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The Minister for Housing, Local Government and Heritage, Darragh O’Brien TD, has today, 22 December, published the General Scheme of the Land Value Sharing and Urban Development Zones’ Bill.
The Bill, approved by Government last week, proposes that communities get a greater share of increases in land value arising from local authority planning decisions and public investment in infrastructure. It is a key part of the Government’s Housing for All Plan.
This landmark legislative proposal introduces measures that respond to long-standing issues arising from the impact of ‘hope value’ in the land market, which leads to speculation that affects the value of land and as a result, the viability of building, both of which feed into the cost of housing.
The proposed measures will address the situation whereby significant increases in land value arising from zoning and permitting development are not shared adequately with the State, and it is ultimately those purchasing or renting new homes, and new communities where the need for infrastructure and facilities is often greatest, that bear the cost.
These issues have been flagged since the Kenny Report in 1973, and more recently by others including the National Economic and Social Council (NESC), who are of the view that “Ireland must bring about a fundamental change in its system of urban development, land management and housing provision.”
Confirming approval of the General Scheme, Minister O’Brien said:
“This proposed new approach to active land management will lead to fundamental systemic changes in the way we think about land and development. In combination with other measures and in particular the residential zoned land tax, it will give rise to a seismic shift that will make a real difference to our society as a whole, through influencing the delivery of increased and more affordable housing supply and the creation of sustainable and well balanced communities for our citizens.”
“Crucially, at the heart of this proposal is the provision that the ‘uplift’ in land value will benefit communities through funding for essential infrastructure and indeed social and affordable housing where appropriate,” he concluded.
ENDS
The Bill is available here: General Scheme Land Value Sharing and Urban Development Zones Bill 2021
The Bill provides for up to 30% of the value uplift (which, when combined with Part V requirement for 20% social and affordable housing will result in up to 50% in total, thus ‘land value sharing’). The proportion is being further examined through a detailed economic appraisal of the proposed measures, which will consider the potential for a range of proportions due to the particular circumstances in different locations.
It is proposed that all or part of the contribution to be secured by condition of the planning permission may be facilitated by financial contributions, land transfer, and/or the undertaking of infrastructural works by the developer, in a manner that will fund or provide for the necessary infrastructure to support the development of sustainable communities.
Land Value Sharing will also apply to designated Urban Development Zones (UDZs), where significant potential for development including housing is identified. The legislation builds on the existing Strategic Development Zone (‘SDZ’) concept. UDZs will involve a key decision-making role for the local authority and early engagement with the local community and landowners, through a plan-led approach that must include determination of a planning and delivery scheme.
It is intended that there will be certain restrictions on development applied between the designation of a UDZ and the adoption of the planning and delivery scheme for the area, in order to ensure that premature development does not take place that might affect the proper planning of the area.
Given the need to ensure that the key pieces of infrastructure to support the comprehensive development of these strategic areas can be delivered in a timely manner, it is also proposed to introduce enhanced land assembly and acquisition powers, which may include obligations to transfer of ‘critical land’ required for infrastructure within the UDZ to the designated development agency on behalf of the State.
The General Scheme sets out the key concepts and principles and detailed drafting will be progressed on foot of a full economic appraisal and other expert advisory input and engagement with key stakeholders during 2022. This will include pre-legislative scrutiny and the development of the national register of zoned land in the second half of 2022, with a view to enactment of the legislation before the end of the Year.
It is intended that the proposed land value sharing measures will operate in conjunction with the new Residential Zoned Land Tax, which will generally apply to land zoned and serviced for housing development on 31 December 2021 and be first applicable in February 2024.