Editorials

The Irish Times view on land for housing: the builders rush in

There is something troubling about the haste with which builders are rushing headlong back into the arms of the State to offload housing land

The last time the State got into bed with developers spurned by the banks was in advance of the property crash. Photograph: Chris Ratcliffe/Bloomberg

Sun Apr 24 2022 - 19:45

There is something troubling about the haste with which builders are rushing headlong back into the arms of the State to offload housing land. The Land Development Agency (LDA) last November put out a call for expressions of interest to acquire homes, or sites with planning permission, which in either case would yield 150-plus houses and apartments for affordable purchase, or cost rental.

Its aim, through this new initiative Project Tosaigh, was to secure 5,000 homes in a series of bids over five years. In just three months it received offers of more than 100 large sites. If all proposals were successful, that would mean the LDA tripling its target for the entire programme in just its first call for submissions.

Not all these sites will be suitable or attractive to the LDA. Others may fit the bill but for one reason or another the deal won’t come off. However, the zeal with which developers have embraced the opportunity is something to behold. Why are so many so willing to divest assets in which they have made considerable investment, by bringing sites through the planning system and in some cases actually putting blocks on the ground? The simple answer is money.

The LDA is unwilling at present to identify particular sites and how much it is spending on them. Chief executive John Coleman said the agency is driving value for money and the locations it has selected are in good areas where housing is needed, including Dublin, rather than fields in the middle of nowhere which never should have been rezoned. But the money being offered must represent a very appealing deal for site owners or they would have taken their chances on the open market.

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Another reason developers are so keen on the LDA is its willingness to fund them at a time when banks and other finance providers are doing their sums, factoring in rising construction costs, and determining that many previously viable schemes no longer make the cut. The last time the State got into bed with developers spurned by the banks was in advance of the property crash. That didn’t end well.

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