Added land value will be shared with the State

Land value sharing harks back to measures recommended in the 1973 Kenny report. File Picture: iStock

"To build housing, we need land," is how Housing for All puts it. The answer is land value sharing (LVS) — the State securing a proportion of the increase in the market value of land once it's been rezoned, and then reinvesting it.

The value uplift of a development site would be tracked from a point of zoning or designation, to a point of planning permission. It would operate across new residential zoning, new urban development zones (UBZ), and zoned residential development land. The new proposals are to be delivered in the last quarter of this year.

The plan harks back to the Kenny report published in 1973 by the Committee on the Price of Building Land chaired by High Court judge, Mr Justice John Kenny. 

As Housing for All outlines, any increased value in land, once rezoned, goes to landowners, who get higher prices if they sell to a developer. LVS would ensure that the additional value is shared in a fairer way with the State, and will operate in addition to the immediate increase from 10% to 20% in the value uplift going to the provision of social and affordable housing. 

Initiatives should affect land prices

This currently operates under Part V of the Planning and Development Act, by which Local Authorities can obtain up to 10% of land zoned residential at the “existing use value” at the date planning permission was granted.

The National Economic and Social Council has said landowners may fear their land becoming subject to compulsory acquisition and proposed tailoring LVS to specific sites. The Housing Finance Agency says: "Initially, land value sharing will apply when land is newly zoned for residential development."

UBZ and LVS combined "will lead to a better understanding at an earlier stage of development costs" — which should impact on the land price.

There will also be new sanctions for inactivity on currently zoned land suitable for residential development, reform of the planning system and the judicial review process, and the State land bank will provide more land to the LDA.