Residential land agency to demand third of builds are affordable homes

New agency’s initiative is to drive down the cost of land, especially around the capital

The Land Development Agency is expected to be permitted to use compulsory-purchase orders to acquire lands neighbouring the State sites.

The Land Development Agency is expected to be permitted to use compulsory-purchase orders to acquire lands neighbouring the State sites.

 

A new agency that will provide State lands for residential development is to demand that almost a third of homes built on the sites must be affordable houses.

However, it is understood that the price of an affordable home – or the income of those who would qualify to purchase such a property – is yet to be defined.

Sources pointed to other State housing schemes that roughly allowed a single person on up to €50,000 a year or a couple with a joint income of up to €75,000 a year to qualify for affordable housing.

The plan for the Land Development Agency, seen by those in Government circles as one of the last remaining big policy moves to tackle the housing crisis, is to be brought to Cabinet by Minister for Housing Eoghan Murphy on Wednesday.

The agency will have €1.25 billion available to it to purchase sites to assemble land banks that would be suitable for development

The aim of the initiative is to drive down the cost of land, particularly around the capital.

Dublin Bus depots in Donnybrook, Ringsend, Clontarf and Conyngham Road are among those consistently cited by Government figures as obvious examples of land that would be more suitable for housing than their current use.

Compulsory-purchase orders

The agency is expected to be permitted to use compulsory-purchase orders to acquire lands neighbouring the State sites, similar to how the Dublin Docklands Development Agency and other organisations operated.

The agency will have €1.25 billion available to it to purchase sites to assemble land banks that would be suitable for development.

The agency will encourage developers to construct houses on State-owned lands, offered at discounted rates, in exchange for building a certain number of social and affordable homes.

Eoghan Murphy: “This year we are going to build four times as many social houses as we built in 2015.” Photograph: Brian Lawless/PA
Minister for Housing Eoghan Murphy: The plan for the Land Development Agency, seen by those in Government circles as one of the last remaining big policy moves to tackle the housing crisis, is to be brought to Cabinet on Wednesday. File photograph: Brian Lawless/PA

The Cabinet is expected to agree on the plan today and the details will be announced on Thursday by Mr Murphy, who is expected to set out a list of sites that will be released by the agency for development.

Industry sources estimate that the State providing lands to developers for a mix of private, social and affordable homes would reduce building costs by more than 30 per cent. However, Government sources were not willing to estimate how much of an impact the initiative will have.

The agency’s remit will focus on developing brownfield sites in cities. Land would be identified by the new agency for development which would then open up a tender process for developers to submit their plans on how to make use of the sites in question.

Private homes

Sources said that 30 per cent of homes on the sites will be expected to be affordable homes, with an additional 10 per cent allocated to social housing, in line with existing commitments.

The eventual aim is to have 50 per cent of all homes on such sites allocated in the social and affordable brackets. The developers would sell the remaining private homes for their own profits.

Releasing land to developers is one of a number of approaches likely to be used by the new agency. Another would be for the State to sell the houses itself. The agency would contract developers to construct homes for the State’s exclusive use.

Another would be a longer-term lease scheme, where land could be leased for the use of housing initiatives such as cost rental schemes.

Under cost rental, the rent is set at a level which covers the costs of providing the accommodation rather than a level that would generate profits.