Rather than go through the remaining sections of the vacant site levy provisions individually - sections 6 to 26, inclusive, for example, are quite complex and detailed - I will, so that Senators can obtain a better understanding of how the proposed scheme will operate, instead give a summary of the provisions as follows. Beginning on 1 January 201, a planning authority shall establish and maintain a register of sites, entitled the vacant sites register, in lands zoned for residential or regeneration use which in the planning authority's opinion were vacant sites during the preceding year. Before 1 June 2018, a planning authority shall issue a notice to the owner of a vacant site included in the vacant sites register indicating that the site owners shall be charged a levy in respect of 2018 in January 2019, and that such a charge is to be continued every year thereafter until the site is no longer vacant.
A planning authority shall, as soon as possible after the entry of a site on the vacant sites register and at least every three years thereafter, determine the market value of a vacant site and serve notice on the owner of the site of the valuation or revised valuation of the site in question, which may be appealed to the valuation tribunal. A planning authority, or the valuation tribunal, may, on appeal, where it considers it appropriate, deem that a vacant site has a zero market value where no market exists for the site or the site is on contaminated land and the estimated remediation costs that are necessary for use or development of the site exceed the market value of the site itself.
With effect from 1 January 2019 and every year thereafter, a planning authority shall in respect of the preceding year charge a vacant site levy of 3% of the market value of a site on the owner of each site included in its vacant site register, which shall be payable on demand or by instalments if agreed by the planning authority. To help alleviate the financial burden faced by owners of vacant sites which are subject to a site loan, a zero rate of levy shall apply if the outstanding amount of the site loan is greater than the market value of the vacant site on the date of its determination. This is to address site owners in negative equity situations who may have purchased sites in the boom years. If the outstanding amount of the site loan is between 75% and 100% of the market value of the vacant site on the date of its determination, a reduced rate of 0.75% levy shall apply. If the outstanding amount of the site loan is between 50% and 75% of the market value of the vacant site on the date of its determination, a 1.5% rate of levy shall apply.
The vacant site levy will remain a charge on the relevant land until it is paid. If there is a change in ownership of a vacant site or the owner of a site dies, the amount of levy chargeable on such site in respect of that year or the previous year shall be zero. This shall not apply where ownership of the vacant site transfers from one company to an associated company, to another member of the family other than on the death of the owner, or for the principal purpose of avoiding the obligations to pay the vacant site levy. The vendor of a site on the register shall before the completion of a sale on the site, pay to the relevant planning authority any vacant site levy due in respect of that site. Any moneys received by a planning authority in respect of a vacant site levy will be spent by it on the provision of housing, or on the regeneration of the area. Regeneration expenditure can include the preservation or protection of structures of special architectural, historical or cultural interest; the provision or improvement of educational, recreational or cultural facilities for the local community; and projects or works to improve local shopping streets and business areas.
The provisions to which I have referred are set out in section 23. Essentially, they ring-fence the levy proceeds to be solely used for the provision of housing on the residential land or for the development and renewal of regeneration land. I tabled an amendment to this section to ensure the proceeds may be used on housing or regeneration land in the vicinity of the site, thereby providing greater benefit to the overall local area in which vacant sites are located. In line with fair procedures, numerous opportunities are provided for site owners to make submissions and appeals to planning authorities, An Bord Pleanála and the Valuation Tribunal in relation to the proposed inclusion of a site on the vacant site register, the annual notices of levy liability, the market valuation arrived at with regard to the site and the annual demand for payment of the levy.
Part 3 comprises just one section - section 27, which amends section 23 of the Derelict Sites Act 1990 to provide that the derelict site levy shall not be payable in respect of any land in respect of which the vacant site levy is payable under the Urban Regeneration and Housing Bill, when enacted. This is to ensure no double payment situation arises in respect of the vacant site levy or derelict site levy.
Part 4 deals with two separate issues - local authority development plans and development contribution charges applied by local authorities. Section 10(2) of the planning Act of 2000 outlines the objectives that planning authorities are required to take into account in the preparation and adoption of development plans for their respective areas. These objectives include the zoning of land for residential, commercial, industrial, agricultural, recreational and other uses in line with the proper planning and sustainable development of the area, the provision of necessary infrastructure to facilitate development and the preservation of structures of historical interest as well as the character of the landscape of the area. Section 28 amends section 10(2) of the 2000 Act to provide for the current objective incorporated in a development plan for the "development and renewal of areas in need of regeneration" to be broadened to provide that such an objective should be for the explicit purposes of preventing adverse effects on existing amenities in such areas, urban blight and decay, anti-social behaviour or a shortage of habitable houses or land suitable for residential use or a mixture of residential or other uses.
This amendment is necessary to support the vacant site levy provisions, elaborating on the principles and policies relating to the levy, and it outlines the basis for identifying lands as being in need of regeneration for the purposes of being so designated in a local development plan.
With regard to development contribution charges, these are generally used towards the provision of necessary public infrastructure such as new roads, footpaths, lighting, open spaces and car parking to service new developments. In line with action 14 of the Construction 2020 strategy, section 29 amends section 48 of the 2000 Act to provide that where a new development contribution scheme is adopted by a planning authority to provide for reduced development contribution levies compared to those which were in place under the previous development scheme, the reduced development contributions under the newly adopted scheme shall have retrospective effect for existing planning permissions that have yet to be activated. In addition, section 29 provides that where there are unsold housing units in a development, the new lower development contribution scheme will also apply to those unsold housing units. Section 30 amends section 49 of the planning Act 2000 to provide that the arrangements in relation to reduced development contributions will also apply in respect of supplementary development contribution schemes which are sometimes deployed for the purpose of facilitating a particular infrastructure project in a local authority area such as a new motorway intersection which will directly benefit the development on which it is imposed. These changes to the development contribution provisions should assist in reducing costs for developers, make developments more economically viable and influence developments to be brought forward sooner than might otherwise be the case and at lower cost, which is critical in terms of affordability and improving housing supply.
Part 5 relates to amendments to the existing Part V provisions in the Planning and Development Act 2000 concerning social and affordable housing. In this regard, action 9 of the Construction 2020 strategy called for the review of the Part V requirements with a view to ensuring that it is delivering as intended and the bringing forward of any legislative changes deemed necessary. In this regard, the original Part V housing supply provisions of the 2000 Act have played a significant role in the delivery of social and affordable housing since their introduction. There are many people in good quality housing today as a result of the Part V mechanisms. Furthermore, Part V has been successful in delivering social integration and more sustainable mixed-tenure developments throughout the country. This was one of the positive outcomes of the original Part V arrangements. However, the economic context within which the original Part V provisions were developed in 2000 has changed, as has the mix of housing need. The capacity of Part V to deliver on its objectives is related to the level of housing construction activity. Accordingly since the downturn, and the decreased construction activity associated with it, Part V has delivered little in terms of social housing in later years. Notwithstanding this, in the context of a recovering housing market and increased housing construction activity, it is considered that the Part V mechanism, with appropriate adjustments, has the potential to again be a significant contributor to future social housing provision. From the Government's perspective, it remains proper that the gain to developers derived from the planning system should contribute towards meeting the housing needs of our citizens, including those on local authority housing lists.
Informed by an extensive public consultation process and an independent in-depth review of the Part V provisions, the Bill provides for a series of amendments to the operation of the Part V provisions, with the principal objectives of: enhancing the economic viability of developments; maximising the opportunity for the delivery of social housing units; securing the principle of integrated mixed tenure developments; and addressing weaknesses in aspects of the existing legislation identified in a number of court judgments. The proposed provisions will also be a key component of the range of delivery mechanisms that will be required to achieve the targets set out in the Government's Social Housing Strategy 2020 - Support, Supply and Reform. My Department estimates that in the region of 4,000 additional social housing units will be delivered by 2020 using the new Part V provisions, which will be a significant contribution to the ambitious social housing targets set out in the strategy. On enactment of the Bill, the new Part V arrangements can also be retrospectively applied to existing planning permissions where works have not commenced. In the operation of these revised Part V arrangements, the priority will be to secure social housing units on-site. The current practice of developers making cash payments in lieu of social housing is to be discontinued.
I will now outline the key changes to Part V in more detail. Section 31 of the Bill amends section 94 of the 2000 Act by requiring a planning authority to consult with the approved housing bodies in its functional area in the preparation of its housing strategy and to have regard to relevant housing policies of the Government or any Minister. The provision also halves, to 10% from 20%, the percentage of land that must be provided for social and affordable housing in a housing development. The general scheme of the Bill, as published some months ago, proposed that the existing statutory provisions relating to affordable housing be removed from the Statute Book. However, after further consideration, in particular of the contributions made during scrutiny by the Oireachtas Joint Committee on the Environment, Culture and the Gaeltacht of the general scheme, the Government is now proposing that the existing statutory provisions relating to affordable housing be retained in the Planning and Development Act, as amended. This means that when the current acute need for social housing has been met, it may be possible to reintroduce the affordability aspect into the Part V arrangements when required.
The Part V provision has up to now been perceived as introducing an inefficient process which caused difficulties for developers and local authorities alike. Under the existing arrangements, any Part V agreements are required to be reached within an eight-week period. In practice, that was rarely achieved. Accordingly, section 33(1)(a) of the Bill will now require a Part V agreement to be reached between the developer and local authority prior to the commencement of works on a development. This will be complemented by changes to be made to the planning regulations that will require a detailed Part V proposal to be included in an application for planning permission for applicable housing developments in order for the application to be valid. This particular measure will have the effect of front-loading negotiations in regard to Part V arrangements, thereby maximising the preplanning consultation phase and ultimately ensuring all parties are clear on expectations of them at the outset.
Sections 33 and 34 of the Bill amend the options contained in section 96 of the 2000 Act with a view to maximising the provision of completed social housing units by a developer. The transfer of land to a local authority for the provision of social housing will remain the default option, as is currently the case. However, the option of making a cash payment to a local authority in lieu of social housing is being removed, as is the option of providing sites or land elsewhere. The transfer of completed social housing units off-site, on other lands, will be allowed in specific circumstances, such as where there is insufficient social housing demand at the location of the proposed development and there is greater need at another location. Provision is also being made for the Part V obligation to be fulfilled by developers through long-term leasing of properties and rental accommodation availability agreements.
The matter of providing local authorities with the power to enter into long-term leasing arrangements as part of Part V arrangements was the subject of much debate during the Dáil's consideration of the Bill. It is important to note that local authorities already have this authority and have delivered a substantial volume of social housing in this way. In general terms, local authorities require flexible options for the delivery of social housing and an ability to respond to local contexts. Leasing arrangements provide that type of flexibility. Equally, this flexibility must be balanced with the need to ensure as many permanent units for social housing as possible are achieved with the financial resources available. In order to achieve this balance, it is my intention to issue a ministerial policy directive to local authorities instructing that, where capital funding is available, they should enter Part V agreements for the acquisition of social housing units rather than enter into leasing arrangements. Furthermore, where leases are being agreed, they should be for a specified minimum period. This will ensure the potential of Part V to deliver completed social housing units into the ownership and social housing stock of local authorities is maximised.
The complexity and ambiguity of some of the wording within the original Act has resulted in several significant court cases. Accordingly, a number of technical amendments are being provided for in the Bill to take account of court judgments and practical difficulties reported in the operation of Part V. These include the provision of greater clarity on the meaning of terms such as "attributable costs" and "equivalent monetary value". These amendments are intended to improve the Part V negotiation process for all parties.
Section 36 amends section 97 of the original Act to provide that the social and affordable housing obligations on developers shall in future apply only in respect of developments consisting of ten or more houses. Currently, developers are exempted from the Part V obligations in respect of developments comprising four or fewer houses.
The final Part of the Bill, Part 6, contains just one section, section 37, which was introduced by way of a Government amendment. This section provides a necessary, technical amendment to section 31 of the Housing (Miscellaneous Provisions) Act 2009, which relates to local authority rent schemes and charges. The amendment confirms that section 31 applies to dwellings that are the subject of financial support under the new housing assistance payment, HAP, scheme, as well as to dwellings owned by a housing authority and dwellings leased or contracted by a housing authority, including rental accommodation scheme dwellings.
I think Senators will agree that this Bill contains a number of fundamental, important and necessary revisions to the Planning Act 2000, all emanating from the Government's Construction 2020 strategy and all aimed at increasing housing supply. The amendments to the Part V provisions and those providing for reduced development contributions will, in particular, help in reducing costs for developers and remove disincentives to construction, thereby making developments more economically viable and helping to increase housing supply. The performance of the construction sector, which is a major employer, is central to Ireland's economic recovery and well-being and the measures in the Bill should assist in stimulating jobs in the construction sector, as well as in the manufacturing, retail and professional sectors that it supports. The other main measure proposed in the Bill, the vacant site levy, has a positive objective to incentivise the development of vacant, underutilised lands for housing and for regeneration, with a view to breathing life back into designated urban areas and addressing urban decay. I consider that all of the measures proposed in this Bill - the Part V revisions, reduced development contributions and the vacant site levy - are socially and economically desirable and in the overall common good in terms of increasing housing supply. Accordingly, I commend the Bill to the House.