Wednesday 21 February 2018

State in trawl for foreign cash to fund new homes

Move away from one- and two-bed builds to increase the stock of larger homes near city

The Government is seeking foreign investment to build badly needed family homes
The Government is seeking foreign investment to build badly needed family homes

Fionnan Sheenan and Paul Melia

THE Government is seeking foreign investors to build badly needed family-home developments in the capital to ease chronic shortages.

To remove the bottleneck, the Coalition wants to move away from the building of 'shoebox' apartments, particularly in Dublin, towards family housing.

Aside from regular semi-detached houses, there is also a push for large three- and four-bedroom family-sized apartments.

The average size of a three-bed semi-detached house is about 110 square metres, but there are very few affordable apartments of this size.

The planning system will also be made less restrictive in an effort to get the construction industry moving -- with a focus on the length of time for an appeal to An Bord Pleanala.

The lack of supply of new housing for families in Dublin is creating a bubble in the market, with the demand pushing up prices dramatically.

The Coalition also believes the level of activity in the construction sector is too low given the demands for accommodation in the market.

Government officials met for the second time last week with economists and experts on the property market in Government Buildings to discuss what is required.

The Coalition will publish a special plan for the construction industry in February.

A general outline of the plan will be referenced in the Government's economic strategy, to be unveiled next week.

The problem of builders not being able to access finance to carry out viable building projects will be resolved by bringing in international investors and banks.

"It's an equity problem. You still have lots of developers and builders who have no equity after the crash," a government source told the Sunday Independent.

Up to now, foreign investors have tended to concentrate on the commercial property market, usually buying out finished projects.

But the Government will now seek to direct foreign investment towards the residential property market in cases where the Irish banks will not provide the funds.

The Coalition plans to work with Nama and the banks to link up developers with funding from domestic or international banks and investors.

Three departments -- the Taoiseach's, Finance and Environment -- are working on the overall plan.

A mapping exercise is being conducted to identify sites across Dublin where there is planning permission already or where zoned land is not being developed.

"Where there is planning permission, it's not what the market wants anymore, in terms of one- and two-bedroom apartments. What the market wants now is three- and four-bedroom family units -- and that means both apartments and houses," a government source said.

In cases where a developer has prime sites available but is not in a position to build, a receiver will be appointed to sell to someone who will carry out the development.

Any blockages in the planning system causing a delay will also be scrutinised.

The Taoiseach's office has been receiving a lot of complaints about delays in getting a decision from An Bord Pleanala. But there is some debate over whether this is actually a factor as the number of appeals are so low.

The Government's plan will also look at infrastructure and facilities in place around the capital. In Dublin's Docklands alone, €200m is needed for investment in water and waste water facilities.

The development levies being charged by cash-strapped local authorities is another factor.

At the moment, auctioneers are reporting enormous demand by couples and families seeking to buy houses in the second-hand market.

The lack of new houses coming into the market is merely stoking that demand.

However, there's enough land for 132,166 houses in Dublin with 2,575 hectares zoned and serviced, meaning it's in the county and city development plans of the four councils -- Dublin City, Fingal, South Dublin and Dun Laoghaire-Rathdown -- classed as suitable for housing, and with the essential services including water, roads and electricity in place.

In Dublin City Council's area alone, there is actually enough land for 51,845 homes -- 433 hectares.

In the Docklands, the North Lotts area already has permission for 3,000 housing units. On the outskirts of Dublin there are a number of strategic development zones which already have planning permission in place.

The key with these zones is they set out the units allowed under the scheme. But they don't specify the types and, crucially, they don't allow an An Bord Pleanala appeal.

What the schemes allow is for developers to come back with proposals on the house and apartment types, which can be approved by the local authority.

Irish Independent

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