Six-storey apartments ‘are optimal height for affordability’

Government report says increased costs mean any higher is less appealing to developers

Banks are generally supportive of a limited number of strong “bankable” developers but not smaller operators who are also capable of building apartments and houses.

Banks are generally supportive of a limited number of strong “bankable” developers but not smaller operators who are also capable of building apartments and houses.

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Increased structural and safety costs for high-rise buildings mean that six-storey blocks are the “optimal height” to make “affordable” apartments economically viable for developers to build, a government report has found.

The report said that apartment buildings of a greater height do not necessarily increase the density of housing developments.

The findings are contained in a report – called the “review of delivery costs and viability for affordable residential developments” – published this week by the Department of Housing, Planning and Local Government.

It says that “contrary to common understanding, higher-rise development” can be a “a more expensive form of development”.

“This is generally due to the increased requirements from a structural and fire safety perspective. In this regard, high-rise does not necessarily improve matters where affordable delivery is the focus, nor does it always translate into increased density.”

However, it says that to avoid urban sprawl, while also keeping construction costs relatively low, that “base heights in Dublin and regional cities of at least six storeys should be set in locations”.

Appropriate areas should be targeted for seven to 10 storeys, it says. The report was largely completed early last year, before Minister for Housing Eoghan Murphy changed planning guidelines to remove height restrictions in inner cities and along transport routes.

Instead, the suitability of each site in such areas will determine how high a building can be constructed.

Accessing finance

The report also said that accessing finance is still a problem for developers, particularly smaller builders.

Banks are generally supportive of a limited number of strong “bankable” developers but not smaller operators who are also capable of building apartments and houses.

The availability of land is also cited as a problem, and the report says the emergence of “investment-type vehicles” such as Real Estate Investment Trusts (REITs) mean that larger companies can afford to take risks by holding on to land, whereas smaller, family-run companies may have been quicker to develop in the past.

“Land for housing in Ireland was traditionally bought by house-builders, generally family businesses, whose interest was to pass a sustainable business on to future generations. Supply and demand from time to time created certain issues for pricing but generally business was conducted at sensible levels.”

The report also highlights that “certain lands in State ownership have been identified as potentially suitable for residential”. The Government’s “Project Ireland 2040”, announced earlier this year, said a new National Regeneration and Development Agency will be established.

Finalised

Work on the agency is still being finalised but, in effect, it will seek to open up land held by semi-states, local authorities and others for development. It is envisaged, for example, that it could help identify land held on the outskirts of Dublin that could be used as bus depots instead of current prime locations around the city.

Responding to the publication of the reports, Sinn Féin housing spokesman Eoin Ó Bróin said they “confirm that the market cannot deliver genuinely affordable homes and that State land should be used to deliver more residential units”. The Dublin Mid West TD said that local authorities and housing bodies are best placed to build social and affordable housing.

Fianna Fáil housing spokesman Darragh O’Brien said the Government must “amplify building” and that an “ambitious new affordable housing scheme on State lands must form an essential part of the Government’s strategy in the coming months”.

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