The Land Development Agency Act 2021 (the Act) was signed into law by the President on 21 July 2021. This Act gives legislative underpinning to the Land Development Agency (LDA) which was established in 2018.

The LDA has been created to coordinate public-owned land for more optimal uses where appropriate, with a focus on the provision of housing. The Act formally establishes the LDA and provides for everything from its functions and powers to its corporate structure and funding.

In this post we look at some of the main features of the Act.

PART 2: LAND DEVELOPMENT AGENCY

Part 2 of the Act details the functions of the LDA. These predominantly relate to the management and development of “relevant public land” and preparation of that land for development to facilitate the provision of housing for the public good;

The LDA is also empowered to provide certain services to local authorities, as follows:

• the preparation of masterplans and carrying out of appraisal of the development potential of sites;
• the application for development consents, permissions and other approvals in relation to sites;
• the provision of infrastructure to service sites for housing;
• the provision of housing and carrying out of ancillary works as part of wider urban development; and
• the management of cost rental housing.

Local authorities can request the LDA to provide such services in relation to the development of sites for housing and urban development that are either (i) large scale, multi-tenure or mixed-use development sites or (ii) located in a town with a population of at least 30,000.

PART 7: REGISTER AND ACQUISITION OF RELEVANT PUBLIC LAND BY AGENCY

Register of Relevant Public Land

The LDA is tasked with establishing and maintaining a register, to be known as the Register of Relevant Public Land (the Register), to record details of both land owned by the LDA and “relevant public land”.  Relevant public land is defined as all land within a town with a population of more than 10,000 which is owned by a local authority or other public bodies listed in Schedule 1 and 2 to the Act.

The Register will be available on the LDA’s website and will contain the following information:

• a description, including area and location, of the land;
• an ordnance survey map or other suitable map approved by the LDA showing the relevant public land;
• information as to whether the land is:
  • the subject of a planning application to develop 5 or more dwellings; or
  • land which has been exempted from the provisions of Part 9, which sets out the requirements for development of dwellings on relevant public land.

Information which can be requested

The LDA can request information from a relevant public body, to include:

• an analysis by the relevant public body of whether the retention of relevant public land owned by that body is necessary for the performance of its functions;
• information regarding current and previous use of the land; and
• information regarding the costs incurred by the relevant public body in using or maintaining the relevant public land and any profit or loss made by the body in that use or maintenance.

The LDA can also inspect the land, as required.

Report to Government

The LDA must report to the Government on relevant public land and on land owned by it within 12 months of the relevant provision of the Act coming into operation and every 2 years after that. The report must detail, in respect of each parcel of land:

• the objectives of the development plan and local area plan in force for the area where the land is located;
• any masterplan affecting the land;
• the potential for development of the land in conjunction with contiguous sites that also constitute relevant public land or land owned by the LDA;
• the cost of provision of infrastructure and development costs estimated by the LDA to be associated with the use to which the land may be put;
• the priority, having regard to the nature of the land, proposed to be given to its development relative to other relevant public land or land owned by the LDA and the period within which that development is proposed to take place; and
• any housing strategy for the area where the land is situated.

Right of first refusal on relevant public land

A relevant public body cannot dispose of relevant public land unless it has given notice of the proposed disposal and offered the land for sale to the LDA within the period of 12 months immediately prior to the disposal. The LDA is entitled to seek further information with regard to the proposed disposal. The LDA must decide whether to acquire or refuse to acquire the land within 8 weeks of the latter of (i) receipt of the notice of the proposed disposal or (ii) receipt of any further information requested from the public body.

Direction to acquire land

Alternatively, the Government can direct the LDA to acquire land owned by a public body, in which case it has 4 weeks to notify the relevant body that the land in question will be acquired.

Valuation

Land is to be acquired at market value. Market value is to be determined by a third party according to a process to be prescribed by the Minster for Housing. Minister O’Brien, in introducing the Bill to the Dáil, stated that “in effect this is an affordable land value which in reality will be a minimal price”.

Vesting orders

Where land is acquired in accordance with the above powers, the Minister for Housing can make a vesting order in relation to the land in question which will operate to vest the land in the LDA without any further conveyance, transfer of assignment.

Disposal of land by the Agency

The LDA can dispose of land owned by it with the consent of the Minister for Housing (having consulted with the Minister for Public Expenditure and Reform) where that land is no longer required for the purposes of the Act / the performance by the LDA of its functions. The consent of the Minster is not required where the LDA is providing housing for rent or purchase.

PART 8: COMPULSORY PURCHASE

Power to acquire land compulsorily

The LDA can compulsorily acquire land (i.e. land  owned by a party other than a “relevant public body”) if in its opinion the land is situate in an area in respect of which the applicable housing strategy identifies a need for housing and the land is necessary:

• to provide access to relevant public land or land owned by the LDA, or
• to facilitate the provision of roads, water or other services or utilities required by housing on relevant public land / land owned by the LDA.

As such, the LDA’s compulsory purchase powers are essentially site assembly powers where the development in question is anchored around a publically-owned site. Such compulsory acquisition is only possible where the LDA has first made a reasonable attempt to acquire the land by agreement.

PART 9: REQUIREMENT IN RELATION TO DEVELOPMENT OF DWELLINGS ON RELEVANT PUBLIC LAND AND FORMER RELEVANT PUBLIC LAND

Requirement to provide dwellings for cost rental / sale

Part 9 deals with the provision of affordable housing on relevant public land and former relevant public land. There will be a requirement for a proportion of housing provided on such land to be made available for affordable housing by the LDA or any other developer acquiring such land.

Where an application for planning permission is made to develop 5 or more dwellings on land which is relevant public land on the date when section 75 of the Act comes into operation, the relevant local authority (or An Bord Pleanála on appeal) can require that the applicant enter into an agreement providing for the percentage of the housing to be built and:

• designated and leased as cost rental dwellings; or
• transferred on completion to (i) the ownership of the planning authority or (ii) the ownership of eligible applicants nominated by the housing authority in accordance with a direct sales agreement within the meaning of the Affordable Housing Act 2021.

The specified percentage applicable to such agreements is:

• 80% in relation to housing to be built on land located in the area of a town with a population of 150,000 or more; and
• 50% in relation to housing to be built on any other land.

In both cases the units are to be constructed by the applicant. The agreement will also identify the units to be transferred / designated.

These provisions apply in addition to the requirements of Part V of the Planning and Development Act 2000 (as amended). The applicant must, when making its application, specify the manner in which it proposes to comply with the requirement were the planning authority to attach such a condition to the permission and, where the planning authority then goes on to grant such a permission, it must have regard to those proposals.

The specified percentage provided for in the Act is subject to change, upwards or downwards subject to a cap of 80%, by the Minister for Housing having regard to the likely future demand for cost rental dwellings and dwellings for sale in the State. The Minster has the ability to set different percentages for different geographical or administrative areas.

Exemptions

This requirement does not apply to planning applications for development consisting of the provision of houses by a body approved for the provision of housing to households assessed as being qualified for social housing support, where such houses are to be made available for letting or sale.

The Minister for Housing can also exempt public land from this requirement where the land:

• is owned by a body which the Government is satisfied is required to act in a commercial manner and the sale of which has been consented to by (i) any Government Minister that holds shares in the body and (ii) the Minister for Public Expenditure and Reform, subject to the re-investment of the proceeds of such sale by the body for the purposes of the performance of its functions;
• is referred to in Schedule 3 to the Grangegorman Development Agency Act 2005 and is owned by TUD (these are the properties previously owned by DIT); or
• is owned by a local authority that wishes to dispose of the land in order to use the proceeds of sale for the purposes of the performance of its public functions.

For further information on this topic, please contact Aoife Smyth, Knowledge Lawyer or any member of A&L Goodbody’s Real Estate team.

There are two main schemes contemplated by Part 2 of the Affordable Housing Act 2021:

• Direct sales agreements; and
• Equity share scheme.

This post will consider how each scheme is intended to operate.

Direct sales agreements

Housing authorities can enter into arrangements with an entity to provide dwellings for affordable housing such that that entity can sell units directly to eligible applicants nominated by the housing authority (removing the need for them to take the asset onto their books first).

The entities with whom the housing authority can enter into such arrangements are:

• Those with whom the housing authority has a contract for the provision of dwellings for the purposes of affordable housing;
• Approved Housing Bodies;
• The Land Development Agency;
• Public private partnerships with whom the authority has entered into an arrangement; and
• Those with whom the authority has entered into a Part V agreement

(collectively referred to in the Act as direct sales developers).

The terms of such arrangements will include:

• A requirement that the dwellings specified in the agreement be sold directly to eligible applicants nominated by the housing authority in accordance with a scheme of priority;
• The terms and conditions (including as to price) on which the dwellings are to be sold;
• A requirement that the direct sale will not be completed until the eligible applicant has entered into an affordable dwelling purchase arrangement with the housing authority;
• Terms relating to arrangements for the completion of sales, notification of sales to the housing authority etc..

Where the total amount due to the direct sales developer is less than the amount due to them under the arrangement that they have with the housing authority, the shortfall is to be made up by the housing authority. The inverse also applies, with the developer to transfer to the housing authority any profit that it makes from the direct sale over and above the amount due to the developer under its arrangements with the housing authority.

Equity share scheme

Housing authorities can also enter into arrangements with the ultimate purchaser whereby the authority makes a contribution to the acquisition of the unit (a discount from market value in the case of the sale of a dwelling provided by the housing authority, including through a Part V agreement, or a financial sum in the case of the purchase of an open market dwelling) and is then entitled to an equity share in the dwelling – this being the so-called “equity share”.

The share will be the proportion that the affordable dwelling contribution bears to the market value of the affordable dwelling on the date on which an enforceable agreement is made for its purchase by the eligible applicant. The market value for the purposes of this section will be as determined by the housing authority.

General provisions

Before making dwellings available under an affordable dwelling purchase arrangement or by way of the equity share scheme, the housing authority must notify the public of its intention to do so.

Where an applicant is married, in a civil partnership or in a relationship with someone with whom they intend to reside in the affordable dwelling, they have to apply together and not as individuals.

Applicants will only be eligible if:

• their combined financial means are within the parameters to be set down by ministerial regulation;
• they are first-time buyers; and
• they are entitled to reside in the State.

The requirement to be a first-time buyer is qualified such that it will not apply where an individual:

• previously bought with a previous partner and that relationship has now ended and they are now applying to purchase on their own or with a new partner;
• lost their prior home as a result of an insolvency or bankruptcy process; or
• previously owned a home which, due to its size, is no longer suited to the applicant’s current accommodation needs.

Housing authorities will establish schemes of priority to determine the order of priority to be applied to eligible applicants where a scheme is oversubscribed.

Equity share mechanics

A housing authority can facilitate the purchase of affordable dwellings by means of a contribution (the affordable dwelling contribution) which:

• In the case of (i) affordable dwellings made available by a housing authority for the purpose of sale to eligible applicants under affordable purchase arrangements and (ii) dwellings to which a Part V agreement applies that are being made available for sale, will be the difference between the market value of the affordable dwelling and the price paid by the by the applicant; and
• In the case of open market dwellings (i.e. dwellings for which the housing authority is providing financial assistance to eligible applicants to purchase), will be the amount of the financial assistance provided by the housing authority towards the price paid by the applicant.

Government can make regulations providing for the price to be paid by the applicant for an affordable dwelling and the amount of the contribution to be paid by the housing authority.

The housing authority will be entitled to a beneficial interest in the property (the affordable dwelling equity) which is to be the proportion that the affordable dwelling contribution bears to the market value of the property.

Terms of the arrangement

The housing authority and applicant will enter into an affordable dwelling purchase agreement which will contain certain specified details e.g. record both the affordable dwelling contribution and the affordable dwelling equity, make provision for redemption payments, set the date after which the affordable dwelling equity can be realised by the housing authority, contain covenants around maintenance of the property etc..

The owner will be prohibited from selling or charging the property without the prior written consent of the housing authority, not to be unreasonably withheld.

The affordable dwelling purchase arrangement must be registered as a burden on the title.

The housing authority can enter into priority arrangements with lenders lending to the homeowner, but only where the authority considers that such an arrangement will (a) enable the applicant to obtain a loan for the purposes of purchasing the dwelling or (b) to refinance or obtain further advances on an existing loan.

Redemption of equity share

Redemption and release of the affordable dwelling equity can take place by way of:

• The making of redemption payments by the homeowner;
• Payment by the homeowner following a sale of the dwelling (which requires the housing authority’s consent);
• Realisation of the equity following a “realisation event” e.g. default by the homeowner, bankruptcy of the homeowner, destruction of the property etc..

For further information on this topic, please contact Aoife Smyth, Knowledge Lawyer or any member of A&L Goodbody’s Real Estate team.

The Affordable Housing Act 2021 (the Act) was signed into law by the President on 21 July 2021. Commencement of the Act requires further ministerial order.

The Act is referred to by the Government as “the most comprehensive standalone affordable housing legislation in the history of the State” and does the following:

• Allows local authorities to build, acquire and make available homes at prices which are below open market levels;
• Introduces the shared equity scheme which is designed to help bridge the gap between the market value of a home in the private market and what an individual or couple can afford;
• Introduces the cost-rental letting model into Ireland; and
• Makes changes to Part V of the Planning and Development Act 2000, most importantly amending the current 10% minimum requirement for social homes and increasing this to 20% for social and affordable homes.​

The Act has yet to be published by the final version of the Bill can be found here.

For further information on this topic, please contact Aoife Smyth, Knowledge Lawyer or any member of A&L Goodbody’s Real Estate team.

The Affordable Housing Act 2021 (the Act) introduces the concept of cost rental housing to Ireland for the first time. This post looks at the relevant provisions of the Act.

What is it?

Part 3 of the Act provides for introduction of a cost rental model. Cost rental is effectively not-for-profit housing, with the rent intended to cover the cost of the construction, management and maintenance of the property.

There is no requirement for this to apply in the private sector / to private investors – they can opt in if they wish but aren’t forced to do so.

If a private developer were to opt in, certain requirements will apply e.g. :

• designation as a cost rental property gets registered as a burden on the title;
• the Minister for Housing (the Minister) can prescribe eligibility requirements in respect of prospective tenants, along with the process landlords have to follow when advertising vacant dwellings and entering into tenancies and a lottery system where applications exceed availability; and
• mandatory lease terms.

The owner / landlord has the final say on whether they proceed with letting to any given tenant, notwithstanding that that tenant is eligible under the scheme.

Term and rent

The minimum designation period as a cost rental dwelling is at least 40 years.

The “initial maximum rent” is to be calculated as the rent that would, over the 40 year designation period (referred to as the cost calculation period) amortise a sum not greater than the estimated total cost to the owner of acquiring, developing and otherwise making available and letting the dwelling. This can include the following costs:

• costs associated with making the dwelling available for rent, including any capital development or acquisition costs involved;
• financing costs, including debt finance costs, interest charges and limited equity returns;
• necessary and appropriate management costs, including letting costs;
• necessary and appropriate maintenance costs; and
• costs of maintaining a prudent contingency surplus in addition to a sinking fund created to meet project maintenance costs associated with the dwelling during the cost calculation period).

Lease terms

As noted above, under the legislation the Minister has the power to prescribe lease terms for cost rental arrangements.

In addition to that, the terms of the residential tenancies legislation will generally apply to cost rental dwellings with some exceptions e.g.:

• in the case of a Part 4 tenancy in a cost rental dwelling, a landlord cannot terminate the tenancy on certain grounds that are generally permitted in the private rental sector, including the sale of the property or its refurbishment;
• a tenant cannot assign or sub-let a cost rental tenancy;
• Part 3 of the 2004 Act (i.e. rent and rent review) won’t apply – the rent can only ever be the cost rental rent.  The rent on the date of the cost rental designation is the ‘initial maximum rent’ recorded in the designation, but the Minister will prescribe formulas for calculating rents at the beginning of new tenancies and when changing a rent during a tenancy through a rent review. These rent calculations will take account of any increase in the Harmonised Index of Consumer Prices, or an alternative index that the Minister may prescribe, during the intervening period. The rents calculated in this way are upper limits, giving landlords the option to charge lower rents as circumstances allow. Rent reviews can’t take place more than once every twelve months.

The Minister may, for the purpose of monitoring compliance with the legislation and the compilation of statistical data, perform audits of cost rental tenancies – owners will need to keep certain records and make them available for inspection on request.

For further information on this topic, please contact Aoife Smyth, Knowledge Lawyer or any member of A&L Goodbody’s Real Estate team.

The Affordable Housing Act 2021 was signed into law by the President on 21 July 2021. Commencement requires further ministerial order.

The Act is referred to by the Government as “the most comprehensive standalone affordable housing legislation in the history of the State” and does the following:

• Allows local authorities to build, acquire and make available homes at prices which are below open market levels;
• Introduces the shared equity scheme which is designed to help bridge the gap between the market value of a home in the private market and what an individual or couple can afford;
• Introduces the cost-rental letting model into Ireland; and
• Makes changes to Part V of the Planning and Development Act 2000, most importantly amending the current 10% minimum requirement for social homes and increasing this to 20% for social and affordable homes.​

The Act has yet to be published by the final version of the Bill can be found on the Oireachtas website.

For further information on this topic, please contact Aoife Smyth, Knowledge Lawyer or any member of A&L Goodbody’s Real Estate team.