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Planning for Housing and Residential Rental Sector
AUTHOR(S): Cara O’Hagan, Brian Doran, Peter McKeever, Sally Anne Stone, Nicola Dunleavy
PRACTICE AREA GROUP: Commercial Real Estate, Environmental, Planning and Safety, Commercial Property
As its final act before the Christmas recess, the Houses of the Oireachtas (Irish Parliament) passed legislation providing new protections for residential tenants, and amending the planning code to facilitate delivery of housing. A new mechanism for rent predictability, in areas where rents are high and rising quickly, is intended to deliver certainty for residential tenants, while allowing sufficient rental growth to ensure that investors are not deterred from entering the residential rental market.
The Planning and Development (Housing) and Residential Tenancies Act 2016 was signed into law by the President today, Friday, 23 December 2016. The Act is intended to underpin the Government’s housing strategy, one of the key priorities for the Irish Government. While some provisions take effect before Christmas, others will not come into force until the Minister for Housing, Planning, Community and Local Government makes a commencement order. Changes to the residential tenancies legislation arising from the Strategy for the Rental Sector published last week have been implemented swiftly, to minimise the opportunity for landlords to pre-empt the commencement of these tenant protections.
Protections for Tenants
The impact of rising rents on the housing crisis has been the subject of social and political debate for some time. The Government has now intervened in the private rental market to limit rental increases in areas designated as rental pressure zones to a maximum of 4% per annum for a period of up to three years.
The local authority areas of Dublin and Cork City are designated rental pressure zones by the Act. Other areas may be designated in the future if the average rent for an area is above the national average and rates of increase over a period of time exceed a specified threshold. The limits on rental increases will apply both at the start of the tenancy and to each rent review. However there are exemptions in relation to properties which are new to the rental market and upgraded properties, to encourage supply and upgrading of rental accommodation.
Additional measures to protect tenants and enhance the functioning of the private rented residential sector include:
- Extending tenants’ security of tenure under a Part 4 tenancy from four to six years in respect of new tenancies and abolishing landlords’ right during the first six months of a further Part 4 tenancy to terminate that tenancy for no stated ground;
- Where a landlord proposes to concurrently sell ten or more units within a single multi-unit development, prohibiting the landlord from terminating any of the tenancies to facilitate the sale, save in exceptional circumstances;
- Enhancing the Residential Tenancies Board’s enforcement and dispute resolution powers, including accelerated dispute resolution timeframes.
The Act introduces a new fast-track planning procedure for “strategic housing developments”. Applications will be made directly to An Bórd Pleanála, instead of the usual process of application to the local planning authority in the first instance, with a right of appeal to An Bórd Pleanála.
The new procedure requires pre-planning application consultations to take place, firstly with the local authority and then between An Bórd Pleanála, the developer and the relevant local authority. An Bórd Pleanála will subsequently be required to make a final determination within 16 weeks of receipt of the planning application. The Minister has suggested that this will potentially result in planning decisions issuing within 25 weeks of commencement of the pre-application consultation process, as against the current two-stage planning process which can, in certain circumstances, take up to 18 to 24 months from initial design stage to securing ultimate approval.
The new procedures will apply to:
- residential developments of 100 dwellings or more;
- student accommodation projects containing 200 or more bed spaces;
- development that includes 100 dwellings or more and student accommodation projects containing 200 or more bed spaces; or
- alterations of existing planning permissions to permit development as outlined above,
on land with appropriate zoning and subject to limitations on the extent of other uses.
To avoid hoarding land following speculative applications for fast-tracked planning permission, the facility to apply for extension of such planning permissions has been restricted. Where permission is granted under the fast-tracked procedure, an extension of planning permission is only available if substantial works have been carried out during the original life of the planning permission.
Where a strategic housing development is proposed within a strategic development zone (SDZ), the developer may elect to avail of either the fast-tracked planning procedure under the Act or the SDZ planning procedure.
The fast-tracked planning process will be in place until the end of 2019, with the possibility of extension by the Minister for a further two years, to coincide with the life of the Government’s action plan on housing and homelessness, Rebuilding Ireland.
Extension of Planning Permissions
The Act also contains temporary provisions to facilitate completion of developments of 20 or more houses or apartments in respect of which planning permissions are now running out. There are many examples of such permissions granted prior to the recession, in respect of which a combination of low house prices and lack of funding has stalled construction for several years.
A planning authority shall extend the duration of extant permissions for such residential developments that have already benefitted from one extension of duration, where the authority considers that a further extension is necessary to enable the development to be completed. Such extensions shall be for a maximum of five years, provided that they shall expire no later than 31 December 2021.
Extension of permissions will expedite the completion of such housing developments, by eliminating the need to apply for fresh planning permissions. In general, an application to extend the life of the permission must be made before the expiration of the existing extension period. Where the extension period expired at any time from 19 July 2016 until commencement of the relevant provision, an application must be made within six months of the commencement date.
Other provisions in the Act include:
- Streamlining and expediting existing arrangements for approval by local authorities of their own development proposals, including proposals for social housing projects and infrastructure servicing both public and private development;
- Introduction of screening arrangements for the conducting of environmental impact assessments (EIAs) for certain types of works, including emergency flood relief works. This will enable planning authorities to determine if an EIA is required for specific proposed works within a short time frame; and
- Providing for lending by the Housing Finance Agency to Institutes of Higher Education to provide low-cost finance to higher education institutes for the purpose of providing student accommodation, and to the Housing Agency for acquisition of properties for social housing nationally.