18,000 houses could be built if vacant sites developed

18,000 houses could be built if vacant sites developed
Local councils under pressure not to hoard land. Picture: Getty

Local authorities are coming under increasing pressure to crackdown on land hoarding.

The Department of Housing, Planning and Local Government has warned urban councils, in particular, that it is necessary to implement the vacant site levy, a fine worth 7% of the value of unused land.

The department has issued a circular to councils seeking an update on the implementation of the vacant site levy. It is the second time the department has sought an update in just seven months.

The latest circular is looking for an update on the implementation of the charge as of May 31 and comes in the wake of a government report which shows just four councils collected payments for vacant sites last year -  Kilkenny, Waterford City and County, Wicklow and Dublin City.

The report, from the Oireachtas' Parliamentary Budget Office (PBO), showed payments of €2.3 million were outstanding at the end of 2019. Just €882,000 had been collected.

Some eight councils did not even have an active vacant sites register at the end of 2019.

The levy was introduced to prevent land owners hoarding land which could be used for housing. Councils reported approximately 18,000 housing units could be built if all sites on the register were developed in full.

In 2018, landowners were subject to fines of 3% of the value of land on the register. This rose to 7% in 2019. Concerns were raised in the PBO report that this fine of 7% is not high enough as property price inflation has averaged 8.5% since 2015.

In the circular, the department said: "Given that the provisions have now been in operation over three years, it is considered reasonable to expect that planning authorities would have made necessary progress in implementing the levy provisions at this stage."

It notes that "it is particularly important that it (the levy) is proactively administered in large urban areas" to encourage the construction of housing in cities and large towns.

A spokesperson for the Department of Housing, Planning and Local Government said it is "proactively engaging with local authorities" to ensure the levy "achieves its full potential in terms of bringing concerned sites into productive use".

The primary objective of the levy is to act as a mechanism to incentivise the development of vacant and underutilised sites in urban areas for both the provision of housing and the development and renewal of land, thereby facilitating the most efficient use of such land and sites and enabling them to be brought into beneficial use rather than allowing them to remain dormant and undeveloped.

A circular was issued in November 2019 seeking a progress report as of the end of October.

The 31 councils reported a combined 359 sites on local authority registers. Sites valued at a total of €144.5 million were liable to the levy at a rate of 3%. This would have resulted in an approximate payment of fines totalling €4.3 million. The levy has now increased to 7%.

In addition, the department confirmed that since the introduction of the levy, more than 200 sites have been removed from registers due to a variety of reasons, including the commencement of development on sites, sites being sold and appeals to An Bord Pleanála.

Some 50 sites have been removed due to development commencing, and planning applications have been submitted in relation to 71 sites. Planning has been granted in 47 of these cases to date and if this planning is activated and construction starts, these sites will be removed from the registers too.

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