New legislation aimed at making land available for affordable housing is arbitrary and unfair and fails to make clear why commercial developers, builders and others who have made substantial profits through house price increases are not being asked to contribute to the provision of social and affordable housing, the Supreme Court was told yesterday during a hearing to determine the constitutionality of the proposed measures.
Part 5 of the Planning and Development Bill 1999 was referred to the Supreme Court by the President, Mrs McAleese. In accordance with practice, the court engaged lawyers to argue for and against the constitutionality of the measure.
The hearing began yesterday and continues today. On Thursday, the court will engage in a similar exercise to test the constitutionality of another measure referred to it by the President - the Illegal Immigrants (Trafficking) Bill 1999.
In court yesterday, the legal team engaged to argue Part 5 of the Planning and Development Bill is unconstitutional - Mr Paul Gallagher SC, Mr James Connolly SC and Ms Nuala Butler - said it provided for the possible compulsory transfer to a planning authority of land required for social and affordable housing purposes. A planning authority is required under the proposed legislation to ensure that sufficient land is zoned for residential use to meet its housing strategy and to ensure a scarcity of such land does not occur, the court was told.
In order to meet its objectives to provide affordable housing, it is proposed a planning authority would have power to acquire up to 20 per cent of lands which had permission for housing development.
The procedure for transfer of lands to a planning authority is triggered by any future application for planning permission for housing except in cases where a person applies for permission to develop four or fewer houses or to develop housing on .2 hectares or less.
The legal team claimed there was a question mark as to whether the purpose of Part 5 - to free up land and resources from developers so to provide social and affordable housing at less cost - would in fact be achieved.
The primary effect of Part 5, it was argued, might well be to enrich developers at the expense of other landowners who in turn could end up bearing an excessive burden in meeting the State's social objectives. The discrepancies and anomalies highlighted the unfairness and arbitrariness of Part 5, it was submitted. Part 5 targeted one section of the community to the exclusion of other sections who had contributed to or benefited from the housing problem. The compensation provisions were wholly inadequate and discriminatory in their operation. No proper regard was had to the consequences for developers of the financial burden being imposed on them and no consideration appeared to be given to the possibility of alleviating the shortage of housing in other ways, such as subsidisation of rents.
Mr Gallagher said that although the proposed legislation tried to do something that was socially desirable, there was unfairness.
A feature of Part 5 was that the development process could now be used to acquire land at a significantly lower value. Counsel referred to "curious provisions" whereby compensation would be calculated.
In the case of land bought before August 25th, 1999 the compensation would be equal to the price paid for the land but, in the case of persons who inherited land before the same date, they would get compensation with reference to the value of the land on the date it was inherited.
Land held for many generations and held long prior to the introduction of planning legislation would appear to suffer the greatest penalty because any interest payable on the price paid for that land was unlikely to bring it anywhere near market value, it was argued.
A person who had put his land to good productive, agricultural use for years in accordance with State economic policy would find that the compensation paid was relatively small compared to a person who bought the land shortly before August 25th, 1999 and who applied for planning permission in the near future to develop that land.
Mr Gallagher also argued that the erection of social and affordable housing might affect the value of retained lands and yet no compensation was payable.
If a planning authority took from earlier applicants for planning permission more land than was required, then later applicants would benefit from that mistake without any compensation to the earlier persons.
It was also claimed the definition of "eligible" persons (for housing) was in general terms and there was no guidance as to what financial circumstances would disqualify somebody from being "eligible". Different planning authorities might take into account the financial circumstances in different ways and this would lead to an unevenness throughout the State in relation to deciding eligibility, it was argued.
Mr Gallagher said that a notable feature of the legislation was that the means or financial circumstances of applicants looking for planning permission appeared to play no role in deciding the amount of land to be taken.
It was perhaps curious that while the objective of the legislation was to increase the supply of affordable housing, it was persons applying for development of houses who were penalised and not people who sat on their land bank without developing it.
There was no immediate apparent reason why the burden of affordable housing should be borne by applicants for houses as opposed to commercial developments in circumstances where commercial developments benefited from zoning and from services and in many cases were far more profitable than housing developments.
It was also argued that anybody buying land who intended to develop it would, when deciding on the appropriate purchase price, have to take into account the fact that up to 20 per cent of that land could be taken from them by the planning authority at a significant undervalue based on its existing use.