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Is 'Part V' a boom-time housing tax, or the answer to social housing waiting lists?

This sector of the Planning and Development requires developers to set aside a set percentage

Image: construction via Shutterstock

THE IDEA THAT every developer would set aside a percentage of each development for use as social housing was a simple one, and at the time was praised as potentially the answer to providing an amply quantity of social housing.

This is what Part V of the Planning and Development Act, introduced more than a decade ago, was, but has fallen by the wayside in recent years.

The Government last night referred to it in their Statement of Priorities, committing to reforming it.

The document outlined that it will be assessed alongside the “local authority development contributions regime, to reduce the burden on new housing development”.

This review, and threat of suspension of Part V,  has sparked fear among housing associations.

Under Part V, 20% of land zoned for residential development is set aside to meet any identified need for social and affordable housing.

This has instead been swapped out for either a contribution towards the social housing fund of the relevant local authority, or instead the houses are built on land elsewhere and do not form part of the housing estate.

Housing action groups are calling for the upcoming reform of the legislation to take a more aggressive approach, and to ensure that developers live up to requirements set by the legislation without being able to avoid it.

Industry groups warn that it is becoming a hindrance to building, and  say it can be costly.

‘Social integration’

Ned Brennan of Respond! Housing Association said that by being able to avoid including social housing as part of an estate, or by simply paying a contribution , defeats the purpose of the ‘social integration’ factor that Part V was intended to introduce.

“There were advertisements in the boom times which noted what developments were ‘Part V free’,” he told TheJournal.ie, and said that some developers still ‘feed into’ a potential fear by homeowners that their housing estate will contain social housing.

I think developers see that social integration devalues the sales of their homes, which is absolutely appalling.

“The owner of a house can easily put it up for rent, and you risk being left with noisy tenants, but with social housing, the person owns the home, and you can address any issues directly with them.”

Brennan believes a more aggressive approach is needed in the implementation of Part V.

That’s why it was a failure… all the other measures introduced were defeating the purpose.

However, industry groups warn that it is becoming a hindrance to the construction sector.

It has been branded as a ‘boom-time tax’, and some see it as a barrier at a time when construction needs to be encouraged.

“Booming”

“There was a lot to be said for it at the time when the industry was booming… but not since the significant downturn in recent years,” a spokesperson for the Construction Industry Federation (CIF) said.

He noted that it’s adding as much as €10,000 to the cost of each unit identified for social housing.

As an alternative, the CIF is suggesting a levy across all house sales, even those of second-hand homes, to contribute to a social housing fund, or to simply introduce measures which would make it more appealing for developers to build these units.

“Builders want to build, but they want to build viable projects. If they were social or affordable units, it needs to be viable from a construction point of view,” the spokesperson added, as currently they risk losing money.

Between 2002 and 2011, 5,000 social units and 10,000 affordable units were provided by Part V, according to Respond!.

Former Housing Minister Jan O’Sullivan previously stated that the “a full review of Part V of the Planning and Development Acts 2000-2013″ is taking place, resulting in the “standing down of all affordable housing schemes, including the shared ownership scheme”.

Speaking during Leaders’ Questions last month, former Minister Ruairí Quinn said that Part V “has not worked for a number of reasons”, citing a lack of expertise and stretched budgets.

He called for a ‘new and integrated’ approach to the issue.

Read: Burton’s social housing promises ‘can’t be more spin’ >

More: Is this the ‘ambitious action’ needed to fix Ireland’s social housing market? >

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Nicky Ryan

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