Urgent improvements needed to Vacant Site Levy to release more land for housing

January 2, 2017

The Social Democrats have called for an immediate response from the Government to close off loop-holes in the Vacant Site Levy so that hundreds more sites can be released for housing.

It has been reported this morning that 385 sites may be deemed eligible by Dublin City Council for this levy. However, hundreds more have been deemed exempt from the levy because they currently don’t meet the criteria set down in legislation (The Urban Regeneration and Housing Act, 2015).

Reacting to this news, Róisín Shortall TD of the Social Democrats said:

“There is an urgent need to close off loopholes in the legislation so that all vacant sites which can accommodate housing are included.

High land prices are at the heart of why house prices and renting are so unaffordable in our country.  If applied correctly, the levy will be a very important way of discouraging land hoarding and cooling land prices – but under current laws, hundreds if not thousands of sites are exempt.”

According to The Social Democrats, there are four key improvements the Government should be making to the levy:

  • Firstly, the commencement date should be brought forward. The whole process for the introduction of the levy has been far too slow.  The target date for full commencement of the levy on1st January 2019 completely lacks ambition, and critically fails to recognise the scale and immediacy of the housing crisis. We can’t afford to wait another two years. The Government should change legislation to allow for full commencement of the levy on January 1st 2018, not 2019.
  • Secondly, the Government could bring far more sites into play by allowing the levy to be applied to smaller sites. Some City and Town Centre sites that could accommodate housing will be exempt from the levy because under legislation, the levy can’t be applied to sites under 0.05 hectares in area. Given that a vast amount of vacant sites are likely to be small, applying such a high threshold excludes a large number of potential sites. Already we have seen that 174 such sites have been excluded for this reason alone by Dublin City Council.
  • Thirdly, the Government should close off the loop-hole in the current legislation that allows certain land to be exempt from the levy – land where the site value is exceeded by the loan value.
  • And finally, the rate of the levy should be increased the longer sites remain vacant. We could well see a situation where the rate of the levy (3%) is less than inflation in land prices – which would provide no incentive at all for land-owners to release the land for housing.

“The housing crisis is the most urgent problem the country faces. It’s going to get worse in 2017 unless the Government gets its act together and targets both supply and demand measures without any delays. Those on housing lists, the homeless, renters, people looking to buy cannot spend yet another year waiting for comprehensive action to making housing available and affordable” concluded Shortall.