Plans for affordable housing in Ireland

by Anthony Garvey



A confrontation between Government and the construction industry is looming in the Irish Republic over plans to impose "affordable housing" quotas on all new developments.

The quotas are the Government's response to public concern over the continuing property spiral. House prices have risen by 70 per cent in the last three years to a current average of IR£105,061.

Now the Government wants to tackle the crisis by compelling builders to reserve up to 20 per cent of developments for what it calls "social or affordable housing."

Details of the plan will be outlined in a planning and development bill later this month.

The Irish Home Builders Association, representing the majority of property contractors, warns that it will resist any attempt at compulsion and will take its fight to the courts if necessary. Director Michael Goggins said it would be unfair to penalise them for rising house prices. The quota proposal appeared to be in breach of the property rights of builders, as guaranteed under the Irish Constitution, and would be challenged in the courts, he warned.

But former environment minister Noel Dempsey hit back. "The builders are making huge profits and will now have to give something back for more affordable houses. Many young people, even those earning up to IR£30,000, are caught in an affordability trap and there is a very strong social need for measures such as this."

Under the Dempsey plan, it is understood that builders will be given a range of options to meet the 20 per cent quota of affordable housing in new developments. They will be able to surrender part of the site to the local council, which would develop it or sell it on to another contractor for affordable housing.

Irish builders completed about 40,000 houses last year, a record for the industry. Had the quota system been in operation, providing 8,000 extra homes for first-time buyers would have eased the affordability gap.

Several aspects of the new plan remain to be clarified, such as how local councils will define affordability, the qualifying criteria for those who will get the houses, and whether mortgage arrangements will be underwritten.

But the biggest worry is that builders will simply recoup the 20 per cent loss of their original site by pushing up the prices of the remaining houses.