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Property firms want Govt home-build fund

Wednesday, July 23 11:45:57

Property Industry Ireland (PII) today called on the Government to fund 5,500 new social houses through an accelerated E250m programme from the sale of surplus state properties.

Its pre-budget submission also called for a time-limited reduction in the VAT rate on the construction of residential property from 13.5pc to 9pc.

Following her appointment as Tnaiste in July, Joan Burton said that the Government would set in train a construction programme to triple the number of houses built to 25,000 a year by 2020 and help the 80,000 unemployed construction workers back into work.

PII said it believes that an extensive programme of reform can solve the increasing problem of homelessness, create employment in construction and provide high quality, sustainable private residences.

It said that Budget 2015 must underpin this increased investment and encourage further domestic and international investment in the commercial property sector. PII believes it is essential to support IDA capital investment in commercial property and IDA Ireland should again, on a selective basis, be enabled to enter into suitable pre-lettings of FDI type offices, with the express intention of those leases being assigned to the FDI tenants themselves.

Peter Stafford, Director PII, said: “We will build fewer than ten thousand private houses in 2014, less than half the required amount. A lack of supply in the private sector further increases prices and rents, but also puts more people in danger of homelessness. PII believes that with new funding sources, better delivery models and professional asset management, the houses which are needed to end homelessness can be delivered."

Homelessness, and the threat of homelessness, has been a visible and growing symptom of the Irish recession. The Housing Agency estimates that in the near future 89,000 households will rely on the State in some form or another for their accommodation, he added.

"In the aftermath of the financial crisis, overall capital investment in social housing has decreased from over E1.5 billion in 2009 to E376 million in 2013. The Government has an existing programme of disposing of surplus government properties to reduce running costs and is raising around E30 million per year. The capital income from an accelerated, programmed, strategic asset disposal strategy could amount to E250 million over the next five years and should be ring-fenced to attract private investment and fund the construction of 5,500 new social housing units."

This immediate cash injection into the sector should be accompanied by planning reform to accelerate planning for social housing development, with planning decisions by local authorities made within a six week period from a planning request. In addition, a dedicated team within An Bord Pleanala should make decisions on appeals within a further six weeks.

The current Part V programme is failing in its aspiration of providing a reliable supply of subsidised, integrated social housing in Ireland. A reformed scheme is needed to allow developers and professional housing bodies to agree the portion of a private development for social housing at pre-planning stage.

For more visit: www.businessworld.ie