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Will the Planning Bill remove obstacles to investment? Back  
Financing property, whether by debt or equity, is very sensitive to legal, regulatory and tax conditions. The Planning and Development Bill now going through the Oireachtas is the latest change to be factored into the equation. It is aimed at reducing delays in the planning process, but will not of itself be sufficient to achieve this. So will the environment for property investment change much? Liam McCabe assesses the issues.
The Planning and Development Bill 1999 has now been passed by the Seanad. It is designed to revise and consolidate the law relating to planning and development. Two of its primary stated aims are to streamline and speed up the planning process and to provide for proper planning and sustainable development of all areas.

Will the measures in the Bill achieve these aims and what is the likelihood of their success?

Speeding-up and streamlining

There is a general perception that the planning process is peculiarly slow in dealing with applications and that the legal system provides too many avenues for objectors to challenge decisions. The Bill proposes the following changes to address this:-

• In order to appeal a decision to An Bord Pleanala, third parties will now be required to have previously submitted a written observation on the application to the Planning Authority.

• Submissions or observations on planning applications will now, for the first time, be subject to payment of a fee.

• Where Planning Authorities seek additional information they will now be required to decide the application within 4 weeks of the receipt of the information requested as opposed to the current 2 month period.

• Anyone seeking to challenge the validity of any planning decision by way of judicial review will have to demonstrate that they have a “substantial interest” in the matter. This is in addition to the previous requirement (introduced in 1993) that there must be “substantial grounds” for contending that the decision is invalid before a court challenge can proceed.

While these changes should result in a small reduction in the average time taken by planning authorities to process applications and make those decisions somewhat more difficult to challenge in the courts, they will not radically speed up the process or provide much more certainty as regards timing or finality.

The provisions contained in Part V of the Bill dealing with Social Housing (about which much has already been written), while primarily designed to secure and speed up the provision of affordable housing, are also likely to delay the provision of housing generally. These provisions have given rise to a great deal of uncertainty and it remains very unclear as to how the procedure is intended to work. It is however almost certain to be the subject of court challenges if it is enacted in its current form.

Proper planning and sustainable development

The proposals contained in the Bill which alter the way in which planning authorities conduct the planning process are much more fundamental.

• Local Area Plans (previously described as Area Action Plans) will now have express legislative standing.

• Regional planning guidelines are also given a statutory footing. These will address population trends, economic trends, infrastructural needs and environmental protection considerations on a co-ordinated and regional basis. It is hoped that these will facilitate investment by developers as well as ensuring orderly and sustainable development.

• The concept of Strategic Development Zones (SDZ’s) is introduced. The government may designate sites as SDZ’s for types of development which are of strategic importance to the national economy. Once designated, the appropriate state development agency (which include the IDA, SFADCO and others) must prepare a planning scheme for the area indicating the type, scale and design parameters of developments which will be permitted. After going through a public consultation process, the scheme will be adopted. Thereafter, planning applications for developments within the SDZ must be submitted as normal. However, no appeal to An Bord Pleanala will be allowed where the proposed development is consistent with the scheme.

• The practice of imposing financial conditions is also significantly overhauled. Planning Authorities will now be required to prepare a Development Contribution Scheme which will set out the basis of calculations relating to financial contributions and the amount of contribution to be paid by developers towards public infrastructure. No appeal will be permitted against a financial condition which accords with the Scheme. The Scheme is required to be revised every two years.

These measures are certainly welcome. They represent a statutory recognition of the reality that the planning process is becoming increasingly complex and requires a structured and co-ordinated response from government. If implemented properly, they should give increased definition and certainty to the planning process which is good news for developers and the economy generally. Planning Authorities are already under considerable pressure due to the volume of applications being received and the increasing complexity of the process. They will now have to cope with the additional burdens imposed by the requirement to process applications somewhat more quickly and to deal with the preparation and review of the plans, schemes and guidelines. There is a significant risk that without substantial additional resources being given to Planning Authorities and An Bord Pleanala, these new measures will not have the beneficial affects intended and could potentially prove counterproductive.

Effect on property investment

To the extent that the Bill will streamline and give increased definition and certainty to the planning process, it will contribute to the removal of some obstacles to investment in development. One of the biggest issues perceived to be facing government in securing the implementation of major infrastructural projects on a public private partnership basis is the planning risk and in particular the risk of very significant delay. The Bill and in particular the establishment of SDZ’s, will be of assistance in addressing this issue.

It should be recognised, however, that objectors to major infrastructural projects are generally very resourceful in their means and methods of challenge both within the strict planning process and also by availing of arguments based on environmental and constitutional law. It would be unfair to expect the Bill to remove all weapons from objectors and indeed there are very good reasons why such an imbalance should not be created in the system even to facilitate the speedy completion of major infrastructural projects.

Another way of speeding up and facilitating the completion of such projects is to ensure that when challenges are made to court that they are dealt with speedily. In this regard, the government has already indicated an intent to establish a special division of the High Court to deal with such matters with a view to “fast-tracking” planning decisions. It should be recognised, however, that the planning process is often blamed for delays which are not actually directly related to it. For example, when announcing the proposal to introduce a special division of the High Court to fast-track planning decisions, a government spokesman justified the decision by reference to a particular court challenge which he considered had excessively delayed a road widening scheme. However, the particular case in question did not actually relate to a planning decision at all.

Certainly, however, the measures contained in the Bill (assuming they are properly resourced and implemented) together with the establishment of a special division of the High Court to deal with planning and related matters should streamline the process, reduce delays and give greater certainty to investors. It is unlikely, however, that we will see the beneficial effects of this for some time.

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