Government considers budget move to boost housing supply

The Government is considering a range of measures in next month’s budget aimed at boosting much-needed housing supply.

A meeting of the Cabinet sub-committee on social affairs on Monday heard that while there is planning permission for up to 21,000 homes in the Dublin area, there has been little activity on the ground.

One option discussed at the meeting involves giving the National Asset Management Agency greater scope to facilitate construction of new houses and apartments.

Nama is already planning to assist with the construction of up to 4,500 homes in the Dublin Docklands area and other urban centres.

However, it has identified potential for land and property to yield up to five times that number of homes, according to informed sources.

Other supply-boosting matters discussed at the meeting included lowering local authority levies for developers who plan to build homes in areas of high demand.

The construction industry has been lobbying in recent times for a major reduction in development costs for housing, including development levies.

Any such move would likely involve the Government compensating local authorities for lost revenue.

The committee meeting was chaired by Taoiseach Enda Kenny and included Minister for Finance Michael Noonan, Minister for the Environment Alan Kelly and Minister of State for housing Paudie Coffey.

Another option discussed involved using the Ireland Strategic Investment Fund to enter the private residential property market by providing large loans to housing developers.

Zoned lands

Use of the fund - previously known as the National Pensions Reserve Fund -  is seen as a recognition of difficulties facing some developers in accessing finance to residential developments, according to sources.

Greater investment in infrastrucutre to make priority zoned lands usable for housing was also discussed.

A recent report estimated that land zoned in the Dublin area could provide up to 50,000 homes.

However, it found that about €165 million was needed for infrastructure such as water pipes, power lines and roads to allow the lands to be used.

The Dublin Housing Supply Task Force, set up under the Government’s Construction 2020 strategy, found that each of the capital’s four local authorities had identified the zoned land banks which could most quickly be brought into use if funding were available.

The meeting also involved ongoing discussion of ways to limited rent increases by linking rents to the consumer price index and other factors.

This “rent certainty” model is used in many European countries, and typically limits increases within a certain percentage limit of inflation.