Wednesday 26 October 2016

'Unsustainable' council levies stall house building in Dublin's most desirable area

Dun Laoghaire's housing crisis is being made worse by its own local authority, writes Ronald Quinlan

Published 06/12/2015 | 02:30

A levy of €351,774 per hectare applies to development within 1km of the Luas B1 line, imposed by Dun Laoghaire-Rathdown County Council
A levy of €351,774 per hectare applies to development within 1km of the Luas B1 line, imposed by Dun Laoghaire-Rathdown County Council

Crippling development levies of up to €60,000 per unit are proving to be a major obstacle to the construction of new houses and apartments in Dublin's most sought-after local authority area, Dun Laoghaire-Rathdown, the Sunday Independent can reveal.

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Such is the scale of the impediment, Nama's board was warned by its specialist residential delivery team in a meeting held in July of last year that the levies being imposed by local authorities - in particular by Dun Laoghaire- Rathdown County Council - "had the potential to undermine the viability of construction in certain locations".

Last Thursday, the Society of Chartered Surveyors Ireland (SCSI) appeared to confirm the seriousness of the shortage in the supply of new housing in Dublin in its latest quarterly housing monitor.

According to the SCSI, planning permissions for just 852 units distributed across 13 residential schemes were granted for the whole of Dublin in the three months to the end of November. A breakdown of the numbers shows that with just one scheme comprising 139 units, Dun Laoghaire-Rathdown registered the lowest number of planning permissions in the county when compared to the three other local authority areas of Dublin City Council (343), Fingal (199) and South Dublin County Council (171). Taken together, the planning permission figures represent a 59pc reduction on the 2,062 units for which permission was granted in the previous quarter.

In terms of the commencement of construction of new housing units in Dublin in the third quarter, building got under way on just 197 units in Dun Laoghaire, 414 units in the Dublin City Council area, 648 units in Fingal and a paltry 35 units in the South Dublin County Council area.

Commenting on the latest figures, SCSI President Andrew Nugent cited both the Central Bank's introduction of tighter mortgage lending rules and uncertainty amongst developers in relation to imminent changes to apartment standards as factors that could be deterring developers from submitting planning applications. The imposition of levies on development by local authorities is also an issue.

In the case of Dun Laoghaire-Rathdown, up to €60,000 of the price of a new house or apartment is accounted for by levies. While the standard amount payable per unit comes to €8,580 in the borough's "functional area", a supplementary contribution of €45,620.40 is applied to developments in Glenamuck and Kiltiernan to cover the provision of roads and drainage infrastructure. Elsewhere, a supplementary levy of €351,774 per hectare is payable for development within 1km of the Luas B1 line.

Mr Nugent added: "Levies of up to €60,000 are acting as a deterrent to the construction of houses in Dun Laoghaire-Rathdown. €300,000 appears to be the price that attracts house buyers into the market. To have contributions and levies of up to €60,000 on a house priced at €300,000 is unsustainable".

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