Construction strategy to tackle Dublin housing squeeze and planning bottlenecks

A taskforce to tackle Dublin’s housing squeeze, streamlined planning and proposals to revive bank finance form the foundation of the Government’s 75- point plan to aid the Republic’s construction industry.

Launching Construction 2020 yesterday, Taoiseach Enda Kenny said employment in the sector has collapsed from more than 270,000 at the peak of the building bubble in 2006 to fewer than 100,000 today.

Over 100,000 building workers are unemployed, eight out of 10 of them for a year or more. Mr Kenny said the strategy was designed to “get those people back to work” and to support a properly functioning and sustainable construction industry.

One of the first problems he and Tánaiste Eamon Gilmore pledged the strategy would tackle was the shortage of housing in Dublin, which last year drove up residential property prices by more than 14 per cent.

“We recognised that the dearth of family homes for sale in Dublin is particularly acute and there is a mis-match between supply and demand,” Mr Gilmore said.

Obstacles
The Department of the Environment, Community and Local Government and the city's four local authorities will set up a taskforce to tackle the problem. One of its first priorities will be to deal with obstacles to "viable and appropriate developments".

It will draw on work already done by the local authorities, which has identified sites, close to public transport and zoned for housing, that could accommodate up to 30,000 new homes. Local and national government will also co-operate on a “kick-start” initiative to support new, high-density developments in areas of Dublin where there has already been extensive investment on the necessary infrastructure.

The Government is also considering introducing a State- funded insurance scheme to make loans more affordable for first-time buyers by cutting the deposit they would be required to put up. Home loan approvals by the banks fell to just under 15,000 last year from a peak of 204,000 in 2006.

The report says any decision on this will depend on the findings of an economic impact analysis being prepared for the Minister for Finance, which is due by the end of July. Mr Kenny stressed the proposal was “very much contingent” on the outcome of that analysis.

Government departments, local authorities, the Central Statistics Office, State agencies and the construction industry will be required to come together to establish a national framework for housing whose task will be to match supply with demand. This will be put on a statutory footing and will produce an annual statement of projected supply and demand.

Planning reforms
The document outlines 14 planning reforms. These will include streamlining appeals processes and giving local authorities power to ensure those seeking permission for large-scale housing developments provide them with a schedule and stick to it.

The Department of Finance, the National Asset Management Agency and the banks will come together in a working group to look at how best to supply sustainable finance to the building industry. This will take into account the gap between the amount of cash needed to fund new developments and what is actually available, and will explore using alternative sources of finance to the banks.

Finally, the Government is pledging to introduce tougher regulation to avoid a repeat of scandals such as Priory Hall.

Construction 2020: Main points

• A task force to tackle Dublin's housing shortage and a statutorily-based system for tracking residential supply and demand around the Republic.
• Streamlined planning and appeals to ensure that building projects get underway quickly and that vacant sites are not left lying idle.
• The Government will consider introducing a payment insurance scheme to aid first-time buyers in getting mortgages, depending on outcome of an economic review of this proposal, which will be completed in July.
• A high-level working group made up of the Department of Finance, Nama and industry players will look at how best to improve the supply of finance to construction.
• Ensuring that new building regulations introduced last year are effectively implemented and bringing in wider reforms aimed at protecting consumers.