Housing Delivery – Might we finally be on the right path?
While we acknowledge the progress made in recent years, we have certainly been critical of many aspects of the Government’s performance on housing delivery and have repeatedly called for braver policymaking to address the core issue, which is lack of supply.
This week, we saw some brave and unpopular policymaking. And it might actually move the needle in terms of housing delivery.
Earlier this week the Government announced critical additional measures under the’ Housing for All’ plan to make it easier and cheaper to build and renovate homes. These measures aim to increase the pace of building and drive down building costs. They build on the momentum seen this year, with a record number of 7,349 homes commencing construction in the first three months of 2023.
Specifically, the new measures include:
- Reducing the cost of construction – Scrapping development levies required to connect new homes with roads, water, and other services, and subsidising development levies, saving up to €12,650 per home on average. This will apply for a limited time to act as an incentive.
- Increasing the pace of renovation of vacant and derelict properties: Beefing up grants to cut the cost of restoring empty homes and making it easier to apply. The Vacant Property Refurbishment Grant will increase from €30,000 to €50,000 for vacant properties and from €50,000 to €70,000 for derelict properties. It will be extended to cover houses built up to 2007, and available for properties intended for rental as well as owner-occupied.
- Government financing of the construction of affordable apartments under Cost Rental – To get work started on thousands of affordable apartments to rent, which have planning permission but which are not being progressed. The Government has agreed to commit up to €750 million via the Land Development Agency and other providers to complete 4,000 to 6,000 additional affordable apartments under the Cost Rental system.
These new measures aim to increase the number of homes built in the coming years and make it easier for young couples to own their own homes, which is what homebuilders want too. The current housing crisis – or housing emergency – benefits no one. Speaking about the measures, the Taoiseach said, “Our mission is to restore the social contract and make home ownership affordable for the majority again. We have a long way to go, but I am more confident now than ever before we are on the right path.”
In addition to the measures above, the Government has also published the Progress Report on Housing for All for the first three months of 2023. The report shows progress in several areas, including continued take-up of the First Homes Scheme, grant of planning permission for over 1,100 homes, additional capacity for An Bord Pleanála, and €41 million in capital funding approved for student accommodation. There is a strong pipeline of social and affordable housing, with over 19,000 social homes at various stages of construction and over 2,700 more affordable homes already approved for funding.
These new measures aim to alleviate the housing crisis in Ireland and make it easier and more affordable for people to own or rent homes; whether or not they go far enough is a conversation for another day…. As a finance provider to property developers and homebuilders, we welcome these measures and look forward to supporting our customers in building more homes to meet the growing demand.
Lotus Investment Group