Providing housing for first- time buyers and single people is not commercially viable, and interventions are needed in the market to improve viability, a new report states.
Policy Options for Supporting the Provision of Housing at Affordable Prices, commissioned by the Society of Chartered Surveyors Ireland, recommends a national housing authority be established to address the homelessness crisis.
The report, by Tony Foley, a senior lecturer at Dublin City University, says it is reasonable to expect that more normalised market conditions will provide a sufficient incentive to supply new housing stock. But issues will still arise in meeting the needs of lower income groups.
It says policy interventions are needed to improve commercial viability and increase the supply of affordable housing.
The proposed new authority would be responsible for implementation, direction and co-ordination of housing policy and strategy. It would also foster an integrated approach to housing needs based on objective research and intelligence.
Other recommendations include universal planning standards, reduced development levies, and landlord tax incentives.
The report recommends a three-year reduction in VAT on new homes worth up to €300,000, from 13.5 per cent to 9 per cent. And it says the Government should commission “a volume of new houses from the private construction sector” on land it owns to sell to the owner-occupier sector.
The report also recommends that consideration be given to rezoning additional land for housing to prevent big land price increases.
The net costs of the measures would be much lower than the gross costs because of the increased construction and the taxes collected, the report said.
Society president Andrew Nugent, said, for example, that the cost of an average newly built three-bedroom house in north Dublin, including profit, is €339,000. But the selling price is about €280,000. So it is not currently sustainable to build that type of house, he said.