A proposed new law to compulsorily purchase land for housing at agricultural value plus 25pc would create a two-tier land market, Minister for State, Malcolm Noonan, warned last week.
The Green Party Minister was responding to a new bill tabled by the Labour Party, which would enact key elements of the controversial Kenny Report commissioned by the Government in the 1970s to reform the State’s housing policy.
The bill would give local authorities the power to do a compulsory purchase of land at its existing use value plus a 25pc gratuity.
Labour Leader Alan Kelly said the legislation would immediately end the ability of land hoarders and speculators to make enormous profits at the expense of first-time buyers and would effectively end ‘land hoarding’ as a practice.
“We have also seen a senior counsel’s legal opinion, which we commissioned, that this legislation is completely constitutional. I know it is completely constitutional,” Mr Kelly said. He claimed the bill would reduce the cost of a new-build, three-bedroom semi-detached house built on a greenfield site in the greater Dublin area by approximately €30,000.
While agreeing “in principle” with the aims of the bill, Minister Noonan sought for the further passage of the bill to be delayed for 12 months.
He said it was premature as a new report from the Law Reform Commission on compulsory purchase order laws is expected before the end of 2021 and because the Government will soon be tabling alternative proposals.
Among the Government’s concerns in relation to the bill is it risked the immediate creation of a two-tier land market as it would give rise to motivation to cease all land transactions in the short to medium term.
“This is due to the cliff-face nature of the provision whereby there would be no impact on lands transacted before June 3, 2021,” Minister Noonan said.
“Those transacted after that date could lose significant value by comparison to those transacted prior to June 3, 2021.
“It would serve to remove any motive for a landowner or developer to transact current development land if such a course of action were to result in a near total loss of value, as would be the case in respect of recently zoned agricultural land.”
