Sunday 23 October 2016

Home truths: Enforcing the unaffordable

Published 19/02/2016 | 02:30

State-enforced standards are there to ensure a universally acceptable minimum quality of build.
State-enforced standards are there to ensure a universally acceptable minimum quality of build.

Late last year, the Skoda Superb was voted best car in Ireland. The third generation of the Czech-made executive saloon has defeated more expensive rivals in "best car" votes held in almost all of its European markets. The result is emphatic. The Skoda, which ranges in price from €27,000 to just under €50,000, is the undisputed best all rounder. So there.

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It's obvious then that Government should step in and regulate that all car buyers be made to purchase a Skoda Superb? Right? That way we'd all be driving the best all-round vehicle? It would be better for everyone concerned, would it not?

But what if our goal is to ensure motoring in Ireland is the most energy efficient that it can be? Well another poll voted the Smart ForTwo electric two-seater convertible as the motor with the highest fuel efficiency of all - running at 107 miles per gallon.

Perhaps given the benefit to the environment, Government should forget about the Skoda and instead regulate so all acquire a two-seater Smart car runabout instead? This would help cut down on Ireland's carbon emissions and save everyone a fortune on fuel consumption. A worthy goal without doubt.

Of course that would be ridiculous.

Aspiring to energy efficiency and overall high standards in motoring is always a good thing, but not to the degree that we enforce optimum or near optimum standards. Despite the very impressive energy saving credentials of the Smart ForTwo, it's not smart for parents with three teenage kids who need to be ferried to matches at weekends.

State-enforced standards are there to ensure a universally acceptable minimum quality for all when it comes to build, safety, energy efficiency and emissions. But we don't enforce optimum standards for obvious reasons - first, because they don't suit everyone's needs and, second, because quite a few of us just can't afford them.

But enforcement of near optimum standards is now arguably an issue in the Irish housing market where, thanks to recently-improved building regulations and the additional efforts of some local authorities, we have increased standards to a level which have hiked home building costs beyond what is widely practical.

The Building Control Amendment Regulations 2013 came into effect in 2014 to improve standards. The Construction Industry Federation (CIF) stated at the time that while the new regulations would ensure the work of builders, who maintain higher standards, is recognised and rewarded, they would also add to overall construction costs.

It warned: "The total construction cost of many new buildings can now exceed the open market value of these buildings; therefore it is critically important that all other regulatory costs are reviewed so that unsustainable regulatory costs do not make construction and development unviable." Perhaps that's now coming back to bite us as evidenced by figures issued this month on house completions. It now seems Dublin experienced a substantial drop in the number of homes built last year - just 2,892 were constructed. Compared to 2014's 3,268, it means housing output in the capital has fallen by 11.5pc at a time when new homes are needed the most.

It's certainly the case that many of those 'new' schemes finished last year had already been started prior to the property crash - therefore they had been constructed under the regime prior to the new regulations introduced in 2014.

Since then, anything going in for planning permission must comply with the higher and more costly standards. This month's figures show that few enough truly 'new' home schemes have come on board since. So have we enforced standards that - as the CIF predicted - are too high to be price practical?

The next problem is local authorities appear to have the power to increase standards (and therefore prices) even more at a regional level. Dun Laoghaire Rathdown councillors voted last October to insist that all new homes constructed in the council's jurisdiction comply with extremely high "passive house" standards imported from Germany.

The construction industry says these well exceed the new standards and are therefore more expensive again. Through the Tiger years, heritage restoration compliance regulations have been ramped up - so too were standards for disabled access for buildings (family homes must all have wider halls and downstairs toilets). That was grand when we were all earning heaps of cash but, today, thanks to the recession and resulting wage cuts and freezes, additional taxes like the USC, property tax and water charges, Joe Soap's spending power has been butchered in real terms, while the cost of increasingly better homes has been surging.

So what's the point in all these enforced high standards if Joe Soap can't actually afford the resulting homes and therefore builders won't construct them?

Superbly unsmart all round.

Indo Property

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