What we can expect from the Land Development Agency 

Unresolved contradictions

Not too many people would trade places with our beleaguered Minister for Housing this week, we suspect. He and staff of his department are fighting storms, both real and metaphorical, on all fronts.

His most recent announcement, the Land Development Agency was marred by lack of detail and pushed-out target delivery dates. Conor Skehan, writing in the Sunday Independent at the weekend described it best as being “full of unresolved contradictions… It contains some very smart ideas and high ambitions, as well as a few getting-in-its-own-way bloopers”.

Of course, ‘getting-in-its-own-way’ is an unintended consequence of most State-sponsored, market interference .

So, what exactly is the Land Development Agency? 

The LDA is a €1.25 billion funded agency  – €20 million initially – tasked with building 150,000 homes over the next 20 years. At the launch, Minister Eoghan Murphy announced that the agency is ready to deliver an initial pipeline of State-owned land capable of delivering at least 10,000 homes. It is a requirement that all lands developed must have 30% affordable housing and 10% social housing. Unfortunately, we are still no clearer about what ‘affordable’ translates into, however, the minister  indicated that affordability involves a person paying no more than one-third of their income on mortgage repayments.

The Irish Times has dedicated several inches to commentary and analysis since the launch and one particular report suggested that new homes provided through the LDA and classified as affordable could cost €320,000 in Dublin, Cork and Galway under current market prices.

One of the initial projects to be undertaken by the LDA is the development of the Central Mental Hospital in Dundrum. The land there is now up for grabs by home builders and this will be a good litmus test for the agency, given the prime residential location of the site, close to the Green Luas line and within walking distance of some of the best State and fee-paying schools in the country. It was previously suggested that this site could host in excess of 1,500 homes, although that figure will likely change if/when the current draft planning guidelines go through without significant change (by the way, these are still open for public comment/submission for another few days).

How it is likely to work?

There appears to be three distinct methods (so far) of constructing houses on State-owned lands. The first is direct development by the LDA, which is likely on smaller projects (up to 250 homes).The second is a type of licence agreement, which will effectively allow home builders to deliver housing under strict criteria. This would be suitable for small to medium-sized projects. The larger projects, like the Dundrum site mentioned above, will likely be undertaken as a joint venture between the State and larger developers/home builders.

Other sites in Dublin that have been identified for immediate development include the old Meath Hospital and sites in Balbriggan and Skerries. Sites in Naas, Cork, Galway and Mullingar also appear on the initial project list with the potential to host more than 3,000 new homes. With additional locations expected to be announced in October, it is certainly worth contacting the LDA for further details, if interested.

Ian Lawlor
086 3625482

Director / Business Development
Lotus Investment Group