Thursday 15 November 2018

'Land Development Agency will do little for housing crisis before 2023' - developer

Developer Michael O’Flynn
Developer Michael O’Flynn
Ralph Riegel

Ralph Riegel

A LEADING developer has warned that while the Government's new Land Development Agency (LDA) was a very good idea it will do little or nothing to tackle Ireland's housing crisis before 2023.

Michael O'Flynn, chief executive of the O'Flynn Group, said Ireland still needs to address over the immediate short term the cost of land and the lack of housing supply.

By 2020, Ireland's housing supply is expected to reach 27,000 units per annum - against a soaring demand of 35,000 units plus.

"Land is too expensive and getting land to the market at affordable prices is a problem," the Cork builder said.

"The big issue around housing is supply and we need to focus on how to resolve the supply issue."

Mr O'Flynn was keynote speaker at the 'Housing Affordability and Supply' conference in Cork organised by PJ O'Driscoll & Sons.

He warned that while the LDA is a very good idea with laudable goals, it will only work in the medium-to-long-term.

"While I welcome the LDA objectives, I have some serious concerns around the implementation plans."

"Neither the vacant land tax nor the LDA will do anything to deliver a solution to the housing problem within the next five years," he warned.

"The proposed Government solutions are looking at solutions for the five to ten year period but they are not tackling the solutions required over the next five years."

Mr O'Flynn warned that Ireland, the construction sector and the housing market needed supply solutions over the short term as well.

The LDA is the Government's primary response to tackling the medium and long-term causes of the housing crisis.

Backed by €1.25 billion, the LDA has a target of building 150,000 homes over the next 20 years.

It will be the primary weapon used by the State to use under-utilised or vacant land banks.

However, it will operate with a mix of public and private land.

Taoiseach Leo Varadkar argued this was essential to maintain long-term stability within the housing sector.

In its initial operations, the LDA will use land owned by State departments and agencies and fast-track such landbanks to the market to ensure rapid house building.

The LDA has a primary target of delivering 40pc of the land housing potential via a mix of 10pc social housing and 30pc affordable housing.

The Government has hailed the LDA as arguably the most significant development for the housing market for half a century.

“This is not about setting up an agency for the sake of it, this is solving a real problem. The Land Development Agency, with capital of €1.25bn behind it, is a step-change in the Government’s involvement in the housing market," Mr Varadkar said.

“We know we are playing catch-up after our housing sector was destroyed."

He argued that an agency like the LDA was half a century overdue.

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