The right moves: Cutting red tape with build deals and cheap land could ease crisis

Paul McNeive
Paul McNeive

The housing crisis is back centre stage and all agree that the problem is a lack of supply. New building is becoming viable again in the private sector, and supply is slowly increasing, but the real trouble is in the ‘social and affordable’ categories, where supply remains minuscule and the State seems incapable of building houses.

Frustratingly, money doesn’t seem to be the problem. But now, it appears that the cost of an avalanche of short-term, emergency solutions, will fast erode the capital required to build homes.

Architect Mel Reynolds has emerged as an incisive analyst and critic of the State’s housing policy and performance and I met him to hear his latest analysis. Reynolds told me that alongside providing a full architectural service to residential and commercial clients, he has always offered his clients his analysis of the economy, and State policy, relevant to his clients’ projects. An ability to analyse and compare myriad reports, has seen him reach dramatic conclusions.

Reynolds exploded the myth that a lack of land is slowing State building. Official figures show, he says, that there is enough residentially zoned land in the country for 414,712 dwellings. In Co Dublin, there is enough zoned land for 116,705 dwellings. The State controls residentially zoned land with capacity for 114,123 dwellings – that’s more than 25pc of the country’s capacity, and excludes land owned by the Housing Agency, CIE, Coillte, IDA and other semi-states.

In Dublin, almost half of all residentially zoned land is controlled by the State. He adds that South Dublin and Fingal County Councils between them own 67 sq km of all types of land – the equivalent of a small European country.

Overall, Reynolds asserts that ownership of residentially zoned land held by local authorities was under-declared by at least a factor of six in the Rebuilding Ireland Land Survey 2017.

So if land isn’t the problem, why did local authorities build just 100 homes in Ireland in the first quarter? Twenty-two local authorities built no homes and Kerry County Council’s 24 homes exceeded the entire output for Co Dublin, where just 15 local authority homes were completed.

Reynolds puts it down to leadership issues, bureaucracy, tortuous procurement processes and a series of “policy misfires”. Local authorities, he says, are “frustrated with a ridiculously bureaucratic four-stage procurement process which can take years”. “If there’s a change in scope, you go back to stage one,” he told me. “One year’s delay adds 5-6pc to your building cost.

“The procurement policy looks like a throwback to when there was little happening and was designed to keep all involved [in the Department of Housing and the local authorities] busy.” He cites the example of a site on George’s Avenue, Dun Laoghaire, where four separate design teams were involved in a “so-called rapid build project by Dun Laoghaire Co Council”. The result will be 12 houses. “It’s a massive waste of scarce, skilled resources,” he says.

Department of Housing “policy misfires” he says include the “self-certification Building Regulations” BCARSI9 of 2014 which add complexity and cost, the 2015 apartment regulations – “which make apartments more expensive” – the promotion of build-to-rent co-housing and student housing in Dublin which he says is making affordable apartment development unviable, and the “fast-track planning process, which is only saving two to three weeks, instead of months”.

Now the crisis is worsening because 50 new families are entering the Housing Assistance Payment Scheme every day. The annual cost of rent supplements, Housing Assistance Payments, the Rental Accommodation Scheme, the Social Housing Current Expenditure Programme, Emergency Homeless Accommodation and Family Hubs is projected for 2018 at €950m and to be €1.75bn a year by 2022. Short-term emergency measures are fast eroding the capital needed to build houses.

Alarmingly, Reynolds points out: “The ratio of rent-supported units versus additional new units (whether built or bought by local authorities) is 29-1 this year, and worsening.”

Worse again, Reynolds says it costs €270,000 more for the State to rent a house over 30 years, than to build it – and at the end of term, it has no asset.

I might debate Mel Reynolds’ views on some of those “policy misfires” but we agreed that the fast solution is for local authorities to make land available cheaply on licence and tender out projects on ‘design and build’ contracts.

Indo Business

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