One-off housing imposes higher costs in a number of respects. This is not widely acknowledged, and awareness of the cost gap between servicing close-knit compared to dispersed housing needs to be raised.
The rising price of transport (due to the rising price of energy) is likely to be a leading factor – if not the dominant factor – guiding development post 2015. Again, however, there is a need to further publicise this reality to inform those making investment decisions of the cost implications of the different patterns of development.
Councils with consistently high proportions of one-off house completions require higher road maintenance budgets. Site Value Tax, which is proposed to replace stamp duty, has the potential to re-shape local democracy by creating a direct link between local revenue-raising and spending. Put simply, unless dispersed development is restrained councils will have to devote a disproportionate amount of their revenue on road maintenance, while bin collection and other council-provided services will also be more expensive.
Without measures to bring vacant houses into use – a vacancy surcharge on top of SVT, for example – a short term waste of resources will become long-term.
And without measures to strengthen villages, towns and larger urban centres, it will become increasingly difficult to provide key services at reasonable cost, ranging from postal deliveries to bin collection, and from electricity supply to school transport. All of these services are at least twice as expensive to deliver in rural areas, but are often much more expensive than this, and since 2004 well over one billion euro of costs have been incurred which could have been avoided by a more close-knit pattern of development.
Where there is no contribution to agricultural production (or other land based activity such as fishing, forestry or year-round rural tourism), councils should no longer give permission in the countryside.
Perverse tax measures which encourage the building of new houses on agricultural land, where these new homes do not contribute to agricultural production, need to be removed. Part V of the Planning Act should be reformed so that 20% of the value of land used as a house site is paid by the party that has transferred the land.
Competitiveness is intimately tied to critical mass. A failure to develop critical mass hand in hand with continued settlement dispersal are two sides of the same coin. A whole host of factors affecting competitiveness have not been reviewed in this paper – from fire and health services to truancy officers.
But based on the limited data contained here the following is clear: The longer the delay in reforming our planning and tax systems the more Ireland’s competitiveness will be damaged.