bodies to provide affordable housing for sale, in addition to providing houses for rental. The voluntary housing movement is keen to get involved in providing affordable housing which these amendments will facilitate by permitting them to provide houses under the affordable housing and shared ownership schemes and by providing that persons granted a shared ownership lease by an approved body will be eligible for subsidy on their rent.
One important change is that the terms of the shared ownership scheme will be amended for voluntary housing bodies to allow them to retain part ownership of these houses and so ensure they remain within the affordable housing market. Under these amendments a person granted a shared ownership lease by an approved body will not be required or entitled to eventually purchase the interest of the body in the house. The lessee will, however, be entitled to eventually sell his or her interest in the house to a person who meets the eligibility criteria applicable to the scheme. The House will agree that this scheme represents a reasonable balance between the right of the lessee to purchase an interest in a house and the retention of a social equity in the house, and will facilitate the provision of integrated housing projects by the voluntary and co-operative housing sector, comprising a mix of social rented, shared ownership and affordable houses.
Section 19 amends section 10A of the Housing Finance Agency Act, 1981, as inserted by the Housing (Miscellaneous Provisions) Act, 2002, to correct a technical error in the section to permit the National Treasury Management Agency to borrow on behalf of the Housing Finance Agency. While the error was technical, it could have prevented the NTMA acting on the HFA's part when borrowing money.
I reiterate that the Bill is primarily about improving housing supply and promoting social integration. The new flexibility will speed up agreements and free up resources. Agreements will be concluded more quickly and more social and affordable housing will come on stream more quickly. The level of contribution required from developers remains the same – there is no reduction. The agreements allowed under the Bill will ensure it continues to support the objective of social integration. I commend the Bill to the House.