Category Archives: Bregs Forum

Complaint Procedures for BC(A)R SI.9? Construction Industry Register Ireland (CIRI.ie)

Complaint_Department___

30 April 2015

Minister Alan Kelly has noted that the new building regulations have robust complaints procedures for each discipline involved, guaranteeing consumer protection that if a registered member was found to be in breach of their duties then robust disciplinary procedures would result.

Under SI.9 each key stakeholder handles complaints against their own members- Chartered Surveyors police their own SCSI register, architects police the RIAI register etc. Industry commentators consider this to be a clear conflict of interest. Others have suggested that the bar for sanctions and disqualification has been set very high deliberately, that removal from a register may be a remote possibility for members only in the event of gross misconduct.

The reality is despite numerous recent high-profile building failures there have been no sanctions against architects or surveyors for complaints in the past 6 years.

We will examine some dispute procedures in various registers in upcoming posts. In this one we will look at the Builder’s register, CIRI.

The Construction Industry Federation (CIF) operate CIRI, the new register for builders written into BC(A)R SI.9. CIRI is currently voluntary but is due to come in on a statutory footing in 2015. The CIF section dealing with complaints under the new CIRI construction register,  is here. We quote directly from the section on complaints about contractors [emphasis in bold by BRegs Blog].

Extract:

“Before making a complaint to the CIRB, the following actions are advised:

You should put your concerns in writing … You should check the terms of contract… You should raise your concerns with your appointed Designer and Assigned Certifier and ascertain if this can bring about a resolution to concerns raised…If you do not receive a satisfactory response to the concerns raised…you may contact the CIF for general advice.”

“What can the CIRI do?

…Under the provisions of the Construction Industry Register Ireland, the CIRI will offer an independent Mediation Service aimed at resolving problems and disputes between registered members and their clients…

The CIRI is not in a position to intervene in any contractual dispute between a registered member and a client or to give specific advice or assistance on any technical issue.”

Under new building regulations introduced last March, an Assigned Certifier has no rights to instruct any builders or even to enter the building site. It is difficult to see how any professional occupying this role could be in a position to resolve any disputes. The only action that an Assigned Certifier can take is threaten to withhold a Completion Cert. In many cases the Assigned Certifier is an employee or directly contracted consultant, a builder-developer could just fire the Assigned Certifier and hire someone else to sign off. Not great for the consumer.

Remarkably there is no recourse to any advisory service, complaints body or ombudsman in the new system. A building regulation dispute could become a stand-off between the builder and certifier. We wonder if the regulators, registered professionals and builders, will provide any new consumer protection?

Other posts of interest:

Opinion: Are builders + developers off the hook with BCAR?

‘Onerous’ Building Regulations must be amended – Minister Kelly

Imminent changes to SI.9 announced | Minister Alan Kelly T.D.

SI.9 causing major delays to school projects

Iaosb letter to Minister Kelly – Revoke or Revise S.I.9

RIAI Past Presidents Paper #1 | The Building Regulations and Consumer protection

S.I.9 – Where are we now? 27 October 2014

UK + Ireland | take a quick trip to Holyhead with Breg Blog…

How much would 100% independent inspections by Local Authorities cost?

€ 5 billion | The extraordinary cost of S.I.9 self-certification by 2020

5 Posts every builder must read- BC(A)R SI.9

Opinion: Are builders + developers off the hook with BCAR?

Press article: Government promotes developers over self-builders?

HomeBond | the solution to SI.9?

poverty_solutions

The following opinion piece was received from a registered professional on 26th January 2015.

There has been a lot of comment recently on the new building regulations adding hugely to the costs of building a home. Some suggest SI.9 has added over 20% extra to the cost of house building. Certainly, when the cost of using a main contractor is factored in for a self-builder the costs are indeed considerable. Others have suggested that we should embrace additional cost if the system will deliver better building. Only time will tell whether the current reinforced system of self-certification will yield consumer benefit. However, a low-cost certification system currently being developed for the speculative sector may have applications to the self-build and one-off houses. This is currently 46% of housing output according to recent DECLG figures. Any impediment to self-building needs an urgent solution.

HomeBond Pilot Certification scheme

There has been some interest in the pilot scheme announced recently by HomeBond to offer a ‘one-stop-shop’ full building certification service. The main points of the scheme are as follows:

Homebond Certification + LDI scheme:

  1. Includes foundation design at cost €250
  2. Includes Assigned Certification costs
  3. Includes Structural Defects Insurance*

This is currently being piloted on small multi-unit developments. Certificates for Building Control sign-off are provided by HomeBond’s own employees. I am not aware of details of their Professional Insurances held at this point so am unable to comment. While some commentators have concentrated on possible exclusions, I do not have details of the scheme and what is covered or excluded at present.

However there are interesting aspects to this scheme.

Many developers of speculative housing are not necessarily competent builders. They buy a site, engage professionals, borrow money and hire sub-contractors, in much the same way as self-builders, but on a larger scale. Developers would suggest that this was a cost driven model, driving down costs for consumers etc.

The HomeBond scheme is of interest to the self-build sector as it provides a low-cost version of privatised Building Control. Indeed some consider this is precisely what former Minister Hogan had in mind when he (and his Department) issued guidance on costs of the new system of between €1000 and €3000 per housing unit.

Some argue that this is a better model to an all-in professional service where the same person provides certification duties as well as architectural, planning, engineering and design services. The HomeBond separate appointment could provide peer review with the added benefit of a defects insurance at a  modest cost.

Could this scheme could provide a solution to SI.9 problems at the moment?

If the HomeBond scheme was adapted to cover once-off houses and had an additional option for design certifier services, this may be a practical solution to some unintended problems for self building and architectural technologists present:

  • Certifier Costs would be reduced: anecdotally representatives for self-builders have reported increased professional costs ranging from €6k- €30k for assigned certifier duties. An extended version of HomeBond would significantly reduce this cost.
  • Certifier availability: current advice from the Law Society to the IAOSB indicates an unwillingness of certifiers – architects in particular – to undertake self-build projects, . Availability of HomeBond for once-off owner constructed houses would significantly improve this situation. Some suggest the restrictive nature of registers of competent persons has had the effect of reducing the pool of available certifiers, and increasing costs.
  • Contractors: if the HomeBond scheme was geared towards inexperienced owner/ builders, owners would not have to use CIF registered (CIRI) builders for projects. This would reduce the bulk of SI.9 additional costs that are currently acting as a deterrent to self-builders.

Of course details of duties, cover, exclusions, professional insurances held by in-house HomeBond certifiers would need to be looked at. It is surprising that all of the mandatory sub-certification such as waste water and energy compliance can be done at this cost. However if pilot schemes are underway on BCMS validated projects at present, one can only assume all these details have been worked out to the satisfaction of the current Minister, Department and the BCMS.

An added bonus for ‘one-stop-shop’ design and assigned certification being provided separately by HomeBond would be that suitably qualified professionals currently excluded by stakeholder registers, such as Architectural Technologists, could still operate in all other areas of procurement as before, minimising impacts of SI.9 to their liveleihoods. A HomeBond solution (or something similar) could solve a number of problems.

One must assume if this scheme is appropriate for owner-developers of multiple units, it should also be suitable for owner/developers of once-off houses.

* Note: this may be more limited than Latent Defects Insurance. The Homebond policy is taken out by builder and may offer limited benefits to purchasers, see more from Beauchamp Solicitors here:.

Other posts of interest:

Homebond | Assigned Certifier + defects liability policy for €2,000?

The Latest Homebond House Building Manual: A Critique | Joseph Little Architects

Why did Phil Hogan think SI.9 would cost less than €3000 ?

Quick history of pyrite- press articles

What is Latent Defects Insurance and how much does it cost?

SI.9 costs for a typical house 

Pyrite: the spiraling cost of no Local Authority Inspections 

Inadequate Regulatory Impact Assessment for S.I.9- Look Back 2

SI9 Schedule of duties for Certifiers

Top Dozen Posts | 2014

2015
Happy New Year to all of the BRegs Blog readers. This may be a time of reflection and one way to do this may be to have a look back over the Top Dozen posts for the past year, the BRegs Blog’s first year, in terms of the highest viewing figures registered.
The most viewed post was written by a Self-Builder followed closely by a Building Surveyor contributor. Two of the top six posts were written by Architectural Technologists.
We look forward to receiving your contributions in 2015 and thanks for the support.

Developer-Led projected Sales Price for a Typical House

gchomeplansIn a previous post “House building costs are 17% more than 2003 despite recession” it was suggested that when VAT, SI.9 costs and developer’s profit is added, the sales price of a typical 125 sq.m. house is currently in the region of €300,000 excluding the site purchase costs.

Typical site values for houses in the country would suggest we are well over €350,000 when the site cost is taken into account. As the average sales price for a typical house is in the region of €250,000, this would suggest that it is still cheaper to buy than to develop.

Here is a breakdown of these figures. In an earlier post we noted an architect’s assessment of additional SI.9 costs for a typical house (see below). The following calculation was confirmed by a development finance specialist and a builder-developer as being an accurate assessment of the cost of a speculative house in a larger scheme. We note the developer suggested cost savings may be made on the administration of the new building regulations by availing of the pilot HomeBond scheme.

Here is the breakdown received:

Developer-Led projected Sales Price for a Typical House

Base build cost= €1271 x 125 = €159,000

plus 13% for professional fees (+€20.7k)*= €180,000

plus SI.9 Professional + specification Costs (+€21k)*= €201,000

plus legal, marketing, sales and other costs of 5% (+€10k)= €211,000

plus developer’s net sales profit of 20% (+€42.2k)= €253,000

plus vat @ 13.5% on sales (+€34.2k)= €287,000

plus planning levies (+€10k)= €297,000 Projected sales price

(The above cost calculation excludes site purchase costs.)

Notes:

  • Bruce Shaw cost range for new build €1000- 1250 per sq.m. (av. €1125) excluding VAT. It recommends adding in  13% for additional development costs= €1271 per sq.m. Exceptional or once-off site development or infrastructure costs may be higher.
  • For the purposes of this calculation we will assume a typical 3-4 bed house size is 125 sq.m.
  • Once-off individual sites will be higher in urban areas like Dublin, Galway or Cork.
  • The costs exclude upgrades due to increased performance (Part L etc) required to reach net carbon zero targets, and other changes to regulations.
  • The costs exclude 10% social and affordable costs [Part V] recently introduced. This will likely result in higher site costs and consequent higher sales prices.
  • The following calculation excludes site costs. Assume average site prices of between €40,000 up to €80,000 per house for larger sites excluding VAT. Profit normally would be factored onto sales price so following calculation is at lower end of estimated costs.

This cost, along with other factors such as availability of finance, may well be determining the pace of residential supply currently.

The average house sales price nationally is around €250,000. The above calculation suggests that it is still cheaper to buy than build notwithstanding recent increases, and will remain so until sales prices increase significantly (or the cost of building is lowered).

One can see that the additional cost of the new regulatory red-tape bureaucracy is €21,000 when VAT is added  (consultants fees plus specification costs). Developer’s profit is at €48,000 when vat added on to consumer. The cost in the base-build use a main contractor is in the region of €21,000 incl. VAT. So the additional costs  to a self-builder in buying a speculative built house when vat, SI.9 costs and developer’s profit is added, is in the region of €90,000. An additional 30% cost increase.

If the government adopted incentives, like in the UK co-housing initiative, to stimulate the self-build sector and reduced regulatory costs with the introduction of a low-cost independent inspector system similar to the UK, the cost of once-off housing could be significantly reduced.

*Breg Blog note: for additional SI.9 costs for a typical house see below

 Other posts of interest:

*SI.9 costs for a typical house

€ 5 billion | The extraordinary cost of S.I.9 self-certification by 2020

How much would 100% independent inspections by Local Authorities cost?

Homebond | Assigned Certifier + defects liability policy for €2,000?

SI.9 Cost for 2014 = 3 x Ballymun Regeneration Projects

Ronan Lyons | Regulations pushing up the costs of homes

CSO- Dwelling units approved down 16.6% in one year

World Bank Report 2015 | Ireland’s poor construction regulations are the biggest drag on our ranking

12,000 social + affordable houses at no cost to taxpayer?

Ghost estates and public housing: BC(A)R SI.9 | look back 6

rear-view-mirror

Ghost estates and public housing: BC(A)R SI.9 | look back 6

In this post from March 11th 2014, we explored the undue complexities that SI9 brings to many legacy projects of the celtic tiger years. Local Authorities may find out pretty soon that public housing/ghost estate projects may encounter similar problems to those that generated the SI.105 deferral for hospitals and schools. As the hoarding is up and works start on Priory Hall we wonder how remedial works that come under BC(A)R SI.9 will be completed.

BC(A)R SI.9 may add considerable costs to planned social housing completion of vacant units.

Original post below:

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Ghost estates and public housing: BC(A)R SI.9

The recent deferral SI.105 introduced on 7th march for schools and healthcare buildings appears as a result of issues relating to additional costs, unavailability of professionals as certifiers, time delays due to industry readiness and no revised form of building contract (both private and public sector versions) that incorporates new Building Control (Amendment) Regulation SI.9 of 2014. One would suspect recent robust submissions by the architect’s representative body (RIAI) to Minister Ruairi Quinn, himself an architect and well briefed on the technical complexities of the new regulation, were a factor in getting to grips with the issues earlier than others.BC(A)R SI.9 affects social housing, capital spend by Defence, Social Welfare (employment exchanges in old-fashioned words), Arts/Heritage (Arts Centres but not work to National Monuments), and OPW (State offices but not Garda stations). SI.9 and SI.105 suggests two main issues:1. The State looking out for its own interests: GCCC Form for public contracts but ignoring the fact that the private sector forms and clients are equally affected (self-builders, SME’s and other private non-residential)2. Helping only half of the State spenders (admittedly the larger half) but completely overlooking Govt agencies who have not made representations (other departments that are unaware of implications of SI.9 on annual budgets).

For other departments that may not be as well briefed the same issues may well apply. Here is a link to a recent statement by Minister Jan O’Sullivan on 10th March 2014 regarding public housing:

http://www.environ.ie/en/DevelopmentHousing/Housing/News/MainBody,36875,en.htm

Government spend on public housing  from 2010 to 2012 dropped from €969m to €384m. At an average government spend of €675m per annum (source: Forfas report table 2.12 p 16 below), and assuming 3/4 qualifies under BC(A)R SI.9 this would suggest an annual extra cost (based on official industry estimates) of SI9 to be in region of €40m (8%). This figure is for the design and assigned certifier roles only, and excludes additional costs for ancillary certifiers, increased insurance costs and defensive specifications. The latter could be as much as an additional 5% extra on top of the construction cost of a project. This could bring the additional cost figure to over €70m, a huge impact on the department’s annual budget.

Notwithstanding direct costs, the implementation problems associated with hospitals and schools may apply to public housing and indeed completion of ghost estates. Due to vague wording of the Code of Practice it would appear that personal liability for certifier roles may require individual employees to take out individual professional indemnity insurance separate to companies that they work on behalf of (possibly including employees of local authorities). This early criticism of the Code of Practice appears to remain in the final version. This may result in delays for local authority projects where certifier roles are assumed in-house, as well as outsourced projects.

Many part-completed residential projects require multiple commencement notices. Current and future remaining phases will come under the remit of SI.9 as a result. Extended planning permissions may require material alterations to comply with current revised technical guidance documents (Part L for example). As a result they may require commencement notices and trigger compliance with SI.9.

This is an issue that affects completion of ghost or incomplete housing estates. Professionals and local authorities tasked with completion of these could discover  the legally “loose and vague” language of S.I9 may incur liability for previous stages completed (e.g. drainage or structural infrastructure). Currently there is inadequate provision for exclusions on the certificates issued under SI.9. Future legal actions may well determine these certificates are guarantees for entire developments, even though certifiers may only have been part-involved for works to finish out projects.

Given the technical complexity of SI.9 and the vague liability boundaries in the Code of Practice, Local Authorities may find out pretty soon that public housing/ghost estate projects may encounter similar problems to those that generated the SI.105 deferral for hospitals and schools.

How long will it be before BC(A)R No. 3 of 2014 appears? Deferral for ghost-estates and public housing?

Link to Forfas report:

Central Bank | More turbulence in housing market?

Mortgage+agreement+app

In this article in the Independent on 11th December 2014, author Mark Keenan discusses the possible negative effects of the latest government intervention in the housing market. Readers are aware, despite increases in rental and sale values, that current market conditions including increased costs associated with recent ‘red tape’ building regulation have restricted the supply of new homes. Proposed Central Bank credit limitations could impact further and push a lot of new residential developments out of the reach of new buyers. In an industry struggling to get started this latest development, added to the drag of recent government building regulations, could seriously affect the tentative construction recovery.

Link to full article here. Extract:

Half of new homes face axe over mortgage proposals

Joe Charles, of Caledonian Life, said the fall in mortgage protection policies being taken out by those in their 20s was down to them not taking out mortgages

AROUND 5,000 new homes worth more than €1.25bn and accounting for almost half of all planned output for next year face being scrapped.

The construction industry has expressed fears over the Central Bank’s new loan-to-value (LTV) and loan-to-income (LTI) requirements. Strict new mortgage lending measures will play havoc with building at both ends – first by eliminating a huge tranche of buyers and second, by causing banks and private financiers to withdraw promised capital and finance for big schemes.

One source added: “In most cases, those schemes which have gone ahead have only just got funding by the skin of their teeth.”

The source said that if the measures went ahead “almost all” multi-unit schemes currently being planned would be postponed or curtailed altogether. Multi-unit schemes are likely to make up around half of the 10,000 or so homes planned for next year.

The claims follow the lodging of a new report warning of the unexpected impacts of the new mortgage control measures. Compiled by Grant Thornton, and funded by the Construction Industry Federation, it has been submitted to the Central Bank this week.

It lists “cessation/non commencement of construction” as one of the “unintended consequences” of the new measures.

A spokesman for the Construction Industry Federation (CIF) said: “In a lot of cases our members have said that they are planning to put residential projects on hold if these measures are introduced.”

First time buyers in Dublin will now have to save an average of €70,000 to buy a €350,000 home and most builders and their financiers believe this is too big an ask for young couples.

It has already been estimated that 40pc of the home loans paid out in 2014 would not have transacted at all under the Central Bank’s new rules.

The report estimates that saving for a deposit and paying rent for a home at the same time in Dublin means a couple will have to set by €2,575 per month.

“Across the construction sector there is likely to be a cessation in on-going construction programmes and a reduction in the numbers of commencements, as a consequence of the proposed policies.

“Such policies will both reduce the commercial viability of many projects and increase the likelihood that working capital support from institutions may not be available,” the report says.

Other effects include:

  • A knock-back to employment caused by the resulting loss of work to those directly involved in the sector as well as “knock-on” jobs like solicitors and surveyors.
  • The exclusion of “credit-worthy” candidates from home purchase on the basis that first time buyers tend to be in the early stage of their careers and the most likely to increase their incomes going forward.
  • An increase in unsecured and “risky” credit used to beat the mortgage cap – the report says it happened in Sweden when “hard LTV’s” were introduced.
  • Increasing rents, as forced-out buyers turn to letting in a market where supply is already restricted.
  • A negative impact on Foreign Direct Investment as rents increase. This will also lead to a further, increased demand for social housing.

The report describes the proposed Central Bank measures as “a blunt tool” usually employed to deal with an overheating market, whereas most of Ireland’s market (outside of Dublin) is clearly not overheating.

It is critical of some of the factors which currently cause Ireland to have some of the highest-priced housing in Europe – most notably it criticises the high cost of local authority levies and taxations to home construction.

Finally, it asserts that measures outlined for Budget 2015 are “unlikely to address the fundamental issues that are hampering supply.”

Other posts of interest:

Pyrite: the spiraling cost of no Local Authority Inspections

A ‘perfect storm’ for housing?

The € 500 million + cost of S.I.9 in 2014 | Residential Sector

SI.9 costs for a typical house

How much would 100% independent inspections by Local Authorities cost?

BCMS Commencement Notices | Nine Months On

CSO | Construction output increased by 0.1% in Q3 2014

Developer makes 27% profit in 6 months: warns against state housing.

Completion Certificates for Multi-unit Housing

Catherine Murphy TD | Today’s Housing Promises Won’t Bear Fruit for at Least Two Years

SI.9 Cost for 2014 = 3 x Ballymun Regeneration Projects

Ronan Lyons | Regulations pushing up the costs of homes

Sunday Business Post | Karl Deeter “Building regulations – rules don’t deliver results”

CSO- Dwelling units approved down 16.6% in one year

Want to live in Dublin? | Only the wealthy need apply!

World Bank Report 2015 | Ireland’s poor construction regulations are the biggest drag on our ranking

€ 5 billion | The extraordinary cost of S.I.9 self-certification by 2020

“House building costs are 17% more than 2003 despite recession” – Bruce Shaw

Ch.3_—_Ireland

Ireland, Knowledge Centre – Bruce Shaw

Professionals frequently refer to the Bruce Shaw Annual Review for information on costs, trends and the construction industry generally. In this post we look at activity in the house building sector and where savings could be targeted to make housing more affordable. Here’s  link to the full document: Bruce Shaw Knowledge Centre

This year’s edition of the Bruce Shaw Annual Review is no different providing a wealth of interesting and accurate information on a multitude of aspects of the construction industry. It is not the only one of its type but source information frequently is Central statistics Office data so is quite reliable.

We noted there has been a lot of media attention at a predicted “construction boom” with an output of €11Bn forecast for 2015. When one removes the €600m associated with water meter installation, this figure reduces to €10.4Bn. A 15% increase on 2014 projected level of €9Bn is good news; however we are coming from a historic low point in construction activity.

€10Bn is the same as the 2010 level of construction output and well below the level needed to achieve a sustainable level of construction activity in the medium term- see Forfas Report (p10):

forfas report page 10.pdf [Converted]

(Pdf of Forfas Report: Ireland’s Construction Sector: Outlook and Strategic Plan to 2015: forfas)

Construction output is half a normal sustainable level and this indicates that there may be further market distortions due to supply and demand issues in some sectors and locations etc. To give this more modest forecast some background here is a graph with recent years construction output noted:

Value of Construction Output €m 2004 – 2014

construction output

We also note construction costs for housing remain stubbornly high. In the following graph we see that house-building costs are over 17% higher than in 2003, despite the recession. The graph illustrates that house-builders appear have kept costs high, preferring to delay activity to build demand and maintain profit margins rather than reduce costs. We note a recent Davy Research report that suggested Irish construction costs were 50% higher than in Northern Ireland. Economist Ronan Lyons has been calling for a full audit of the cost of building a home for some time- this would have many benefits because state investment in social housing would go further and new homes would become more affordable. (Link to Ronan Lyons commentary here).

House Construction Cost Index

houe cost index

In this series of tables showing house completions, we see that only 11%, 922 of the total of 8,301 dwellings completed in 2013 were apartments, suggesting that individual commissioned or self-built houses comprised a very high proportion of dwellings completed that year. Self-builders may well comprise over 50% of all houses completed in any one year.

Annual House Completions 2003 – 2013

house completions

Annual House Completions by Type 2003 – 2013

completions by type

Finally of interest to Government will be house building costs. Note the specific exclusions which generally add approximately +12.5% and additional costs of SI.9, estimated at between €20,000- €40,000 for a typical 4 bed house.

The Bruce Shaw figures exclude VAT, professional fees, SI.9 costs, developer’s profit and site costs. When the extra SI.9 cost of €21k ex vat, developers profit of 20% and other costs along with VAT of 13.5% is added to the build cost, the sales price of a typical 3-4 bed 125 SqM house is over €290,000 excluding site purchase costs. This excludes the cost impact of recently introduced social and affordable (Part V) levy of 10%.

 

house build costs.pdf [Converted]*Breg Blog note: for additional SI.9 costs for a typical house see SI.9 costs for a typical house | BRegs Blog

Other posts of interest:

€ 5 billion | The extraordinary cost of S.I.9 self-certification by 2020

How much would 100% independent inspections by Local Authorities cost?

‘Onerous’ Building Regulations must be amended – Minister Kelly

SI.9 Cost for 2014 = 3 x Ballymun Regeneration Projects

Ronan Lyons | Regulations pushing up the costs of homes

CSO- Dwelling units approved down 16.6% in one year

World Bank Report 2015 | Ireland’s poor construction regulations are the biggest drag on our ranking

12,000 social + affordable houses at no cost to taxpayer?

Soaring house prices and rising rents could damage economy | National Competitiveness Council

COVER.pdf [Converted]

In this article in the Independent from December 3rd 2014  “Soaring house prices and rising rents could damage economy“, author John Mulligan discusses the 2014 National Competitiveness Council (NCC) Annual Report. The report suggests that soaring house prices and rising rents could damage Ireland’s competitiveness. Link to NCC: National Competitiveness Council. About the NCC from their website:

The National Competitiveness Council was established by Government in 1997. It reports to the Taoiseach on key competitiveness issues facing the Irish economy and offers recommendations on policy actions required to enhance Ireland’s competitive position. The NCC was established by the Government in May 1997 as part of the Partnership 2000 Agreement. The Department of Jobs, Enterprise and Innovation provides the Council with research and secretariat support.

In previous posts we noted the spike and fall-off of commencements due to the introduction of BC(A)R SI.9, with industry estimates that the new regulations may cost the consumer, taxpayer and industry €5Bn by 2020. Uncertainty and significantly increased costs due to new building regulations is continuing to be a major drag on the feasibility of many new residential developments.

The reluctance of Ireland to embrace accepted international best practice to establish a system of independent inspections and regulation for our construction sector continues to impact on our international competitiveness.

Link to 2014 NCC Annual Report: Ireland’s Competitiveness Challenge 2014

Extract from article:

________

Soaring house prices and rising rents could damage economy

Soaring house prices and rising rents could damage Ireland’s competitiveness as workers seek higher wages in a desperate rush to get on the property ladder, a leading government think-tank has warned.

The National Competitiveness Council (NCC) has also strongly urged the Government to take measures to prevent the return of another damaging property bubble.

In its annual report published today, the NCC said the rapid growth in house prices and residential rents, particularly in Dublin, “represents a potentially destabilising development”.

It said the increases could lead to “adverse knock-on consequences in terms of prices and wage expectations across the entire economy”.

The stark warning comes amid spiralling home price increases in the capital due to a lack of available housing supply.

The Central Statistics Office said last week that house prices in the capital had risen by 24pc in the past year, while across the country they were 16.3pc higher.

A national survey from property website Daft.ie showed that rents in Dublin jumped 17pc over the past year, while in Cork they rose 8pc, and in Galway by 7pc.

“Such rapid growth in property costs, allied to issues around security of tenure, can be expected to have significant adverse knock-on effects on wages and inflation,” said the NCC, whose chairman is Dr Don Thornhill.

Jack O’Connor, the leader of trade union Siptu, said recently that he expected far more pay increase demands to be served on employers next year than were made this year.

He warned it could lead to an “explosion” of claims.

“While economic recovery remains fragile and Ireland is a long way from a return to the undesirable construction boom of the mid-2000s, we must take action now to ensure that the conditions which facilitated the property bubble are not allowed to re-emerge,” cautioned the NCC.

Central Bank governor Patrick Honohan has proposed a mortgage cap that could also squeeze many first-time buyers completely out of the housing market.

But the NCC said the Government should not try to intervene in the property market with a “quick-fix” solution to boost the housing supply.

It said that experience showed it took about 18 months or more to respond to increased demand.

“Strong demand for housing already exists in Dublin and some other urban areas and demand is likely to grow over time,” it added.

In the past number of months, planning applications have been lodged by developers for major housing developments in the capital, some of them for hundreds of homes.

But Dr Thornhill said Ireland could look to the broader economic future with a “greater sense of optimism”.

However, the NCC report also said that increases in personal taxation since the start of the recession had “eroded competitiveness and incentives to work”.

“The council is concerned that hard-won competitiveness gains made since 2008 are in danger of being eroded as the economy returns to growth,” added Dr Thornhill.

Other posts of interest:

Legal perspective: consumer benefit? BC(A)R SI.9

How much would 100% independent inspections by Local Authorities cost?

BCMS Commencement Notices | Nine Months On

CSO | Construction output increased by 0.1% in Q3 2014

The € 500 million + cost of S.I.9 in 2014 | Residential Sector

SI.9 costs for a typical house

Developer makes 27% profit in 6 months: warns against state housing.

A ‘perfect storm’ for housing?

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Politicians asking questions about BC(A)R SI.9 | Summary

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By BRegs Blog on 18th December 2014

Politicians asking questions about BC(A)R SI.9 | Summary

In the wake of Minister Alan Kelly’s statement that he intends to amend BC(A)R SI.9, in the following summary we list a selection of issues various politicians have tabled concerning the new building regulations.

Senator David Norris discussed the array of unintended consequences and lack of consumer protection during a Seanad Deabate on SI.105- see Senators ask Minister to Revoke SI.9 (2 of 4).

Senator Michelle Mulheirn asked questions concerning pyrite in blockwork in the home county of the Taoiseach in Mayo- see Dáil update | Pyrite in Mayo.

Stephen Donnelly TD in the Dáil asked why we have no independent inspections in the new system- Dáil: Why not an independent inspection system?.

Kevin Humphreys TD asked a number of departments and Ministers responsible if costs associated with SI.9 on capital expenditure been examined- see The Cost Impact of Building Control (Amendment) Regulation (SI.9 of 2014).

Barry Cowen TD raised the considerable cost to house-building form the new regulations- Minister urges draughtsmen to register for BC(A)R SI.9.

Eoghan Murphy TD came back to the lack of consumer protections under the new system- TD’s suggest independent local authority inspectorate: BC(A)R SI.9.

Senator Cait Keane as part of an Oireachtas committee warned of the problems of a self-certification- Fine Gael expert group opposed the introduction of new regulations.

Claire Daly TD continued to champion the cause of owners with pyrite affected homes- Dáil : Pyrite Remediation Programme: 10th June 2014.

Senator Paschal Mooney was responsible for tabling a Seanad Debate on the unintended ban on self-building which still is relevant today- Senator Paschal Mooney, Minister Hogan and Seanad debate.

Mick Wallace TD who knows the construction industry better than anyone in Leinster  House warned that..

“… the major problem is that all along, the Construction Industry Federation and not the State appears to determine what is happening…The Minister’s system of assigned certifiers will crack up within the next couple of years” 

See post: Dáil debates: Mick Wallace and Minister Hogan- Pyrite

Other Posts of interest:

‘Onerous’ Building Regulations must be amended – Minister Kelly

3 County Councils ask Minister to Revoke SI.9 

Senators ask Minister to Revoke SI.9 (2 of 4)

Revoke S.I.9 – Fine Gael internal report to Phil Hogan in 2013 (3 of 4)

Going through the motions at speed – Independent.ie

Press piece: Co Council votes to scrap BC(A)R S.I. 9

S.I. 9 | Self-builders – 6 months’ update 

Press Piece: Fingal Councillors call to end BC(A)R SI.9 

Should the Architectural Technology Profession stay within the RIAI? | Liam Innes

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The following comment was sent to the BRegs Blog by Liam Innes and it has been formatted into a post. Liam Innes is one of two candidates on the ballot to be the Architectural Technologist member of the RIAI Council 2015.

I read with interest Joe Byrnes’ article and first of all let me say that it is regrettable that both Joe and Darren Bergin, the AT representative on Council, felt they had no option but to resign their positions within the RIAI. I can understand their reasons and Joe’s exasperation is there for all to see in the written word. Having worked with both over the last year as a member of the ATC I have seen at first hand their dedication and passion for the cause.

Going forward however, and many may think me naive, I feel that there still exists an opportunity to achieve recognition for the Architectural Technologist as a co professional with the competencies to carry out the duties of Design / Assigned Certifier as laid down in the BC(A)R legislation and for this to be promoted as part of any review of SI 9. This is only part of the story however. We also need to advance the overall standing of the Technologist within the RIAI and provide a platform for more inclusive engagement with the Institute.

My continuing optimism and involvement in the process, is based on the potential review of SI.9, and the possible submission that the RIAI Steering Group may make to any such review. The role of the Technologist must be part of this submission with recognition, and promotion of, their role as a registered professional within the legislative framework of a revised SI. 9.

While the Department of the Environment seem to have accepted the principle of the establishment of a Statutory Register for Technologists, continued pressure is required to effectively get this over the line with work required in the QQI in relation to standards in the AT field and the formulation of accession routes to a register.

The question has been asked;’ Why would technologists seek to undertake a role which is viewed by many as an uninsurable risk’. It is a legitimate question and I would think that there are many technologists currently in salaried employment who feel no need to become involved in the process. There are Technologists, however, whether by choice or as a fall out from the recession, who are running small mostly one man practices.The introduction of BC(A)R and the omission of the Technologist from the first tier of the framework has presented a serious problem for those Technologists who have been offering a full service in line with their professional competencies and who now have to explain to their clients why the service they offered on 28th February 2014 is now compromised by the implementation of BC(A)R on the 1st March 2014 yet their competencies remain unchanged. In many cases it is a basic as this.

There is a principle at stake here for many Technologists. It is one where they would like to be in a position to have the opportunity to decide, as many Architects are doing, whether they should provide the Design / Assigned Certifier service with all its associated risks. With most clients expecting a continuation of the full service the only realistic option currently available to Technologists is to join another professional institute and go down the Building Surveyor route which many are doing. This is not to denigrate the other professional bodies but many would say that the Architectural Technology Profession in Ireland should sit within the body of the RIAI but with their own identity and now is the time to settle this once and for all.

RIAI + Architectural Technologists | Malachy Mathews

CIAT + Architectural Technologists | Michael Quirke

Dáil | Architectural Technologist update

Architectural Technologists: Are you on the right bus?

CIAT Architectural Technologists Register goes live today!

Dáil: CIAT & RIAI- 2 Architectural Technologist Registers

Dáil: response on Architectural Technologist Register in 7 days

UPDATE- CIAT Register for Architectural Technologists in Ireland

Dáil TD’s want to Revoke SI.9 (4 of 4)

Architectural Technologists + Architects | Parity of Esteem?

Hot topic: Architectural Technologists and SI.9

Thoughts on a Register for Architectural Technologists

Architectural Technologists and BC(A)R SI.9: CIAT

Architectural Technologist – Platitudes, Head Nodding and BC(A)R SI.9.

RIAI NEWS ALERT: Architectural Technologist Register

Message from Mick Wallace TD to Architectural Technologists

Audio Clip: Dáil Debate 27th May- Architectural Technologists & SI.9