The Urban Regeneration and Housing Act 2015 (the "Act"), was signed into law by the President on Tuesday 28 July 2015, and seeks to incentivise urban regeneration and address housing supply-related issues by using both "carrot and stick" to encourage activity in the construction sector. It will have significant implications for both developers and landowners.
Developers will welcome the revision of Part V arrangements on social and affordable housing and the retrospective application of reduced development contribution charges, both of which will reduce the cost of construction. However, the introduction of a vacant site levy to incentivise urban regeneration and provision of housing may be viewed as a penal measure in some circumstances.
The Act was preceded by a consultation on the General Scheme of the Planning and Development (No.1) Bill (the "General Scheme"). The new name of the legislation is indicative of the change in focus and content between the scheme as originally proposed and as now enacted. For example, the "use it or lose it" provisions proposed in the General Scheme, which would have permitted planning authorities to reduce the life of planning permissions if development did not commence within the timeframe indicated when applying for permission, have not been included in the Act.
Vacant site levy
The Act introduces a vacant site levy, which will generally be an annual charge of 3% of the market value of each site registered on a vacant sites register to be maintained by each planning authority.
Both the scope and conditions attaching to the vacant site levy under the Act are very different from those originally proposed under the General Scheme. The levy will apply to land zoned solely or primarily for residential purposes ("Residential Land") and land designated with the objective of development and renewal of areas in need of regeneration ("Regeneration Land"), regardless of who owns it. In both cases the site must exceed 0.05 hectares (excluding a home and its associated garden).
The planning authority is required to identify any such Residential Land which is vacant or idle, suitable for the provision of housing and situated in an area where there is a need for housing.
In the case of Regeneration Land, the criteria for being designated a vacant site is that the site being vacant or idle has adverse effects on existing amenities or reduces the amenity provided by existing public infrastructure and facilities in...