Damien English (Meath West, Fine Gael) | Oireachtas source

I thank Deputy Wallace for the opportunity afforded to me to speak tonight about the vacant site levy in response to his Private Members' Bill entitled the Urban Regeneration and Housing (Amendment) Bill 2018, which proposes a number of significant amendments to the 2015 Urban Regeneration and Housing Act which first introduced the levy measure.

While I may not agree with every aspect of the Bill in terms of the key points of concern, which I will touch on later, I believe the Deputy will find broad agreement across the House on the intention behind his Bill, which I gather is to tackle land hoarding and ensure that land is brought forward for housing and other developments. The concept of having a levy and trying to utilise land is something all Members agree with and want to achieve. The job we had in trying to achieve that objective in the 2015 Bill was to find something in the Constitution that would create a balance, could make a difference and would force people to use land. I accept that as the years have passed, we need to increase the levy and that is what we are trying to do.

The Bill contains some proposed amendments to the existing levy provisions, which the Government is already progressing through a range of legislative reforms. I take the opportunity this evening to update the House on these reforms and progress with implementing the levy.

As many Members will know, the primary objective of the vacant site levy is to act as a mechanism to incentivise the development of vacant or underutilised sites in urban areas for both the provision of housing and the development and renewal of land. This is with a view to facilitating the most efficient use of such land and sites and enabling them to be brought into beneficial use rather than allowing them to remain dormant and undeveloped. In this respect, the Government shares the overall objectives of Deputy Wallace and we want the levy to be an effective mechanism for activating key sites for development and to be responsive to changing economic circumstances.

In this context, I will first highlight how the Government is already addressing some of the key provisions of the Bill before us. As Deputies will be aware, the Planning and Development (Amendment) Bill 2016, which, among other things, will provide for the establishment of an office of the planning regulator, is currently progressing through both Houses of the Oireachtas and is due back in this Chamber either on Thursday night or Friday to introduce amendments brought in during its passage through the Seanad. A number of Government amendments relating to the vacant site levy provisions, which were developed in consultation with and on foot of legal advice from the Office of the Attorney General, were tabled on Report Stage in the Seanad. Collectively, these amendments aim to further strengthen the levy provisions by increasing the rate of levy from 3% to 7% for sites on the register for the year 2019, as announced in budget 2018. This will ensure the levy is more aligned with the increase in house price inflation in recent years and, therefore, has a more meaningful impact and is more effective in bringing forward sites for housing development.

It is agreed that 7% will make a fair impact. It was a figure that others in the House had suggested. I am conscious Deputy Wallace wants to increase the levy to 25% but there was a view that 7% would make an impact and force people to utilise land. That is what we are trying to legislate for in the Bill that will come before the House on Friday, which will remove the possibility of applying reduced or zero rates of the levy for sites on the register that are subject to a site loan, taking account of the economic recovery and recent increases in land and property values since the enactment of the 2015 Act. I am conscious that Deputy Wallace has agreed with that and regards it as common sense. We are probably on the same page in that regard. The Government Bill further clarifies the definition of "vacant and idle", with reference to vacant sites on residential land, to include sites that are not being used primarily for the purpose for which they have been zoned, that is, for the provision of housing, and where the land was purchased after it was zoned residential, irrespective of when it was purchased. It provides that the Minister may, by regulations, vary the levy rate within the upper threshold of 7% to ensure the rate can be varied promptly to respond to property price fluctuations, along with enhancing the Minister's general regulating powers to further facilitate the consistent implementation of the levy.

In addition, with a view to further addressing the broader issue of land hoarding, a number of other amendments have been made to the Government Bill during its passage through the Oireachtas. I am conscious that Bill has been dragging on for the past two years in these Houses and that people have invested considerable effort in the legislation during that time. The key amendments in this respect are to provisions relating to the extension of duration of planning permission, which would permit such an extension only where substantial works are carried out during the initial duration of the planning permission and allow for a maximum of two extensions of the duration of a permission, the combined extent of which would not exceed five years. These amendments are intended to ensure that planning permissions are activated earlier and that the development works are completed earlier. We had discussed that concept in debates on earlier planning legislation during the time of the rental sector strategy in December 2016 with a view to trying to bring forward initiatives that would deal with developers who were sitting on land and had not brought it forward.

We look forward to engaging in more detail on these amendments at the end of this week when we finish the Planning and Development (Amendment) Bill 2016 in this House, or bring it close to finishing, along with other important amendments. There are approximately 82 amendments to be discussed on Friday and next week, if necessary.

As I stated, there are some elements of this Private Members' Bill on which I must indicate serious reservations at this stage, primarily relating to legal and constitutional issues. The Urban Regeneration and Housing Act 2015 is framed in such a way as to strike the right balance between ambition, in terms of achieving the common good objective of securing the development of urban lands for housing and regeneration, and the concerns and interests of individual property owners and their constitutional rights to private property, which cannot be underplayed. Therefore, to ensure the legislation is reasonable and proportionate to the aims of the levy measure, and to protect it from risk of successful legal challenge, the levy provisions as enacted, as well as the various amendments being advanced, as I have briefly outlined, contain necessary features which set the levy at a reasonable but not excessive rate. They also provide for appropriate notice to landowners to take action before becoming liable for the levy and appeals mechanisms at various stages of the levy implementation process, in line with the concept of fair administrative procedures. I am conscious that Deputy Wallace said that the number of appeals available are too many. However, some years ago, in order to ensure the legislation was constitutionally sound, great efforts were made in the wording to make sure it would be effective, would be used and would not be subject to legal challenge that would defeat its usefulness.

In light of these principles and the previous legal advice received, there are significant concerns about the constitutionality of specific provisions of the Deputy's Bill, which propose to dramatically increase the levy from 3% to 25% of the market value of a site, remove the important and fair appeals provisions in particular circumstances, and facilitate the purchase of vacant sites deemed suitable for housing purposes from site owners for not more than 60% or 40% of their market value in specified circumstances. Taking account of previous advice, these provisions are likely to be considered to be excessive, unreasonable and in conflict with the constitutional provisions relating to individual private property rights. In effect, these proposals, if introduced, would weaken and undermine rather than strengthen the legislation and would probably be found unconstitutional by the courts. That could then have far-reaching implications for the concept of the levy and any actions arising. I do not believe that is Deputy Wallace's intention. His intentions are genuine, but we need to safeguard robust and proportionate measures against perhaps desirable but unworkable and counterproductive reforms.

I recognise that the Deputy is genuine in what he is trying to do and many who will support him are of the same belief. As a Government, we try to bring in legislation that is balanced and that would be successful if it were legally challenged.

Notwithstanding these significant concerns, in light of the fact that the Government is addressing some key elements of the Bill through the amendments outlined, we are not intending to oppose the Bill at this stage. If the Bill passes Second Stage this evening, it will have to undergo pre-legislative scrutiny and I expect that these constitutional and legal implications will require further detailed examination and likely significant amendments before it can be advanced for Committee Stage consideration. Either the Minister, Deputy Eoghan Murphy, or the Minister of State, Deputy Phelan, will address some of these other elements later in the debate. We are prepared to let the Bill go to Committee Stage and to tease out these issues. None of us has the divine right to all the information on this. We are happy to have it teased out but we do flag our concerns. They are the same concerns on which we took advice back in 2015. I was not in this role at the time but I am conscious that the then Minister, Deputy Kelly, had to go to great lengths to get a Bill that would be useful and would help all of us in our aim to make sure land is activated, especially land that is zoned residential and that is badly needed for housing purposes. The Government's legislative reforms in this area are scheduled for discussion later this week. I look forward to engaging with colleagues on them this week and next week if need be.

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