Private Members Bill – Derelict and Vacant Sites Bill 2017
The Derelict and Vacant Sites Bill 2017 proposes to amend three existing Acts, the Derelict Sites Act 1990, the Urban Regeneration and Housing Act 2015, as well as the Planning and Development (Housing) and Residential Tenancies Act 2016.
Although I understand that the intention of this Bill is to address the current deficit of vacant sites and to incentivise developers to provide more much needed housing, I believe that there are a number of pitfalls within this Bill.
The principal changes to the 3 Acts can be summarised as follows:
- to increase the levies applicable on derelict and vacant sites from 3% of site market value to 5% ,
- to extend the area for application of the vacant site levy to all vacant sites irrespective of size (a minimum size threshold of 0.05 hectares currently applies),
- to bring forward the commencement of the vacant site levy provisions, and
- to provide that Part 4 private rental tenancies may not be terminated on the grounds that the dwelling is a buy-to-let property and the landlord intends to sell it.
With regard to the proposed amendments to the Derelict Sites Act 1990 and the Urban Regeneration and Housing Act 2016, any proposed measures impacting on private property owners require detailed consideration and scrutiny.
The amendments suggested in this Bill run counter to the legal advices received during the development of the vacant site levy provisions, thereby increasing the risk of Constitutional challenge and being found to be unconstitutional, while also undermining the existing statutory provisions.
Furthermore, the Urban Regeneration and Housing Act 2015 produced provisions for vacant site levy. However, this process was extremely complex.
These complexities were a result of the constitutionally protected rights of property owners arising from the proposal, which accordingly required the provisions to be appropriately balanced and fair, and also that they be reasonable and proportionate having regard to the objectives which the legislation sought to achieve.
During the development of the provisions for a vacant site levy the Attorney General specifically advised that:
- the levy should be limited in its financial amount and the size of the properties to which it could be applied,
- the rate of levy should not exceed the 3% rate applicable to derelict sites since 1990 on the basis that it was considered reasonable without being over-punitive,
- the higher the rate of levy applied, the greater the risk that it would be subject to legal challenge and held to be disproportionate, and
- sufficient time should be allowed before the coming into operation of the levy to enable affected property owners to regularise their affairs – i.e. by way of selling their properties or initiating development of their sites – before becoming liable to the levy.
Therefore this Bill, in instances such as increasing the applicable rates and size of properties, goes against the learned advice and guidance of the Attorney General.
With regard to the proposed amendments to the Residential Tenancies Act 2004, the recently published Strategy for the Rental Sector sets out a range of measures under the headings of Security, Supply, Standards and Services aimed at addressing issues affecting the supply, cost and accessibility of private rental accommodation.
The subsequent Planning and Residential Tenancies Act 2016 enacted just prior to Christmas gives legislative underpinning to certain of the measures in the Rental Strategy i.e. including;
- the introduction of rent pressure zones to slow the rise in rents in areas of the country where rents are already high and are rising,
- the extension of duration of tenancies from 4 to 6 years, and
- the limiting of landlords rights to terminate 10 or more tenancies at the same time in a single development on the grounds of sale (known as the Tyrellstown amendment).
It is my understanding that the security of tenure proposals, which the Private Members Bill seeks to address, were fully debated during the passage of the recent Planning and Residential Tenancies Act 2016 before Christmas.
Having been the subject of amendments put forward during the progression of the Planning and Residential Tenancies Bill, the proposals are adequately addressed in the consequent Act.
Therefore, it could be considered that any legislative changes at this early stage after its enactment – apart from presenting potential legal challenges in terms of the need to maintain an appropriate balance between the legal rights and responsibilities of landlords and tenants – may risk undermining stability and confidence in the rental sector and thereby negatively impacting on existing and future supply of rental accommodation.
Having spoken on a similar issue myself a few weeks ago I do understand the incentive behind such a Bill. It is clear that there is a housing issue here in Ireland and I can understand the motivation to push land owners to develop on their properties.
As Bills, such as the recent Urban Regeneration and Housing Act 2015, have been significantly scrutinised and analysed by our legislative system in their planning and enactments, I would suggest that we look at other jurisdictions and how they are tackling similar issues.
As I mentioned previously in this House, Vancouver City Council recently approved a tax on empty homes. This move had a similar incentive behind it, to free up empty properties and make them available to potential residents.
The tax, which is the first of its kind in Canada, has been introduced to combat their own housing crisis and is expected improve Vancouver’s rental vacancy rate by persuading owners of thousands of empty apartments and houses to put them up for rent.
Such initiatives are something that I think should be monitored and if successful potentially introduced here also in order to tackle our own housing issues.
Although I understand the incentives behind this Bill, we must take into consideration the various pitfalls it exhibits as it proposes to amend considerably complex legislation which, in some cases, has already been analysed and scrutinised by our legislative system.