The waiving of development levies and a €1 billion package are “insufficient in terms of the scale” of the housing crisis, says Dr Rory Hearne.
Development fees to build the vital infrastructure needed by new properties will be waived in the short term and the costs will be paid for by the State.
The Government also has set the capital budget on housing at over €1 billion.
On Newstalk Breakfast, Maynooth University Lecturer in Social Policy and Author of the book “Gaffs” Dr Rory Hearne said that these measures will not guarantee that homes will be built, or that “homes will be any cheaper when they’re sold to home buyers.”
“I think it is insufficient to in terms of the scale of the crisis and what's needed given what had come out in terms of the scale of the budget surpluses that are available,” he said.
“I think if we’re really serious about this, we know that there are 70,000 units that have planning permission that are unbuilt.
“I think what the State needs to do is a compulsory purchase that land with those planning permissions and hire the SME builders to build on it.”
‘Cost of delivery’
Property Industry Ireland [PII] Director David Duffy said the decision was a “positive measure” that “will lower the cost of delivery.”
“It’s something that PII have looked for some time and it’s a recommendation in the recent IBEX Better Housing Better Business report,” he said.
“One of the challenges facing the sector has been visibility and the cost of delivery of which development levies are a part.
“Development levies form the cost of delivering a house, so if those come out of the cost then that feeds through.
“Viability and affordability both are kind of two sides of the same coin.”
Dr Hearne said that this was not a guarantee that state funding going to private developers would deliver more affordable housing.
“You’re pouring money into developers and hoping that they’re going to build affordable housing,” he said.
‘Public construction company’
Dr Hearne said that a public construction company would guarantee the delivery of homes.
“A public construction company would not take away from the private sector,” he said.
“It would add capacity because we have a real issue in terms of construction workers, in terms of the general construction, all the various people involved and providing public jobs like the Health Service does, like education does.”
‘Commencements’
Dr Hearne said that the number of commencements fell last year because “the market is basically unsure now as to whether it’s going to sell the units, because of rising interest rates.”
Mr Duffy said visibility is a key factor in deciding whether to commence, and the increase in input costs has affected visibility.
“If you look at those 70,000 units that have planning permission some analysis of that shows that one of the things that has delayed commencement on those is viability.
“It takes so long to get planning permission that viability can change between when you apply for planning permission and when that permission comes through.”
You can listen back to the episode here.
