Gormley to target windfall profits of developers

DEVELOPER CONTRIBUTIONS: MINISTER FOR the Environment John Gormley has told local authority planners he intends to bring in new legislation to tap into windfall gains made by landowners and property developers.

He also said he has no problem with an escalation of developer contributions for public facilities such as schools and public transport.

Speaking after he delivered the keynote address at the Irish Planning Institute annual conference in Westport, Co Mayo, yesterday, Mr Gormley said he believed the Attorney General had found a way around constitutional difficulties with windfall taxes and such a measure now had the backing of his Cabinet colleagues.

Mr Gormley said he sympathised with the position of the president of the planning institute, Andrew Hind, that current laws facilitated the making of personal and corporate fortunes by landowners and developers, while at the same time many developments lack basic social and physical infrastructure as well as public transport.

The Minister said the link between property developers and some of the larger parties has been alluded to on many occasions, but he added that there was a consensus building around the need for developers to contribute more. "We have to think of the common good," he maintained.

"We are all agreed that the integration of schools, community facilities, employment, transport and amenities with the housing development process in a timely, cost-effective and sustainable manner is essential," he remarked.

Mr Gormley said the aim of his legislation would be to secure a greater share of those profits to fund schools and metro systems. But he told the planners the State needed to further improve the scale, pattern and location of development, especially with regard to newly-zoned lands.

He said of late this had occurred around the gateways, hubs, county towns and other urban centres earmarked in the National Spatial Strategy. It led, he said, to unco-ordinated development and expensive servicing and environmental costs. "I am examining policy and legislative measures necessary to support achieving the consistency I refer to," he remarked.

Mr Hind said the State and local authorities had to produce vast sums of money to remedy problems caused by shoddy development while landowners and developers appear immersed in colossal one-off windfall profits.

He called for an urgent revision of the system of contributions which developers and landowners have to pay: "To cope with our growing population, developers should be required to pay more towards the cost of providing schools, public water and sewage facilities, roads and footpaths and public transport infrastructure," he said.

Mr Hind said the Town and Regional Planning Act 1934 - the country's first planning legislation - included provisions that allowed local authorities to demand that those whose land and property benefited from the provision of new public infrastructure should pay 75 per cent of the value added to their land or property, back to the authority within one year of being asked.

"The problem we face today is that in most local authorities the revenue arising from development contributions is nothing like enough to pay for the level of infrastructure spending required in the area. In many ways the problem is a simple one: developers and landowners are not paying a large enough share of the cost of properly servicing their development with social as well as physical infrastructure," Mr Hind said.

© 2008 The Irish Times

This article appears in the print edition of the Irish Times