Government announces three new housing measures in effort to boost supply

The government has announced three new housing measures in an effort to encourage the supply of homes.

The changes to the Housing For All plan, agreed by Cabinet on Tuesday, aim to refurbish homes faster, to speed up home construction and to boost the supply of affordable rental homes.

The first move is to scrap development levies for 12 months to encourage building by saving an average of 12,650 euro per home.

The measure takes effect immediately and the government will reimburse local authorities so that they can continue to fund public infrastructure and services that would have been done through the levy.

The second is the increase of the Croi Conaithe vacancy grant from 30,000 euro to 50,000 euro for vacant properties and the grant of 50,000 euro increased to 70,000 euro for derelict properties, extended to cover houses built up to 2007 instead of pre-1993, and will be available for properties intended for rental as well as owner-occupied.

This is effective from May 1.

These changes are similar to those asked for by the Regional Independent TDs ahead of a motion tabled by Sinn Fein following the government’s decision to lift the eviction ban.

Five TDs in this group voted with the government in that Dail vote last month.

The third is for a scheme for cost-rental urban apartments and homes to rent which have planning permission but which are not being progressed, which the minister for housing Darragh O’Brien said was due to a “viability gap”.

The government is to “bridge” that gap by committing up to 750 million euro via the Land Development Agency and other providers to construct between 4,000-6,000 additional rental units in urban areas if they are part of the cost-rental system.

“We firmly believe that cost rental is a very popular form of tenure: long term, secure, state-backed rent, 50-year secure tenures with a minimum reduction on the market rate of 25%,” Minister O’Brien said at a briefing on Tuesday.

“It will help to subvent the cost of building new homes, provided that they’re used for cost-rental and that means more state-backed affordable homes for our people.”

Mr O’Brien said the first contracts would be signed in May, and that it’s expected to cost between 0.5 and 0.75 billion.

Speaking at the announcement of the measures, Taoiseach Leo Varadkar said that there is a “huge deficit of housing” in the country, and that “we need to play catch-up”.

He said the Government’s mission was “to make homeownership affordable for the majority again”, as he pledged to build 35,000 homes next year.

He said that the new measures “flow from interim advice” given by the Housing Commission in February, the housing summit in January, and “discussions and proposals made to us from our various parliamentary parties”.

“We expect these actions to have an immediate effect and increase the number of homes being built in the coming years,” he said.

The target for new-builds this year under Housing for All is for 29,000; Mr Varadkar said when student accommodation and derelict properties being brought back into use is included, it will reach over 30,000.

Tanaiste Micheal Martin said the government has been investing in housing “at an unprecedented level in the country’s history over recent years, with an additional one billion euro of measures being announced today.”

He said that “there is hope when it comes to housing”, and said in March, there were almost 3,300 commencement notices for new homes across the country – the highest number of commencements in March since records began in 2014.

Rounding on the opposition, Mr Martin said Sinn Fein leader Mary Lou McDonald had “dismissed these proposals before they’re even published”.

“To me it seems for the opposition housing is a problem to be exploited for political gain.”

After listing the various State schemes to help people buy or access housing, Mr O’Brien acknowledged that “not everyone is feeling the progress we’re making”.

He said that viability and affordability are “two sides of the same coin” as the scrapping of the development levy aims to activate dormant permissions, which in turn is expected to boost supply.