12 Jan 2007

I’m curious to learn more about so called Part V of the Planning and Development Act. Architects, planners and developers are familiar with this element of the legislation but I was surprised over the Christmas break to discover that few ‘lay people’ know what it’s about.

The way it was supposed to work was that that whenever a developer lodged a planning application for four or more dwellings he/she was required to set aside at least one as a social or affordable home. There were a few ‘get out’ clauses but, essentially, it was a social engineering thing.

The provision was one of a raft of initiatives which was introduced as part of the Planning and Development Act 2000. This legislation brought in some of the most radical changes the Irish planning system had ever seen – Protected Structures (awful PC mouthful, means ‘listed building’, so let’s just drop it), Architectural Conservation Areas (shockingly abused by councils around the country), Special Development Zones, and so on, but Part V was the most radical of the lot. It was suggesting a whole new way of dealing with social housing. As an alternative to the established system of piling local authority dwellings into socially disadvantaged ghettoes, housing for the less well off would from now on sit cheek by jowl with the newly developed palaces of the middle or upper classes a bit like the way it worked in Paris two hundred years ago. 

I first heard about it at a roll-out conference for the new legislation which was addressed by the then Minister, Noel Dempsey, in Cork in 1999. Judging from the reaction around the room at the time, I think quite a few of those attending were as surprised about it as I was. During the Q+A which followed, a couple of participants lobbed a few cynical comments toward the chair and the Minister/department officials put up a game (if not very sincere) defence. After a few minutes it was clear that no one in the room really believed that this nice ‘continental’ idea was ever going to work and the discussion petered out.  

After the Bill was enacted, developers predictably found clever ways of ensuring that their projects weren’t required to comply with the fullest rigours of the Part V element of the law, preferring instead to hand over money or land to the local authority rather than take on the burden/risk of parachuting houses for low income families into the smart realms of the newly refined.

 

And so, as an acknowledgment of an already established practise, in 2002 the Government amended the original 2000 Act to put an end to the charade of having developers pretend that they actually wanted to provide social housing and would do so were it not for the fact that their sites were so particularly unsuited. Instead, developers were allowed to propose some kind of financial swaparoo right from the get go.

So, what had started off as a to-the-point social engineering tool aimed at changing the fundamental structure of Irish society had transformed into a property tax on residences in housing estates. A massive one too – 20%.

From time to time there have been newspaper reports quoting social housing advocates’ concerns that the Part V donations are not being translated quickly enough into new construction. But my question is a little different and this is where I was hoping someone out there might be able to explain.

Before Christmas, I came across some information on the web which suggested that Part V of the Planning Act is only really an issue for large urban councils. Most housing development in rural authorities is of ‘one off’ single family dwellings which isn’t required to comply with the Part V provisions. By contrast, developers have had to make considerable financial/land contributions on bigger projects in larger urban areas.  This is my question: am I right in presuming that the Part V provision of the Act constitutes a tax on the development of urban housing?

And if it is, is the following calculation more or less correct: a developer lodges a planning application for twelve houses/ apartments in Dun Laoghaire. When completed, the houses are worth €500,000. Instead of giving two houses to the local authority, the developer makes a €1m contribution. The €1m tax is (naturally) passed on to the buyers of the twelve houses so that their dwelling ends up costing €585,000. In other words, am I right in saying that Part V – that radical exercise in social engineering –is now no more than a massive property tax on first time and middle income buyers in Greater Dublin and Cork?

It might go some way to explaining why property prices are so much higher in the capitol. But I wonder if most people in Dubiln realise that they're being unfairly taxed? 

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