Government putting land speculation above providing homes

Government putting land speculation above providing homes
Michael Healy Rae, who became a landlord aged 19, told the Dáil that landlords are being ‘criminalised’ and ‘demonised’ in the new Residential Tenancies Bill.

Michael Healy Rae made a typically colourful contribution to a Dáil debate last Wednesday, writes Michael Clifford.

The house was discussing the new Residential Tenancies Bill, which will provide some protections for tenants.

Mr Healy Rae, who first became a landlord at the age of 19, said that landlords were being “criminalised” and “demonised” in the bill.

The language was sufficiently hysterical, exposing a bigger truth.

Any time a vested interest is having its power curtailed, the first reaction is to leap up on the cross, nail themselves in, and claim martyrdom.

The reality is that property-owners have had an exalted position in this country since the foundation of the State.

Private property is guaranteed in the Constitution, but whenever that right comes up against the competing right of the common good, there has always been only one winner.

The new tenancies bill is merely the first of many steps that will have to be taken if this country is to follow most European states, where a large cohort of the population rent for the bulk of their lives. That shift is now deemed inevitable in light of the housing and homeless crisis. Rebalancing the rights of tenants is only one of a number of moves required if any long-term solution is to be found to the current crisis.

Central to any solution will have to be an acknowledgement that housing is not an issue to be left to the whims of the market. In this respect, one of the biggest obstacles to affordable homes is the price of land. Once land is rezoned for housing — nominally in the interests of the common good — the landowner sees the value increase exponentially. The muck of agricultural land transforms overnight into the gold of housing land.

In this, the property-owner reaps massive profits on the back on the alleged common good.

Those with the power to make the property-owner an overnight millionaire many times over are local councillors, tribunes of the people. These councillors are vested with enormous power, far exceeding that of, for instance, backbench TDs or some Government members.

The lunacy of such a regime was referenced recently in a ruling by Supreme Court judge, John McMenamin.

“The existence of a planning regime which allows for potentially huge windfall profits by land rezoning, creates a risk that financially vulnerable persons, with a role in the decision-making process, will engage in corrupt activities.” The judge was ruling on an appeal by former Fine Gael councillor Fred Forsey, who had been convicted of corruption over planning matters and served four years in prison. Judge McMenamin was a dissenting voice in a five-judge ruling which granted the appeal.

We now know that the planning regime led to wholesale corruption and bad decisions. For 15 years, between 1997 and 2012, the planning tribunal parsed planning decisions and all that flowed from them. At best, many of the decisions were simply bad, a result of pressure being put on the political system by the powerful landowning lobby. At its worst, decisions were corrupt, with some councillors being bought off for relatively paltry amounts.

Despite all that was exposed, the system of rezoning land prevails, albeit with a few checks and balances.

This demonstrates a slavish devotion to the concept of land speculation, irrespective of the catastrophic effect it has had on society, as evidenced by the cost today of attempting to build affordable homes.

Over the years, there have been attempts to rein in the madness.

In 1973, following a detailed study of the planning process, High Court judge John Kenny presented a report to Cabinet.

The main recommendation was that rezoned land should be valued at the agricultural value plus 25%.

Apparently, the Kenny Report was passed around Cabinet, generated a few comments, and was then simply filed away. Garret Fitzgerald, who was a minister at the time, said years later that he couldn’t recall why the report had not been properly examined with a view to acting on it.

For the following three decades, any time the matter was raised, the stock response was that there were constitutional problems with implementing such a regime.

“Don’t hit me with the Constitution in my arms” is a common refrain from the Government when it comes to issues that might be politically difficult.

For instance, we were told for eight years until 2006 that there was a constitutional problem with implementing a regime of random breath testing for drink-driving. Then when the reaction to the slaughter on the roads grew more vocal, and the power of the publican was on the wane, the constitutional impediments suddenly disappeared.

In 2004, a study of the Kenny Report by an all-party Oireachtas committee on the Constitution concluded, on foot of a surfeit of legal advice, that there was no constitutional problem with implementing it. By 2004, bitter fruits were tumbling out of the Planning Tribunal, exposing a culture in which landowners and developers had long dictated that the common good was best served by what was in their own interests.

Yet, despite now being told that there would be no constitutional problem with an overhaul of the system of rezoning, nothing was done. Finally, in 2009, on foot of the collapse of the housing market, the Green Party managed to convince its government partner, Fianna Fáil, to take drastic action. An 80% windfall tax was imposed on rezoned land.

Then, once the show was back on the road in 2014, the Fine Gael/Labour Government dropped the windfall tax. The reasoning offered by Finance Minister Michael Noonan was that the tax had not generated any revenue.

How would it, at a time when no houses were being built? The reality was that interests such as the Construction Industry Federation had lobbied hard for the change and Mr Noonan and his colleagues knew on which side the party’s bread was buttered.

And now, in the depths of a housing and homelessness crisis, there persists a regime in which land speculation is placed above the provision of homes in a government’s priorities.

If the two main parties are to be taken seriously about their resolve to tackle the crisis, and put right the mistakes of the past, a good place to start would be placing some controls on the price of land that is rezoned for the common good. The persistence of a system of land speculation was never about the Constitution.

It was, and is, all about politics, the power of vested interests, and an ideological fidelity to the concept of the market. There is no sign yet that even at the current impasse, Fine Gael and Fianna Fáil are willing to rearrange priorities to truthfully reflect their rhetoric about solving a humanitarian crisis.

They should be held to account for that at every turn.

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