Developers engaged in "land hoarding" could be forced to sell up under Dublin City Council plans to rid the capital of vacant sites.
The council is seeking Government sanction to impose a levy on vacant sites in the city to “encourage” developers to bring their land back into use.
Development firms who fail to pay the levy could be forced into liquidation, with lands sold to pay what they owe.
The council has in recent days made a pre-budget submission seeking enabling legislation to impose the levy on sites which have been left unused, sometimes for decades, in prime city centre locations.
The council has the power to impose a tax on sites with derelict structures on them, and does so at a rate of 3 per cent of the market value. It also charges rates on empty commercial buildings, with owners paying half the commercial rate. However, owners of vacant sites are not subject to any tax or charge.
Land banks
In its submission the council makes the case that the lack of any disincentive to putting a "lock" on land banks was damaging to the city and national economy, with companies unwilling to locate in areas with a preponderance of vacant land.
Lord Mayor of Dublin Oisín Quinn said keeping prime sites out of use was depriving Dublin of the ability to grow.
“Vacant sites have a terrible visual impact and put people off investing in an area, but the bigger cost is that land in the city centre is a scarce resource and if you have people holding on to land that could be developed you are depriving the city of the potential to grow in a sustainable fashion.”
The boom and bust worsened the situation he said, with sites amassed for extensive development never used.
“In the core of the city there are sites people held on to during the boom, perhaps they were hoping the market would just keep rising. What we don’t want is people who sunk money into sites during the boom holding on for another four or five years.”
The council has not specified a rate in its submission, but Mr Quinn said it could be up to 10 per cent of the value of the site. If the levy is not paid the council can force the company owning the land into liquidation, he said.
“If you don’t pay your levy you get served a 21 day demand . . . If that debt is not paid we put in a petition to wind up the company and put in a liquidator.”
The liquidator will then put the site on the market.
Exemptions to owners Seeking the levy is not a revenue-raising exercise, said Mr Quinn. The council wants to bring the land into use and would be prepared to offer exemptions to owners willing to make sites available for a park or playground, until they could be suitably developed.
While vacant lands are a problem they also present a competitive opportunity with few other European cities having so many prime city centre sites still undeveloped.
“We want to create a dynamic where people either put up or sell up. We can’t have people clinging on by their finger tips hoping the market will recover.”
The council's submission was prepared by a taskforce headed by Mr Quinn and included Danny McCoy of IBEC, David Begg of Ictu, the ESRI and several academics and business organisations.
David Brennan, chief executive of the Dublin City Business Association, described hoarding land as a "national disgrace".
“It’s enormously depressing. This type of penalty was first recommended more than 30 years ago, but I’d like to think it will be acted on now by Michael Noonan,” he said.
