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Thursday 27 April 2017

IDA chief: 'Housing crisis isn't hurting our Brexit bid'

IDA CEO Martin Shanahan asserted that delivery of housing is a key factor in securing FDI. Photo: Mark Condren
IDA CEO Martin Shanahan asserted that delivery of housing is a key factor in securing FDI. Photo: Mark Condren

Donal Buckley and Ronald Quinlan

The impact of the housing crisis on the drive to attract foreign direct investment into Ireland and into Dublin, particularly in the wake of Brexit, is the subject of increasing concern among developers involved in the delivery of new office space.

The issue took centre stage last Friday at the annual conference of the Society of Chartered Surveyors Ireland (SCSI) at Carton House in Kildare.

IDA chief executive Martin Shanahan prompted the debate, referring to the "availability of quality and affordable residential accommodation" as "a key competitiveness factor for FDI" in his address.

He said: "The availability of competitively priced 'ready to rent or buy' housing stock, across multiple ranges, is a strategic priority for FDI decision-makers. IDA has to be able to demonstrate that housing solutions will be available in the timeframe that they are required, particularly in the context of Brexit."

Mr Shanahan's assertion elsewhere in his speech that the delivery of residential accommodation "is clearly a priority for Government", was met with a tepid response from the audience, as were his statements in relation to the "progress" being made with increasing numbers of housing completions and planning permissions in 2016.

The concerns of many of those in attendance were expressed by Hibernia Reit CEO, Kevin Nowlan. He called on the IDA chief to ensure Government ministers did more to address the ongoing shortage of residential accommodation.

While the Hibernia CEO's appeal was met with a strong round of applause, Mr Shanahan insisted that "Ireland has not lost out on any FDI due to the shortage of residential accommodation".

Speaking to the Irish Independent after the conference, CBRE Head of Research Marie Hunt reinforced the concerns of those in attendance, however, saying that the housing shortage was now being used by other European cities "to spin against Dublin".

"In the competition to attract post-Brexit jobs, the key European cities are all spinning against one another and these shortages are being used against Ireland," she said.

As the deficit in the supply of residential accommodation deepens, however, other experts are noting how developers who have been forging ahead with new office developments have been slower to build residential units that would accommodate the people working in those offices.

Current limitations on the height and density of residential accommodation in key locations such as the Dublin docklands are being cited as by developers as major obstacles to progressing such developments.

Indeed, in a submission sent last Friday to Housing Minister Simon Coveney's department as part of consultations for the National Planning Framework 2040, developer Johnny Ronan's RGRE called for an increase in both heights and densities in the Dublin docklands. RGRE described the current limits in the area as "very conservative" and "directly contrary to all objectives for the sustainable development of housing in the Dublin region".

Elsewhere in its submission, RGRE called for a reduction in VAT on residential developments in city-centre locations for a period of up to three years in an effort to stimulate development in inner urban areas of Dublin.

"The stimulation of urban infill residential development through a VAT reduction incentive would have the medium-term effect of increasing supply in the areas of the country under the greatest pressure and housing need in a highly sustainable manner while counteracting outward sprawl and meeting housing needs," RGRE said.

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