Attorney General approves proposals to reform the housing planning system

The Attorney General has approved proposals to reform the planning system in an effort to curtail the purchase of homes by institutional investors.

The plans, which have been developed by Minister for Housing Darragh O'Brien, will be brought to Cabinet on Tuesday. They include proposals to limit the bulk purchase of housing units in less dense areas, and reserve significant proportions of new developments for first-time buyers.

At least 30 per cent, and up to 50 per cent, of units are likely to be reserved for purchase by first-time buyers, although the exact level will be discussed at Cabinet this week.

It is understood that approval from the Attorney General, Paul Gallagher, for the plans came on Sunday morning, clearing the way for them to be brought to Cabinet this week.

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They also include a proposal that the portion of housing put aside for affordable purchase in new developments be increased from 10 per cent to up to 20 per cent.

This is separate to 10 per cent of homes reserved for social housing, currently envisaged by the Affordable Housing Bill.

This means that in theory up to 80 per cent of some future developments will be reserved for specific types of buyer. However, sources said there will be flexibility in how the rules are applied.

The new laws will not apply to developments that already have planning permission.

It is likely that legislation, which is currently making its way through the Oireachtas, will be amended at committee stage.

The homes that are reserved for first-time buyers would also be available to some other cohorts of people, such as those who have gone through insolvency and lost a home, or divorced people.

The new rules on density are likely to be issued via a circular to local authorities and will restrict bulk sales in less densely populated areas such as commuter belts.

The measures are likely to be brought to Cabinet next week alongside tax reforms proposed by Minister for Finance Paschal Donohoe. The Government is examining reforms to the stamp duty system in order to discourage bulk purchases.

County councils

However, flagged moves to curtail the ability of local authorities to enter into long-term leases with institutional investors are unlikely to be brought to Cabinet this week, sources said.

The use of long-term leases has been central to the ability of county councils to hit social housing targets, and in turn has provided an income stream for some funds who bulk buy or build housing projects.

Dublin City Council deputy chief executive Brendan Kenny said clarity was needed on the role of long-term leases, with the local authority negotiating some 1,700 and recently receiving approval from the Department of Housing for 150 leases in the city.

He said investment funds were important for residential developments, and without them many schemes would not happen, which in turn “would lessen the opportunities for DCC to do long-term leases”.

However, the opposition argues such leases are poor value in the long term. Eoin Ó Broin, the Sinn Féin housing spokesman, said they are bad for tenant, taxpayer and the market.

“Government should focus on building and buying real social homes, not paying way over the odds for long-term leases of properties which they do not own at the end of the lease term.”