Is Government policy making the housing crisis worse? Lorcan Sirr | Ronan Lyons

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20 September 2016

Minister Damien English spoke to Westmeath County Council yesterday (19th September) saying that recent Government  “…measures taken to reduce input costs have decreased the cost of building new residential units by between €20,000 and €40,000, depending on whether apartments or houses are being constructed” (see address here).  No evidence was provided and he listed savings across six headings [BRegs commentary]:

  • Reduced development contributions (Government has set aside €200m for infrastructure);
  • The vacant site levy; (Not in force yet)
  • Part V; (This is causing delays in some areas see here)
  • Reduced Apartment Standards; (No evidence to support claimed savings see here)
  • Financing under Activate Capital; (Limited progress so far see here)
  • Planning and Strategic Development Zones (This has yet to happen & will only apply to small no. of sites)

However, housing experts take a different view.  Two recent articles suggest Department of Housing, Planning, Community and Local Government (DHPCLG) reforms aimed at the planning system and innapropriate pro-cyclical first time buyer incentives will not address regulatory, cost and supply problems at the heart of the housing crisis.

There are no reforms aimed at tackling the regulatory burden and red-tape additional costs to housing delivery.

In “Eroding planning powers leaves us at the mercy of the marketSunday Times 18 September 2016, Lorcan Sirr explores the ‘anecdotal’ basis for recent DHPCLG ‘initiatives’ as a contributory factor in the housing supply crisis. Inappropriate minimum apartment standards, a mis-directed review of An Bord Pleanala along with further removal of public input into planning process by diverting larger residential applications directly to the Bord all come under fire.

Sirr suggests “The time and money could have been better spent reviewing the continued self-certification of building, and introducing better consumer protection for buyers of new houses and apartments.” See full article Here.

In “The pitfalls of wooing the first-time buyer” 18 September 2016, Ronan Lyons analyses proposed budgetary measures aimed at stimulating the ‘first-time buyers” market for new homes. Lyons has previously been critical of high construction costs in Ireland and in particular cost of our ineffective system of ‘self-certification’ Building Control which is adding over €25,000 to the cost of a typical apartment (see here).

Lyons says “If building homes is too expensive relative to the real economy, then those costs need to be lowered. A tax rebate takes the pressure off the development community to find ways of building the same quality for less money. The burden of proof is on those in favour”. See full article Here.

It appears that the Department are ignoring areas which could deliver significant construction cost savings on the one hand, for example reform of our defective self-certification system of Building Control, while re-introducing pro-cyclical measures aimed at private developers that will cause price inflation and re-ignite the destructive boom-bust cycle all over again.

Other posts of interest:

Address by Minister of State English to Westmeath County Council – DAMIEN ENGLISH T.D.

FACTCHECK 4 | Dáil + Construction Costs | BRegsForum

ALERT | “Part V, Planning and BCAR” | BRegsForum

Is apartment building viable in Dublin in 2016? | BRegsForum

Departmental Funding: 19 Jul 2016: Written answers (KildareStreet.com)

BCAR “is estimated to add about €25,000 to the cost of each home” | Ronan Lyons | BRegsForum

Ministers Kelly & Coffey back CIF objections to better building standards

Building regulations are in a terrible state, but I have a solution | Dr. Lorcan Sirr

Environment department doesn’t have a clue on housing | Dr. Lorcan Sirr

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