Mr. Cormac O'Rourke:

I am not sure how I can best describe the model. The model is one where the land is coming to us substantially below market cost because it is coming with the burden of the affordable housing. When it is transferred to us, the cost of land is substantially less than the market sector can access, so that cost benefit is passed through in the cost-rental model. On the extent to which other policy-driven items are passed through, again, as I said, we are discussing those with the Government and we will be told what it would like us to do and what it can do for us.

There are a limited number of levers. The Society of Chartered Surveyors Ireland produced a very good breakdown of what it takes to build a house. Certain things are to our advantage, particularly the cost of land, and the cost of land will come to us at substantially below market price because it comes with that burden that we can only build affordable housing on it, which reduces the value. There are other things that we can do internally within the LDA to reduce our costs but there are also items that are policy-driven.

The cost-rental model is not completely divorced what from what can be sourced in the marketplace in terms of construction. Construction is very different from the development model, where people build on their own land, whereas construction companies traditionally build on other people's land and run at much lower margins than developers.