The Government is facing a call for up to €1 billion in additional funding for the Land Development Agency as the State body steps up interventions in the housing market.
The agency was set up in 2018 to build homes on State property but took on new tasks under the Housing for All masterplan to back developers building “affordable” homes on private lands.
The organisation was promised €2.5 billion at the outset – €1.25 billion in capital from the Ireland Strategic Investment Fund and another €1.25 billion in debt– and potentially another €1 billion.
Now a business plan under discussion with the Government is understood to say the LDA’s prospective projects are expected to go well beyond the first €2.5 billion, meaning significant additional sums will have to be settled in coming months as the initial funds are spent.
One factor driving demand for more LDA funds is a weakening in the flow of private investment fund money into the housing market since the European Central Bank raised borrowing rates last year for the first time in years. Such moves spurred developer interest in LDA support.
The LDA already has agreements to back five private developers building 671 homes in Dublin, Cork, Wicklow and Waterford and is in talks with four others on plans that will bring to some 1,000 the number of homes built under its Project Tosaigh initiative.
The Project Tosaigh scheme, unveiled in autumn 2021, aims to deliver 5,000 homes in five years. The objective was to speed up building on projects with planning permission on which construction had not commenced.
The first partners are: McGarrell Reilly (247 apartments at Hansfield, Dublin 15); Cairn Homes (142 units in Delgany, Co Wicklow); O’Flynn Group (92 affordable for sale dwellings in partnership with Cork Co Council at Mallow, Cork); Harcourt Developments (95 cost rental dwellings at Citywest, Dublin); and Whitebox (95 affordable for sale units at Kilbarry, Waterford).
The likely call for fresh LDA funds comes after the body received 100 expressions of interest in November for a second building phase under the Project Tosaigh plan, 30 more than in the first phase.
“The agency received a strong level of submissions in this second phase, about 100, and expects to secure a similar or greater level of affordable homes from this process as the 1,000 it secured in the initial call,” the LDA said.
“While final details are to be determined as the LDA is currently working through proposals, it is likely that this process will involve higher density projects comprising apartments which will be used for cost rental homes.”
The LDA separately has planning permission for some 597 new dwellings on State lands at Shanganagh Dublin, 265 dwelling at on State land at St Kevin’s Hospital, Cork, and for 219 units at Devoy Barracks, Kildare. Construction has commenced at Shanganagh and at St Kevin’s Hospital in Cork.
Planning approval has been sought for a further 2,755 units on assorted sites at Hacketstown in Skerries, Balbriggan in Dublin, Dundrum Central Mental Hospital Dublin and St. Teresa’s Gardens in Dublin.
“The agency has approximately 5,200 homes in the design and development process, and it has a strong pipeline of projects to continually add to this portfolio, with more sites to be added in the coming months,” it said.