Temperatures continue to rise over the Government's recent planning Bill compelling developers to include an element of social housing in future developments. Critics say that to commandeer private property for any reason is unfair, others argue it is downright unconstitutional. With hindsight, it is acknowledged that city councils in particular were unwise to sell off land to private developers over the past decade.
The new Planning and Development Bill is to be introduced in the Senate before Christmas. Up to this point, says a Government spokesman, the Department will take on board any proposals from various interest groups. While the Minister is committed to the concept of social housing, "nothing is cast in stone" as yet.
The same formula is already used in a number of other countries. In the UK, new housing development has included a percentage of social housing for almost a decade. Each borough council decides on its requirements, based on the affordable housing needs in their area. This can range from up to 25 per cent in the Greater London area to almost zero in parts of Scotland and northern England where the Section 106 rule, under which developers have to hand over land to the council, has now greatly reduced housing waiting lists.
If the proposals by the Government on social housing are implemented, two immediate problems are expected to arise - the level of compensation to be paid to housebuilders and the very small acreage threshold after which social housing is compulsory. Developers who bought land up to the August 25th deadline will be compensated at purchase value. After this date, all planning applications for land over about half an acre must include a percentage - up to a maximum of 20 per cent - to be sold at the going market rate to the local authority for social housing. This will be based on agricultural land values when it was bought.
In the longer term, some developers fear that they will not get the full market value of new houses once part of the site is designated for social housing.
However, Irish developers like others operating in the UK, accept the Section 106 ruling as a fait accompli and work within the strictures imposed by the various borough councils. The social housing element is not based on land size but on the number of units being built on the site. This varies from council to council. There is, however, a good deal of flexibility.
"It's not a blanket thing in the UK," says Danny Durkin, chief executive of The Durkin Group, UK. "Where a development is in an area that would be inappropriate for social housing, such as Westminster, Section 106 is not imposed."
The opposite will be the case under the Irish planning Bill, says a Department spokesman. He suggests that waivers will only be permitted where there is already a large amount of social housing.
A few sites still come up for sale in the UK with pre-Section 106 planning permission and these command premium prices. In the majority of cases, there is a social housing requirement and the developer is obliged to work with a social housing partner approved by the authority. These houses are often intended for tenant-purchase and their existence does not adversely affect the value of the private housing, say developers.
With apartments allocated for local authority housing, the councils usually build an entire block on a development for this purpose. "Generally the social housing sector is slightly segregated and you often can't build the private houses until social housing is provided," says Danny Durkin.
Brian Hawkins, managing director of Abbey Developments, says there is no single way social housing is implemented in the UK. The rules, he says, are loosely termed and local authorities can decide how they want to interpret them. He is currently negotiating on one site in Essex with a requirement for 29 social houses. "Some authorities want all the social housing together and some prefer to split it up - what we end up getting is by negotiation." And, since the rules have been in existence for about 10 years, there is no compensation for developers in the UK. However it will work in this State, the Department of the Environment's Bill will continue to be opposed by developers and landowners. Interest groups, such as the Irish Home Builders Association, are looking at alternative proposals to submit to the Minister. Many have grave reservations about the low acreage threshold. Another concern is that local authorities will not build at the same pace as private developers and this could lead to partly uncompleted sites when buyers move in.
