Wednesday 26 July 2017

'Use it or lose it' clause needed to deliver homes

It beggars belief that in the midst of a national housing crisis, which is particularly acute in the capital, that so few homes are being delivered.
It beggars belief that in the midst of a national housing crisis, which is particularly acute in the capital, that so few homes are being delivered.
Paul Melia

Paul Melia

The figures from the Department of Housing suggest it's time for a 'use it or lose it' clause to be included when planning permission is granted.

It beggars belief that in the midst of a national housing crisis, which is particularly acute in the capital, that so few homes are being delivered.

In the first 10 months of last year, just under 11,800 homes were built nationally. This figure is unlikely to exceed 15,000 when the final tallies are complete, at a time when a minimum of 25,000 are needed.

But while some developers have suggested the planning system is to blame for the lack of new homes coming onto the market, the official Government figures from the Department of Housing suggest there are more profound problems.

There is no planning reason why 23,746 units across 331 sites in the capital are not being built to help address rising prices, inflating rents and bringing the homeless crisis to an end. Sources suggest a lack of finance and the imposition of development levies and high building costs, particularly the imposition of VAT on new homes, is hampering delivery. This is a problem particularly prevalent in construction of apartments.

But it must be asked: did the applicants not factor in building and development costs before seeking permission, many of which were recently secured?

The figures are compiled by the Housing Supply Coordination Task Force for Dublin, the so-called Dublin Taskforce.

Published in November, they are based on activity at the end of September 2016. It is based on approved planning applications of 10 or more units, where permission has been obtained and can be implemented "immediately". This means that essential services such as roads, water and electricity are in place. There is no impediment to starting works.

Some of the biggest developers are building, or preparing to do so. Cosgrave Developments is working on 534 homes. Park Developments is building 153, and has permission for another 679. It said works began on one site at Clay Farm at Ballyogan late last year, and was at "detailed design and tender stage" for another 210 at the Notre Dames Des Missions school site at Churchtown in Dublin 14.

But not all developers are so active. Crescent Park Properties has permission for 1,569 homes across four sites. It has 29 under construction. Gannon Homes has permission for 1,291 homes across 15 sites. It is currently building 138 on three sites.

Sources insist developers are not sitting on land, waiting for prices to rise. "They're all raring to go," one said, adding that the market is demanding homes and they will sell.

But it remains the case that for a variety of reasons, many sites are lying idle.

While the Government's vacant site levy is designed to force developers to build or pay an annual penalty of 3pc of the land value, it doesn't kick in until 2019. While you cannot retrospectively impose a 'use it or lose it' clause, first mooted in 2005 but never implemented, it is something which should be considered from here on in.

The 'Rebuilding Ireland' housing plan aims to deliver an annual average of 25,000 units between 2017 and 2021. Nama has promised to deliver 20,000 homes by 2020, and a fast-track planning process for 100 or more units is due to come into force later this year.

But a lack of planning permission isn't the problem. Questions must be asked as to why developers aren't building.

Irish Independent

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