Opinion

Sunday 20 May 2018

Building tall - are policymakers mixing up supply and demand?

One of the basic insights of economics is that, if you want housing to be affordable, building expensive homes helps - as long as it is in sufficient quantity. Stock Image
One of the basic insights of economics is that, if you want housing to be affordable, building expensive homes helps - as long as it is in sufficient quantity. Stock Image

The Ronan Lyons Column

Last week, the Department of Housing released three different reports on the cost of building on the same day. The viability of construction is, arguably, the single biggest policy challenge facing the country right now - given just how severe the housing shortage has become.

Therefore, the information 'dump' at least shows that the subject has been the focus of policymakers' attention. Nonetheless, there are some peculiar findings in those three reports. One - the questionable claim that building here is not expensive - was the subject of last week's column.

Today, though, I'd like to focus on another claim in these reports, one contained in the report 'Review of Delivery Costs and Viability for Affordable Residential Developments'. Its executive summary states that building six storeys, or higher, is more expensive, "contrary to common understanding".

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