Friday 15 November 2019

Homebuyers pay for social housing - O'Flynn

Michael O'Flynn
Michael O'Flynn
Philip Ryan

Philip Ryan

PROPERTY tycoon Michael O'Flynn has warned that homebuyers will be forced to bear the cost of the Government's social housing levy on development sites.

Mr O'Flynn, whose construction company had one of the largest loan books in Nama, also called for Vat on residential development to be axed to help kick-start the construction industry.

Talking exclusively to the Irish Independent, Mr O'Flynn said: "If this was a place like France, they would suspend Vat on housing until the market normalises.

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"The market hasn't normalised, and between Vat and all the tax take on a house you are talking about 40pc of the total house price take is tax - that's just unsustainable," he added.

Under new planning laws, developers will be required to give 10pc of all homes in new developments to the Government to help meet the demand for social housing.

Mr O'Flynn, who controls more than 600 acres of development land, said this would add to already prohibitive development costs, which he said would be passed on to borrowers.

"It's not the developers who pay it, in the end it's the consumer who pays for everything. And why should people who are saving hard to have their own house be charged with building social houses?" he said.

"The builder must make a margin. A lot of people, especially politicians, are mistaken in thinking that it is the builders paying for the social housing," he added.

The Cork businessman also insisted the State needed to take some responsibility for the past failings in the planning system.

"People talk about over development, but no development could take place without zoning or planning permission. So any development - be they wrong or right - involves not just developers involved or banks but there was also local authorities and State agencies. People tend to forget that," he said.

Mr O'Flynn exited from Nama last year and entered into an agreement with US equity firm Blackstone, which was seeking to control his property empire.

His company, O'Flynn Construction, is preparing for a major return to property development, but the developer said raising finance was hampering progress. He said the cost of raising money was too high, and development projects had to be highly profitable to justify financing costs.

He expects to attend a high-level meeting hosted by Finance Minister Michael Noonan in Dublin's Marker Hotel tomorrow night. Construction industry chiefs, private equity firms and Department of Finance officials will thrash out new ideas for funding development projects.

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The Residential Land Availability Survey map was created by drawing together zoning maps held by each local authority in the State.

Developed by the Department of the Environment, it sets out individual plots of land in towns, villages, cities and rural areas, and indicates the number of homes permitted on each site.

It took almost two years to develop, and provides planners and developers with an overview of the available land for housing.

It does not include land zoned for mixed-use development, which would generally include some housing provision. Nor does it include derelict sites.

The data is based on the situation as of March 31 last. Stage 1 land is considered not viable for development in the short-term because necessary services such as water are not in place. Stage 2 land has no major constraints. Not all the land has planning permission.

Irish Independent

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