Tim McNulty: A few key initiatives could make all the difference in delivering housing

'The single biggest ingredient in the cost of a home is the cost of the land. It is profoundly socially unjust that the many should enrich the few. '

One of the key initiatives needed to deliver housing in Ireland is to turbo-charge and fund the Land Development Agency.  

In the Irish Examiner on March 29, Cianan Brennan lamented the toothless condition of the LDA.  Immediately, the LDA needs to be given robust new powers to compulsorily acquire land and property from any State or semi-State body for use in development for housing. With the minimum resistance.  As the only shareholder (ie sole owner) the Government will have leverage, in different ways, to ensure that there is minimum resistance and fullest co-operation to achieve the prompt transfer of properties and lands.

The recent LDA report of their audit of lands owned by the State was useful in information terms, but quite simply unacceptable in terms of timescale for delivering results.  The LDA needs an engine, and an engine driver, and fuel in the tank.  It also needs urgent, fearless, and unapologetic political direction as to the results which they must deliver.  

The Department of Housing itself needs to be called out, for its relative failure to deliver over the past decade.  This is a department that is deeply conservative, impervious to change, and ideologically stunted. Neither energetic nor innovative, it is stultified and dull.  

Proposed changes at An Bord Pleanála are also to be welcomed, but ABP needs additional funding to clear backlogs and to do its work, urgently and efficiently.  

One of the easiest and earliest tasks for a newly empowered energised LDA would be to identify, acquire and more quickly provide State-owned sites for the location of modular homes on a very large scale.  This is a time of acute housing need and modular homes in large numbers are a vital part of the short and medium-term solution.  The LDA should immediately be tasked to do another audit, this time identifying the lands and properties owned by church and religious orders and charities.  It will be important to ascertain the true extent of their properties because they too have a role to play and a contribution to make.  

We also urgently need to see how we can re-focus and re-direct capital, resources, skills, and labour into more house-building.  We probably have quite enough offices, student accommodation, and hotels for the time being.  Tax reliefs and other incentives should be used to stimulate greater productivity in the residential sector, with home ownership being prioritised.  We also need to re-examine the long-established tax exemption for churches and charities on their sales of property.

Churches and charities

Huge prices achieved in recent times for sales in prime Dublin residential areas like Clonliffe, Rathgar, and Milltown, beg the question: why are the sale proceeds tax-exempt?  Churches and charities, and especially the religious orders, must in future pay Capital Gains Tax at 33% on all their property sales. Just like everyone else.  It might assist to indicate that tax relief would be granted against future CGT on sales, for the value of any property transferred, within a specified short timeframe, to the LDA or to an Approved Housing Body.  The powers needed for the LDA to compulsorily acquire land should also extend to their acquisition of property and land from churches and from charitable bodies - for fair value — but subject to CGT.    

If this Government, or the next, wants to make a truly real and lasting impact on the provision of housing for all future generations, there is another step that should be taken.  This big bold brave step is to dig out, dust down, update and implement the 1973 Kenny Report on the regulation of the cost of building land for housing. We are only 50 years late, but better late than never, and now is the time.

The single biggest ingredient in the cost of a home is the cost of the land. It is profoundly socially unjust that the many should enrich the few.  Aspiring homeowners should not be paying and usually borrowing, vast amounts of money because a few lucky landowners, get the benefit of a re-zoning conferred by the decisions of a public body, made in the public interest.  It is long past time to discuss whether the price of agricultural land which is enhanced by re-zoning, should thereafter be controlled and regulated for the benefit of society.

The Constitution does acknowledge that private property rights should be regulated by the principles of social justice, and can be limited by the exigencies of the common good. Quite so.

And if this needs a constitutional referendum for the purpose of regulating the price of such land, then so be it. The public interest is paramount and the people should have their say. It is long overdue. 

Tim McNulty BL is a Lecturer in Construction Law at School of Surveying & Construction Innovation Technological University Dublin.  (TU Dublin)