On 19 July 2016, the Minister for Housing, Planning, Community and Local Government, Simon Coveney TD, announced the action plan for housing and homelessness (the “Plan”) which contains the following five pillars:
- address homelessness
- accelerate social housing
- build more homes
- improve the rental sector
- utilise existing housing.
The Plan aims to double the level of residential construction to 25,000 homes per year and to provide 47,000 units of social housing by 2021.
We summarise in this article some of the key suggested areas of reform which will be of particular interest to clients in the development, planning, banking, insolvency and rental sectors.
Proposed legislative changes
- A fast-track planning approval procedure has been proposed for large-scale residential developments (over 100 homes), through direct applications to An Bord Pleanala. This will also apply to student accommodation complexes of 100 units or more.
- It is proposed to ensure that An Bord Pleanala prioritises the determination of all planning appeals related to large-scale housing applications within the 18-week statutory objective period.
- It is proposed to streamline the existing Part V of the Planning and Development Act 2000 process, to guarantee more housing provision. This would include (a) resources being made available to local authorities and approved housing bodies to allow them to purchase or lease newly built private dwellings; and (b) the State bearing the upfront capital cost of acquiring such units.
- It is also proposed to more effectively streamline the ‘part 8 planning process’ (Part 8 of the Planning and Development Regulations 2001–2015), whereby a planning authority can assess and approve more swiftly developments (by itself or in partnership with approved housing bodies, for example).
- It is proposed to increase the use of strategic development zone planning scheme designations in order to develop key sites.
- Additionally, it is proposed to provide for further extension of the duration of planning permissions within a specified period.
Rental sector reforms
- Legislation has been proposed that would amend the Residential Tenancies Acts to improve the efficiency of the Residential Tenancies Board, and to avoid situations whereby large numbers of residential tenants in a single development are simultaneously served with notices terminating their tenancies. The proposed measures include:
- where a landlord proposes to sell 20 or more units in a single residential development, the sale would be subject to the existing tenants remaining in situ (other than in exceptional circumstances)
- greater security of tenure for tenants by replacing the current ‘Part 4’ tenancies (four year rolling tenancies) with indefinite leases
- actions to enhance the Residential Tenancies Board’s dispute resolution process by reducing the time period for appeals, restructuring the administration process and providing for one person tribunals to deal with appeals from decisions of adjudicators (rather than the current three person tribunals).
- The Plan also proposes a new mechanism for setting and reviewing rent in line with market rents and based on current market data. This model would be similar to that used in some continental European countries.
- Legislative measures have also been suggested to protect tenants in buy-to-let properties that may be affected by a landlord’s arrears.
Mortgage arrears reforms
- Legislation has been suggested to introduce measures to:
- simplify the personal insolvency legislation to include increasing the thresholds for accessing a personal insolvency arrangement
- if permissible under the Constitution, allow the Courts to impose debt solutions recommended by the Mortgage Arrears Resolution Service
- enable repossession proceedings to be held in private, if requested by the borrower.
- The Government has promised to work with the Central Bank to ensure that the Code of Conduct on Mortgage Arrears continues to be relevant, fair and balanced.
The proposals set out in the Plan could have far reaching implications. It remains to be seen, however, whether the proposed legislation that will enable certain measures will be enacted. Further, the various measures will require ‘buy in’ from the Department of Finance as well as various other key stakeholders and it remains to be seen whether the 2017 Budget will enable the proposed changes. For instance, the proposed provision of 47,000 social housing units by 2021 is estimated by the Plan to require investment of €5.35 billion. The Plan does not set out in detail how the various measures will be implemented, the specific timeline for their implementation or how they will operate in practice; we will provide further updates to clients in due course.