Vacant site levy to come into force next year

Land-hoarding developers will be hit with charges for failing to bring their vacant sites into use under planning laws to come into force next year.

Local authorities will have the power to impose an annual levy of 3 per cent of the market value of the land if its owner does not take steps to develop the site under a new planning Bill to be published in the coming weeks.

The Bill will also enable local authorities to implement a “use it or lose it” policy in relation to planning permission, and to cut the cost of development contributions to encourage developers to start work.

The new laws will also bring to an end the practice of developers “buying out” their obligation to provide social housing in new housing estates or apartment complexes. Under existing laws, builders can exchange money or land instead of setting aside up to 20 per cent of developments for social or affordable use, a provision under Part V of the Planning Act.

Dublin City Council last year sought the introduction of the vacant site levy to stop landowners from "mothballing" sites, a practice which the council said was holding back the development of the city.

Unused

The council initially identified more than 600 vacant sites . A subsequent analysis found there were 312 sites or 63 hectares of land zoned for development but left unused, sometimes for decades, in prime city centre locations.

While the levy is likely to have the greatest effect in Dublin, it will be available for use in any urban centre with a population greater than 3,000.

Once in place, local authorities will have the power to apply the charge to vacant sites in areas designated for priority development. The levies will only be imposed where landowners fail to bring forward proposals for the use of the land in line with the city or county development plan and cannot provide good reasons for refusing to bring the land into productive use.

‘Use it or lose it’

When planning permission is granted, local authorities will be allowed to introduce a “use it or lose it” clause. Planning permission generally has to be used within five years, but this new provision would require applicants for schemes of 10 houses or more to indicate their proposed development schedule. If the development is not progressed in line with the schedule, without reasonable justification, the council can modify or rescind the duration of the permission.

To encourage construction, developers who have planning permission will see reductions in the development contributions they pay to local authorities for the provision of infrastructure. Local authorities across the State reduced the contribution rate this year and the new laws will allow developers to avail of the new rate.

The Dublin housing supply taskforce recently reported that planning permission exists for more than 18,000 homes – 11,000 houses and 7,000 apartments – which remain unbuilt in the capital.

The executive manager of Dublin City Council’s planning department, Jim Keogan, said he hoped the measures would encourage developers to use the existing permissions. “There are three years worth of planning permissions waiting to be used. Levies in Dublin were reduced by 26 per cent this year, and there have been further reductions related to Irish Water. Together this means the cost of development in the city could be down by 40 per cent in the Dublin area.”