The requirement to pay substantial development contributions, or levies, when implementing a planning permission can often be a significant deterrent to the project proceeding. The levy system was introduced in 2001 in very different economic circumstances
Recognising this, The Department of the Environment, Community and Local Government has recently published new Draft Guidelines on Development Contributions which should lead to reductions or a complete waiver of levies in some cases.
Levies should no longer be payable in most cases for the change of use of an existing building and there is also an exemption proposed for works to protected structures. This should lead to some projects proceeding which were not viable up to now.
Other key provisions of the Draft Guidelines include requirements on planning authorities to reduce development contribution rates for businesses grant-aided or supported by IDA/Enterprise Ireland or other local authority or state supported local development agencies.
The new guidelines also seek to provide for reduced rates of contributions for developments in accordance with the Government's Jobs Initiative; to charge contributions only on net additional development in cases of redevelopment projects; to include waivers for broadband provision and sustainable energy infrastructure, and to provide waivers in respect of works to protected structures.
Furthermore, the Draft Guidelines state that planning authorities are required to promote the development of areas prioritised in their core strategies in Development Plans, for example through providing for lower rates of contributions in areas prioritised for development, such as town centres.
Many of these provisions are already being implemented by planning authorities. For example, recently published draft Development Contribution Schemes by both Dublin City Council and Fingal County Council include lower rates of development contributions.
In Dublin City, the rate for commercial development is currently at €127 per square metre and this is proposed to be reduced to €93.42 per square metre, a proposed reduction of some 26.4pc. The Draft Dublin City Council Scheme also includes for reduced rates for protected structures and for change of use applications.
Whilst the spirit and the key provisions of the Draft Guidelines are welcomed, there remain a number of issues and difficulties with the operation of Development Contribution Schemes. The Irish Planning Institute has made a number of further suggestions in this respect in its submission of September 2012 on the Draft Guidelines.
It would be helpful to developers and local authorities if the guidelines set out advice on good practice in relation to offsets of contributions in circumstances where a developer provides off-site infrastructure, such as road improvements, which provide a wider benefit.
A further point is that the Draft Guidelines do not address issue of the return of contributions where the contributions have been paid and it is now clear that the development will not be completed.
Many such developments are unlikely to ever be completed and as such will have reduced or no demand for local authority infrastructure.
Additional development contributions are still required to be paid in relation to major infrastructure projects which have been suspended, and over which there is much uncertainty, such as Metro North and Dart Underground.
Furthermore, the Institute considers that contributions should be calculated based upon net (i.e. useable) floorspace rather than gross floorspace. For example, it is inappropriate to require contributions in respect of plant areas and areas of basement car parking.
The submission also suggest that the guidelines include a mechanism whereby contributions paid are ringfenced in respect of particular infrastructural projects and that contributions paid can only be used for the purpose of funding such infrastructure and not any other service provided by the local authority.
In conclusion, whilst the Draft Guidelines are a welcome recognition of current circumstances, there is scope to go further to facilitate sustainable development and job creation.
John Spain is founder of the planning consultancy John Spain & Associates and former president Irish Planning Institute