Oireachtas Joint and Select Committees

Tuesday, 9 May 2023

Joint Oireachtas Committee on Housing, Planning and Local Government

Modern Construction Methods: Discussion (Resumed)

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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Everybody is very welcome to the meeting where we reconvene our discussions on modern methods of construction. Today we are joined by the following expert witnesses: Mr. David Browne and Mr. Pat Kirwan, Royal Institute of the Architects of Ireland, RIAI; Mr. Tom Parlon, Mr. Sean Downey and Mr. Martin Searson, Construction Industry Federation, CIF; and Mr. Dominic Stevens and Ms Claire McManus, JFOC Architects. I thank them for their attendance today and for their opening statements, which they sent us in advance.

I will read a short note on privilege before we begin. I remind members of the constitutional requirement that they must be physically present within the confines of the place where the Parliament has chosen to sit, namely Leinster House, in order to participate in meetings. Those witnesses attending in the committee room are protected by absolute privilege in respect of their contributions to today's meeting. That means they have an absolute defence against any defamation action for anything they say at the meeting. Members and witnesses are expected not to abuse the privilege they enjoy. It is my duty as Chair to ensure this privilege is not abused. Therefore, if witnesses' statements are potentially defamatory in respect of an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that witnesses comply with any such direction. Members and witnesses are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

The order of the opening statements will be as follows: Mr. Browne, Mr. Parlon and Mr. Stevens. We will have seven-minute segments for questions and answers. I invite Mr. Browne to make his opening statement.

Mr. David Browne:

On behalf of the RIAI and my colleague, Mr. Pat Kirwan, I thank the committee for its kind invitation to us to present to it today.

I am an architect representing the RIAI. I am also a former president of the institute and a current director of RKD Architects, a large Dublin headquartered practice, which works on design, project management and sustainability across many types of building from commercial to industrial, university and residential, both in Ireland, throughout Europe, and elsewhere around the world.

The RIAI is committed to providing guidance and advice to architectural practices and practitioners with the aim of promoting high standards and high-quality design at the heart of the construction process, to facilitate a collaborative approach and to enable innovation in the built environment.

Business as usual in building design and construction will not sufficiently address the urgent challenges of climate change and Ireland's growing population and consequent housing crisis or the added difficulties of labour shortages and gender imbalance in the construction sector.

Embracing modern methods of construction, MMC, through a design for manufacture and assembly, DfMA, approach to design has the potential to help address many of these critical issues. DfMA and MMC, if adopted at scale in Ireland, can have an important role to play in meeting the targets of the national development plan, NDP, by helping to address current significant productivity, labour and skills challenges. It is important to understand that the application of DfMA and MMC in both the public and private sectors in Ireland cannot be achieved by the construction sector acting alone. MMC enabled by DfMA requires a profound change not only in the approach to design, manufacture and assembly but also fundamental change in the financing, bonding, insurance, procurement, contractual, technical standards, regulatory systems and approval processes that currently primarily support more traditional approaches to construction. Change will require input from the Government, private developers, manufacturers, the banking and insurance sectors, statutory authorities and Government agencies.

There is currently a low level of MMC manufacturing capacity in Ireland, particularly for volumetric modular construction. To enable establishment of MMC at scale, this shortfall could be addressed by the public and private sectors through incentivisation such as, first, the setting of mandated targets for the use of MMC in public sector building programmes to help establish a consistent level of demand. The second is to potentially provide annual unit requirement pipelines to be delivered through MMC across various sectors, both public and private, in particular in housing, education and healthcare.

These initiatives will take some time to establish and the sooner they are adopted, the sooner MMC can contribute at scale to the more productive and faster delivery of construction projects.

I will ask Mr. Kirwan to take over from here.

Mr. Pat Kirwan:

I am a director of C+W O'Brien Architects, an architectural practice specialising in modern methods of construction. We are also based in Dublin. I am a co-founder and current board member of MMC Ireland, an independent organisation representing those who operate within the MMC sector in Ireland.

Traditional construction has been employed for centuries to build homes and other buildings. Typically, traditional construction methods take place mainly or entirely on site, and invariably these are sequential processes where one process cannot begin until the preceding task is complete.

The Irish construction sector is largely characterised by a culture of seeing construction as a one-off bespoke process from one project to the next where traditional construction methods have predominated.

Construction projects, by their nature, are based on assembling constituent components. The smaller the number of components that must be assembled on site, the more productive and predictable the project will be. Using preassembled components to improve productivity has long been used in manufacturing industries. MMC creates a shift away from traditional on-site construction and assembly to off-site manufacturing-style processes like those used in the automotive sector.

The concept of aligning construction with manufacturing-style processes is not new to the construction industry. Prefabrication and industrialisation of construction have been used for decades. The use of industrialised construction methods in Irish housing dates back to the 1960s when large structural precast concrete wall exterior prefabricated cladding panels were used to build seven -storey towers in Dublin. What makes MMC different to the previous attempts to rationalise construction through prefabrication and industrialisation are the wide reaching and holistic impacts, not only on design, procurement, and construction but on societal and environmental concerns.

We also need to articulate the benefits of MMC and remind ourselves why we their use is a good idea. MMC offers many benefits over traditional methods of construction and these are key to addressing the demands of high output levels in the housing market. While MMC alone will not fix the low productivity issues of construction industry overall, they are a driver for a systematic change in culture and process that will also improve on the environmental impacts of traditional methods of construction.

The main benefits of MMC being reported today are increased productivity and innovation. In most cases, MMC can be carried out independently of ongoing site works, insulating it from issues with on-site construction programmes and project management. Greater programme certainty and increased levels of productivity can be achieved through factory-based production.

The second benefit is a higher quality product. Standardisation of components in a controlled factory environment can drive higher construction quality and produce significant reductions in defect rates.

Site safety and health and well-being are also improved. There are many benefits to those working in a factory-based, controlled environment. Safer working environments can be achieved, and on-site safety is improved.

Using MMC also means a reduced environmental impact. Optimising component production not only increases productivity but also reduces material waste. Carbon emissions can be reduced by lowering material transport cycles and increasing rates of material recycling.

The current barriers to a wider adoption of MMC have been well characterised at international level and these barriers equally apply to the Irish construction industry. A UK cross-industry group was established in 2004 to examine the barriers to the greater use of MMC in the context of housing. The barriers identified in the report were reinforced by a follow-on survey of the top 100 house builders in the UK in 2005. More recently, in an Irish context, a 2021 Ernst & Young report commissioned by Enterprise Ireland, found similar barriers to adoption as those identified in the UK back in 2004. These barriers can be characterised in a number of ways. The first is cultural change. MMC moves traditional construction methods from site to factory-based settings. Design methodologies need to adopt a forward-looking approach where the manufacturing, logistics, planning and assembly phases of projects are considered at an early stage. Transition from traditional to MMC requires a major change in the way we design, procure and construct buildings.

Procurement strategies are another barrier. The cyclical nature of the construction industry in terms of demand, investment and skills poses a challenge for factory-led manufacturing processes. Supply chain capacity and security is the Achilles heel of MMC adoption. The fragmented nature of procurement in the industry restricts its ability to build economies of scale, which benefit the factory-line type production processes that many forms of MMC employ. Developing procurement at scale, either at project or central government level with newer funding models, and possibly mandates for use of MMC, could help build supply chain capacity, resulting in increased competition within the market and help reduce capital costs and as such the cost of construction.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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I am sorry to interrupt Mr. Kirwan but we try to keep the opening statements to five minutes because it helps us to get through business. We can return to the remaining aspects of the opening statement. We want to cover the areas of skills, upskilling and adoption of MMC and then we can return to the opening statement.

Mr. Tom Parlon:

On behalf of the CIF, I thank the committee for the opportunity to address this important issue, which could have a major influence on the way that we deliver housing in the future.

Modern methods of construction are defined in the UK Ministry of Housing, Communities and Local Government cross-industry working group with seven different levels. These range from simple on-site innovative processes employing new techniques, equipment or materials, right up to 2D panelised systems such as timber frame housing and 3D volumetric units that are complete or near complete 3D units. Both 2D and 3D units typically employ either timber or steel fabrication.

In 2016, the CIF set up a policy committee to support the digitalisation and modernisation of our approach to delivering construction projects. The committee contributed to the establishment of the construction sector group’s subgroup on innovation and digital adoption. The subgroup has seven key actions to answer the productivity challenges and steer construction towards a more sustainable delivery model. These seven actions are already delivering national centres to drive digital adoption, research and innovation and the development of MMC.

We are all aware of the need for the continued development of a modern-facing industry that delivers best value for clients and answers the major societal challenges we face. We know there is a race to secure the next generation of skilled labour for all industries and with the ongoing roll-out of the NDP, Ireland’s construction sector is meeting these challenges head-on.

Our members have been adopting off-site supply chains for the past three decades in certain specialist subsectors. Elements of the housing industry have used timber frame, a form of 2D MMC, to deliver its homes for the past 30 years, culminating in 50% of scheme homes being delivered using this technology in 2022. Apartment developments have been extensively using precast or hybrid concrete frame systems for the past 20 years to efficiently deliver medium to high rise developments. Using off-site manufacturing supply chains can offer certainty of delivery in terms of time and cost and bring major advantages in the on-site programme duration.

However, we have an industry that relies on certainty. It relies on a line of sight for demand for a particular type of service or at least a pipeline that allows a degree of preparation and investment based on the skills and product that will definitely be procured. Our industry can have a long lead-in time to delivery, but when the green light is given, all the demand and risk passes on to the supply chain partners. They are expected to respond with resources as if they have been storing them up waiting for an instruction to proceed. The report on the costs of residential construction commissioned by the Department of Housing, Local Government and Heritage focuses on typologies and the variation in standard specifications across the four European exemplar sites.

The industry itself can focus on the optimisation of its supply chain by streamlining demand and ensuring that investment supports a focus on standardisation of approach to delivering a high performance product that can meet the highest standard required by our building regulations and offer a high-quality solution for building users. Moving towards the use of off-site fabrication allows for better quality controls, better use of labour so that skilled people can perform higher value works and provide traceability for assurance of standards and cost-effective asset management. The off-site manufacturing companies need to have better visibility on client demands and they want to see direct frameworks being established so they can commit their investment.

The recent news of market failures for both Entekra and Legal and General should be a wake-up call for the market and housing clients in particular. Ireland’s construction sector remains a very fragmented network of sub-supply chains with almost 50,000 registered enterprises, more than 90% of which have fewer than ten employees. That network of enterprises has to respond to where demand lies.

There is little room for investment in future development, research, innovation and carrying out pilot projects to try to move into new emerging sectors. Unless there is a clear signal from construction clients that there will be a sustained demand for particular services, companies do not have the luxury of being able to reposition their business to build that capacity and take advantage of it.

Over the past three years, the CIF has published three separate reports on MMC, which are included in our appendix to this statement. There are a number of key issues facing the sector that will determine whether we build greater capability in the sub-supply chain to deliver through the use of off-site manufacturing. They include: the need for platform-based designs to allow the supply chain to calibrate its offering in a standardised approach and generate efficiencies from scale; enterprise grants and low-cost finance to stimulate capital investment and support growth in capacity; repositioning our skills delivery to allow the provision of task-based training for industrial needs that recognises where production demand is; a standardised procurement pack, with frameworks, preconstruction service agreements and alignment to allow collaboration with contract parties; alignment of the required standards to support MMC, thereby removing barriers to entry but demanding a golden thread of technical compliance data; a financial delivery model to support the business process cycle with front-loading for procurement, vesting linked funding models, insurance and alignment of certification sign-off; and appropriate design development and information management, with a design for manufacture and assembly process.

The smart off-site association within the CIF is made up of some of the largest providers of off-site fabrication in the State. There is an opportunity for the industry to double its production scale, which would significantly contribute to meeting the targets set out in Housing for All. Add to that the additional opportunity for education and health in off-site manufacturing supply chains and you can see how there could be demand constraints ahead. Alignment of the needs of the State under the NDP as well as major private sector clients can help to establish what requirements there are for MMC services. The MMC sub-supply chain will undoubtedly respond to the need for greater capacity.

We can truly aspire to a more digitally enabled, sustainable and modern industry that is capable of delivering our infrastructure, homes, schools and hospitals. We can also have an industry that is world class and exports those services and products all over the world when demand contracts domestically. We are already doing this in many mission-critical facilities for global clients. Now is the opportunity to scale that offering for the rest of the NDP and housing.

Mr. Dominic Stevens:

I am a lecturer in TU Dublin and, in private practice as an architect, a director in JFOC Architects, a company that has helped to deliver more than 10,000 homes over the past 35 years. During my involvement with JFOC over the past eight years, we have specialised exclusively in residential living in low-, medium- and high-density environments, with projects in planning and in construction across Ireland. I am here with Ms Claire McManus, who is the other director of JFOC. She sits on the Housing Agency's supply and affordability panel, the joint housing committee of the Department of Housing, Local Government and Heritage and the RIAI, the Central Statistics Office's housing statistical working group and Dublin City Council's special purpose housing committee, along with being the RIAI spokesperson on housing.

My early career was in Germany. Over the years, I have stayed in touch with practice there, in particular housing practice. This has provided me with insights into both systems. Modern methods of construction lie at the core of the production of German housing. Others have already discussed the technical and industry aspects of this matter, so I wish to discuss a number of other key issues related to design, planning and regulation.

By way of introduction, it is crucial for the planning and regulatory systems to adapt to be able to serve the production of affordable housing using MMC. It has to be understood that the future of MMC lies in off-site timber frame manufacture for both low-rise and high-rise buildings. This affords great potential for meeting our climate goals and for growing a domestic high-tech timber manufacturing industry. For the timber frame manufacturers who operate in Ireland, tooling up for large amounts of repetition across projects over a longer period could greatly increase efficiency and will reduce building costs.

There is a great deal of discussion around whether we should have national housing standards or allow local authorities to set their own standards. To have any hope of delivering MMC at scale, we need national standards. We should be proud of our housing standards as being among the highest in Europe, both in terms of space standards and building standards. We should not be afraid of Irish minimum standards. Indeed, we can be proud that the Irish minimum standard apartment is among the largest in Europe.

We will have considerable difficulty delivering these efficiencies through MMC without adaptation to planning and regulatory environments for two main reasons. First, the Irish planning system, where bespoke solutions are often insisted upon, and standards differ from county to county. Second, the guidelines and building regulations are constantly changing, particularly over the past six months or a year. To give an example in practice, we are currently working on designs for planning applications that are based on our winning Housing Unlocked competition design. We developed this design with timber frame manufacturers FastHouse to be an example of economic off-site construction. This design was selected as excellent by a jury of architects, urban designers and housing experts, so we can safely assert that it proposes high quality. Despite this, when we apply the solutions proposed in this design to individual local authorities in the planning process, it meets with resistance despite meeting all regulations. It simply does not seem "orthodox" to them, so they apply their own subjective opinions. This problem is added to because almost all housing projects of a certain scale end up being subject to third-party appeals and requests for further information, which often lead to further modifications.

It has been recognised that these and many other inefficiencies in planning bring uncertainty for investors, costly and unnecessary delays for delivery, missed opportunities for contractors and housing shortfalls for the population. From an MMC perspective where certainty is required in order to tool up for repetition, this lack of certainty in the planning process could be fatal.

Returning to my early career in Germany, when we compare the German and Irish planning systems, we find two democratic systems that are fundamental to our constitutions. Both have national, regional and local planning levels, which follow professional and political procedures. However, there are three fundamental lessons that we can learn from Germany about efficiency, accountability and certainty in development.

Regarding efficiency, the planning effort in Germany is applied first to larger master plan areas called B Plans. This process brings community involvement forward to the beginning of the process and is equivalent to an Irish strategic development zone, SDZ. The more contentious issues, such as building height and density, are decided at plan formation stage. These are as demanding to get in place, but once decided, they set a fixed rule for the development of an entire area. By complying with the established rules, all sites coming forward for development can get planning approval much faster, so much so that, as a young architect, I did not really think about planning permissions as being any kind of barrier in the process.

Regarding accountability, planning rules in Germany are not policy, but law, called the Bürgerliches Gesetzbuch, or BGB. In this sense, the pre-application advice is legally binding for the local planning authority. This allows certainty. Our entire economy works on accountability and performance, so there is no reason that a council should not behave in the same way.

Regarding certainty, development law in Germany translates ambiguity into rule-based formulas. These set clear rules for site coverage, building height, maximum floor area etc. You get all this confirmed via a pre-application and you know exactly where you are going. This certainty invites more smaller players who cannot afford to gamble hundreds of thousands of euro on planning applications, with high chances of refusal or overturning.

A question that arises when you speak to the man on the street about prefabrication and MMC is whether repetition is important to be able to do it effectively, whether repetition in housing is tantamount to poor quality and whether it constitutes prefabrication. In fact, repetition has always been crucial in the production of housing, even using traditional construction methods. Urban designers often refer to housing and offices as "fabric" as opposed to public buildings, which they call "monuments". If we step outside into Georgian Dublin, we are in a sea of similar house types. If we walk a little further into Portobello or the Liberties, we once again see repeating Victorian house types. We view these as being highly desirable. It is not the same with more recent housing, where each individual apartment building is, for some reason, unique. This has happened through the architecture profession responding to the demands of a planning system that seems to favour novelty and bespoke design. Using MMC, alterations to specific finishes, window styles and so forth remain possible, but the main thrust of the building design and form is best fixed.

Think of a Georgian house. They all have the same floor plan and the same logic.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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In order to be fair to everyone in terms of time, we can return to the summary issues. I want to thank all the witnesses for their opening statements, for being here and for giving up the time in their day to assist the committee with this.

Last week, Coillte, which obviously grows a lot of the timber in this country, appeared before the committee, as did SOLAS, which does the training and the Office of Public Works, OPW, which is constructing volumetric housing at present. There was also the National Standards Authority of Ireland, which the witnesses referenced. We need building regulations and standards to be aligned. We had, therefore, covered a little bit of it.

I will now move to the members, who will have seven-minute slots. Deputy McAuliffe will go first.

Photo of Paul McAuliffePaul McAuliffe (Dublin North West, Fianna Fail)
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I thank all the witnesses. Some of them drifted into some of the areas we have discussed in the Planning and Development Bill as well. It is always an issue in housing that one area will touch so closely on another. There are so many different aspects to it. I will focus on the topic of modern methods of construction. I raised this point at the last meeting. We have been dealing with the concept of modern methods of construction since they were first mooted as being a solution when Ballymun was built. When south Finglas was constructed in the 1970s, there were elements of prefabrication in that. The more recent phase, certainly during my time, was from 2015 onwards, when the Dublin Region Homeless Executive put on display a large number of potential modular-type builds, including multistorey apartments etc. In 2019, the then Fine Gael Government constructed some homes in Ballymun and in south Finglas. Therefore, there is some experience of modular construction in my area. My question is for each of the witnesses, but perhaps first for the industry. Given the length of time that this has been rattling around, why is it not something that construction companies have been quicker to lean into? This is particularly given the costs on the construction side.

Second, has the CIF given any consideration to whether the registered employment agreements or sectoral agreements apply to off-site construction? From the perspectives of many construction companies, while the sectoral agreements provide an assurance for employees, they also provide an assurance for reputable employers who are not competing against those people who are trying to exploit low wages, etc. The question is, are those people who are taking part in prefabricated construction off site in factories also covered by the registered agreement, or has there been any consideration of that?

My last question is to all three witnesses who can jump in as appropriate. Given that we engaged in this construction of modular builds as late as 2017 and 2018, and given that several areas have been examined, has anybody gone back at the quality or the delivery in that case or its cost benefit? When I asked the OPW last week, I was surprised that its representatives said they did not go back to look at were effectively 2-D modular builds. It was only two or three years ago. I am surprised by that. Have any of the witnesses' organisations looked at what happened there from a professional perspective and at how it can be improved on? We might lead first with the representatives from the CIF.

Mr. Tom Parlon:

I will start off. I thank the Deputy for the question. The construction industry is traditional to its core, not just in Ireland, but all over. That may be one of the reasons we are not moving on. One needs very substantial upfront funding to develop a modular factory, which it effectively is. I have been to see a number of them and I am aware that some of them are part of bigger organisations and some of them are attempting to fund themselves. You then need a pipeline surety. If you are manufacturing cars, you will know before you turn on the line that there will be demand for them at the other end. That is something that still needs to be done.

Earlier, my colleague mentioned the need for standardisation through standards etc. The investment has been a factor, as has the surety of the pipeline. Who will fund a big operation unless it is guaranteed? In fairness to the OPW regarding the crisis with housing Ukrainian people, it embarked on a particular programme. It gave an opportunity to the industry, which I think is responding very well. I have seen some of the units that have turned out. Of course it has been delayed. I know Ciaran O'Connor was before the committee on the last day. The bulk of the delays were to do with sites that were not ready. There are lots of units that are ready to go on-site immediately.

That will be an exemplar for the industry. Pricewise, they will not be any cheaper than what you would get via the traditional means. However, it is an exemplar and it is important in terms of the quality of the units, the siting, the landscaping and the final product where people are going to live. I heard Deputy Ó Broin say recently that this should be employed to provide other houses as soon as that pipeline is up and running. The pipeline is essential. It is good. The industry sees it as very positive that the OPW have set out for 750 units. Maybe, when Deputy Ó Broin takes over as Minister for Housing, Local Government and Heritage, he may talk about 7,500 homes and that would give a great opportunity. I know Gerry McCaughey, who comes from the Deputy's own background. Do you remember where he came from? He established a very substantial business in California. He sold out, I believe, to some other big player. He had a design office in County Monaghan and there were 40 people there. These were highly qualified people and unfortunately the business was wound up-----

Photo of Paul McAuliffePaul McAuliffe (Dublin North West, Fianna Fail)
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This is just on the point of the registered agreement and pay levels.

Mr. Tom Parlon:

Yes, with the sectoral employment order, SEO. Obviously, an awful lot is in development. The whole procurement rules will be essential. If you are setting out a site and building by degrees, you can extend the procurement and the payment. However, the day that you drive out of the factory - and I have seen one of the industries delivering units to County Tipperary - a fleet of trucks will drive out of the factory with the entire finished unit. There is therefore a massive investment and they need to be paid upfront before they leave the plant. Likewise, the SEO does apply to sites at the moment. Certainly, it is something we have found positive for the industry because it means everybody pays the same rate. There is no advantage to anyone. That is something that has to be developed. At the moment it does not apply-----

Photo of Paul McAuliffePaul McAuliffe (Dublin North West, Fianna Fail)
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Is it the case that it does not to those people who are assembling off-site?

Mr. Tom Parlon:

It currently does not apply to off-site.

Photo of Paul McAuliffePaul McAuliffe (Dublin North West, Fianna Fail)
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I know that I am short on time. I raised a question as to whether the delivery in more recent years on those modular build sites have been looked at from a professional perspective in recent years. Has there been investigation from an architectural perspective or from a design perspective in terms of the modular builds that were built in 2018 and 2019?

Mr. David Browne:

The area I work in, particularly the areas of critical and industrial facilities, there is a great cost benefit and there is a substantial use of off-site manufacturing. While it is not necessarily cheaper for the individual component, the great benefit it brings is a faster construction period. That gets the facility up and running quicker. That has a substantial benefit to it.

Photo of Paul McAuliffePaul McAuliffe (Dublin North West, Fianna Fail)
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But it is the case that as bodies, they have not looked at the modular builds that have been built in more recent years?

Mr. David Browne:

In terms of housing?

Photo of Paul McAuliffePaul McAuliffe (Dublin North West, Fianna Fail)
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Yes.

Mr. David Browne:

That would not be a matter for me. I think perhaps Mr. Kirwan might have a view.

(Interruptions).

Photo of Paul McAuliffePaul McAuliffe (Dublin North West, Fianna Fail)
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Is that not one of the issues? There is a policy decision from the State to build modular homes. They have been built and now another arm of the State is making the decisions to build modular homes, but no learning is being passed from one to the other. While that may not be a matter for the witnesses, it is perhaps a matter for the two Departments. However, from a professional perspective, we need to be learning constantly if we are to have modern methods of construction. One way of doing that is looking at what has been completed.

Mr. Pat Kirwan:

Just to come in there, from a lessons point of view, the RIAI has launched guidance on design for manufacturing and approved assembly. One of the biggest aspects of procurement and the measures of procurement are not just from the point of view of construction but also from a design point of view. If we as an industry look back at how those houses be procured at public level, design stage and through construction, we can see that they are almost siloed. A big lesson we have learned is to bring those together, to remove those silos and to come together with one approach to procurement. That includes design, construction, articulating the benefits and really driving forward.

Photo of Paul McAuliffePaul McAuliffe (Dublin North West, Fianna Fail)
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I think I am testing the Cathaoirleach's patience.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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Yes, the Deputy is out of time. We will move on to Deputy Ó Broin.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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I thank our guests for their presentations. Sometimes when we are discussing very technical matters, we can sound very dull. That is a mistake in this instance because I think the conversation we are having today, and the one we had in our most recent meeting, are an enormous opportunity. We need to reignite some of the excitement about it. Deputy McAuliffe is absolutely right that we need to consider lessons from our own past. We can, however, also look at some of the exciting buildings that are being built with new building technologies around Europe at the moment. Not only are they cutting edge and fast to produce but they provide very good quality homes in communities with much lower embodied carbon. There is such exciting stuff happening.

I will bring three projects to the attention of the committee. Mr. Stevens will know the low impact living affordable community, LILAC, in Leeds, which comprises 20 units of low-impact and low-carbon community-led housing. It provides a wonderful model for how this could work. On a much larger scale, Dalston Works in London is ten storeys tall and comprises 121 apartments. It is almost all cross-laminated timber. That is cutting-edge building technology. The best example, and one I have previously mentioned at this committee, is a Barcelona development, La Borda, which comprises 28 or 30 apartments and some co-working space. Not only has it an energy efficiency to die for in respect of embodied carbon, it was 30% cheaper to produce, while not compromising on any standards, than a traditional apartment build of the same size and covering the same space. While Mr. Parlon is right that these units are not going to be any cheaper now, that is because we are not developing them at scale. If we were able to develop high-grade and low-carbon timber-based products at scale, not only would the build be high speed and low carbon, there would also be cost efficiencies, as well as the development cycle. This is such an important area that we should not get lost in the technicalities.

I have three specific questions and if there is not enough time now for everybody to respond, there will be a second round. My first question is for Mr. Browne. I agree with his broad presentation. In respect of the State's architecture policy and public procurement, what specifically can we do to ensure a mandated pipeline of contracts can be put in place? Perhaps Mr. Browne will go into a little more detail as to what he would like to see in that regard. It almost seems as if it is the pipeline we now need and the certainty that contracts will be made available to allow industry to scale up, year after year.

I have a question for Mr. Stevens and Ms McManus. I am interested in the overlap between architecture, building technology and that kind of community-led housing model, in terms of affordability. I know both Mr. Stevens and Ms McManus are involved in that. Perhaps they will share their thoughts.

I have to ask a difficult question of Mr. Parlon because at some point in the future, he will not be with us. An increasing use of timber and low-carbon technologies also means we have to use less of the high-carbon technologies, particularly dirtier cement. We have very good low-carbon cements but we need to start having a conversation with the cement industry. As we scale up timber and low-carbon technologies, how do we, in a structured and constructive way, shift the high-carbon building materials so that it is done in a planned manner without any disruption to jobs and economic activity? Perhaps we can have quick answers.

Mr. David Browne:

On the setting of mandated targets, the Government is in a very strong position because it sets policy and is the biggest client in the State. I understand that the UK is aiming for an initial level of 25% of public sector new builds to be built by modern methods of construction, MMC. I assume that will grow over time. There is a need to set mandated targets as soon as possible so we can encourage the use of MMC. I am also working on a roadmap for circular construction in the country. I believe we will also have to mandate that in order to in any way achieve our sustainability targets. Mandating is one thing.

If we are producing 30,000 to 40,000 units per year, it would seem there is an opportunity to take 10,000 as a target and between the public and private sector, guarantee a constant pipeline of delivery of a minimum of, say, 10,00 units per year, which would give a manufacturer the incentive to set up and begin to produce at scale. Those are the two points I wish to make.

Mr. Dominic Stevens:

One way to think about community-led housing and affordability is what is expected by the client. The Mitchell McDermott report that came out last week showed that apartments in Utrecht were delivered to the end user not in a turnkey situation but without kitchens and flooring. That is something within the community-led housing sector that reduces prices and costs. The people living in the houses do what they can afford when they move in. They would, in general, be happier with the finishes they put in place.

The work we have done with community groups shows they are interested in as minimal sizes as the regulations allow, and would go smaller if the regulations allowed for it. They recognise that clever design means that a house does not have to feel small. That speaks to the scope to reduce things within the regulations. One is always put upon as soon as one says that, but the people who are going to live in the houses are often happier with that.

Ms Claire McManus:

We have, over the years, talked to a number of community groups which are looking to run a community-led project. The level of risk is very high for them as they move through the process. Upfront investment is required. When we talk about construction risk, what we mean is uncertainty at the start of a project for anyone, be that a community or a developer. When one is looking at a site, one has no idea whether it will fit 20 or 40 dwellings. Any time there is risk, there is profit because you have to allow for a worst-case scenario in your plan, and anything over and above that is profit. That risk and uncertainty are adding to the costs. That is putting off smaller players and, in particular, community groups. That is sometimes happening when community groups are halfway through the process and have already invested significant money on design teams, etc. This goes back to the points that Mr. Stevens raised earlier about creating certainty and predictability in the planning system. If that was in place, we, as a design team, could offer some certainty to a community group that there is a three-dimensional development plan in place. We could tell community groups that they will get two-, three- or four-storey dwellings on a particular site and be able to say they will more than likely fit 30 units on a site. Those groups would then be able to plan around that. The system at the moment is so uncertain that the value proposition is not great for anyone but that is particularly the case for community groups that do not have money to gamble or time to invest in such a long process.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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The representatives of the CIF have one minute to respond to the Deputy's question about high-carbon materials.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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Mr. Parlon has given Mr. Downey the hard question.

Mr. Sean Downey:

We are talking about three main streams of materials, namely, timber, light-gauge steel and concrete. Millions of cubic yards of timber are standing in Irish forests. They have been grown with Irish supports for the past 30 years. As a country, we need to decide what we are going to do with it. I know Enterprise Ireland has been working with the timber sector on that specific value stream in recent years to get ready. One of the challenges is Part B of the building regulations, which relates to fire regulations and the restrictions on the height at which combustible materials can be used. We need a more technical approach to provide a technical solution, whether an active or passive means of fire suppression. If they can do it in other countries with similar codes to ours, there is no reason we cannot be using a lot more timber. That will go a long way to solving a lot of the issues of embodied carbon.

Light-gauge steel manufacturers would say they are almost better than timber. It may not look like it on the face of it, but at the level of the circular economy, on which Mr. Stevens is doing a lot of work, that steel can be reused at the end of life. In many circumstances, it may be more beneficial than its timber counterpart.

In respect of cement, the industry has, in recent years, started to look at alternative and sustainable ground granulate blast-furnace slag, GGBS, supply chains. The sector is already working on that. However, we are going to have to move in a graduated way towards hybrid systems before we can say we do not need cement or concrete any more.

Photo of Emer HigginsEmer Higgins (Dublin Mid West, Fine Gael)
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I thank the witnesses for being with us today. MMC is going to be the future of this industry. It is about using technology and innovation to deliver badly needed homes quickly and at scale. We obviously need the products to make that happen but we also need the workforce. I heard a representative of the CIF on the radio this morning mentioning the Intreo fair that took place on Friday. There was a construction skills and future build initiatives exhibition in the National Basketball Arena in Tallaght.

Adrianne Mooney, Siobhan Lawlor and their team did an excellent job. I really enjoyed the event. It was great to get to see how many people were interested in working and upskilling in this area. It was also interesting to chat to so many companies – big companies and smaller contractors – that were all investing in upskilling and modern methods of construction. I wish to call out and recognise St. Andrews Resource Centre which is training hundreds and hundreds of people in construction work and getting them onto sites. It is doing an incredibly special initiative at the moment.

I was at the 2016 exhibition in Dublin city that Deputy McAuliffe spoke about. There has been no denying that Ireland has been slow to catch on. It is interesting to hear the recommendations about what we can do to change that. I am hearing that design and construction processes need to change, procurement strategies need to be updated, planning systems need to be more consultation-led in order to avoid delays through appeals and that situation, and the talent and the skills need to be developed. However, ultimately, the culture needs to change. If the culture changes, there is then a pipeline of demand and, therefore, there will be an increase in production and things will happen in a more streamlined way as quickly as possible. We heard suggestions today around planning codes, grants, training, standards and investment needed. I would be interested to hear the three key takeaways from each of the witnesses around what we can do quickly to help us on that pathway. For example, what grants need to be put in place? What has to happen from a procurement perspective to streamline things and make it happen more quickly? What needs to happen immediately around design? If there were short-term measures that members could put the Government under pressure to invest in, that would be beneficial. We all want to see things happen in this area and things move forward quickly.

Ms Claire McManus:

I thank the Deputy for her question. The Department of Housing, Local Government and Heritage is working on proposed new compact settlement guidelines, which have the potential to help. We have a housing crisis on the one hand and a climate crisis on the other. If the housing crisis was 20 years ago, the solution would be to zone hectares and hectares more land, and we would have supply now, because building suburban sprawl is viable. It is very cheap. Delivering a garden is very cheap and it has a value. Instead, small, awkward sites inside a town or city need to be delivered as housing. They are much more expensive. Also, we are talking about delivering housing next to existing communities and neighbourhoods, so that has to be done in a win-win, positive manner. That takes a lot of investment and, in many cases, subvention. If the value of the homes is less than the costs to deliver, they just do not happen. We would like to see a situation where, if there is a planning application beside an existing neighbourhood, the people living there are pleased because that means there will be a high-quality public park, good urban realm, it will be pedestrian friendly and all that type of thing. That takes investment. It is important that urban realm gets the right level of standard and investment in the new standards that are being developed. Part of those standards are to reduce garden sizes, reduce the quantum of parking spacing and reduce back-to-back distances, which is about fitting more dwellings on the same space. We also need walk-up standards. Across most of Europe, the answer to the affordable housing question is to allow walk-up apartment schemes three and four storeys in height, which we cannot have here. That has to be part of the solution. My solutions are not focused on the MMC, but we need to acknowledge that providing solutions to the climate crisis has made solving the housing crisis more expensive. That needs to be addressed head on.

Mr. Pat Kirwan:

From a design perspective, in respect of skills, we need to look at a number of areas. This is where the RIAI recently launched the design for manufacture and assembly, DfMA, guidance note, where we broke it down in terms of understanding design standardisation linking manufacturing, looking at sustainability and introducing digital delivery – bringing all of those three together.

It starts out with the designer. The designer designs and has a direct impact on what is being constructed. Do we know from a sustainability point of view what the impact of a particular construction material, system or build-up is? From a skills point of view, we have a significant skills deficit in respect of understanding the embodied carbon aspects. At the moment, if we look at the climate action plan, within residential construction, we have a target of 40% reduction in carbon emissions from 2018 to 2030. Whether that is achievable is open for debate. At the moment, we have no measurement methodology in place to say what we are doing. Where is that? How do we get that going?

Equally, in respect of digitisation, we have the build digital project, which needs to take hold and drive forward digitisation. There needs to be national standards and national upskilling, etc. For a number of years, the Charter Institute of Architectural Technologists, CIAT, and the National BIM Council have been calling for a building information modelling, BIM, mandate. That needs to be addressed. We need to understand from a designer’s point of view the impacts of standardisation and standardised designs that will optimise. We need to drive it forward in an efficient way that also addresses the aesthetic design. We are not reducing the quality of design; rather, we are improving it through standardisation.

Mr. David Browne:

adfadf

(Interruptions).

Mr. David Browne:

If this is to be done at scale, we need the mandate and pipeline that I mentioned. It would be helped by two other things. One is introducing a requirement as soon as possible for whole life carbon assessments with all planning applications. That would begin the drive towards more modern methods of constructions. Again, I highlight the need for planning certainty, which is a problem at the moment. It could be helped perhaps by devolving responsibility and accountability for delivery of housing to local authorities. It might help to encourage localisation of the industry around the country.

Mr. Sean Downey:

I can wrap up quickly on this. I have three simple messages that are a bit repetitive. The first is standardisation. In respect of the Department of Housing, Local Government and Heritage’s guidance note that was sent out recently on the 1,500 units across 35 local authorities, there should be an A and B and that is it. The exact same two-bedroom apartment or three-bedroom house should be delivered in Carlow that is delivered in Leitrim. There is no reason somebody should be thinking about slightly different colour of tile or wall finish. The companies will call for capital expenditure investment, but if you create frameworks and give them certainty that they will get a certain number of units, they can look at building and scaling. They will not get money or be able to invest unless they know they will get orders. That is the lesson of Legal & General in the UK - the failure that just happened last week. It could not keep sustainable demand coming into the factory floor.

The last one is skills development. The Deputy asked the question and that is important. There are many people who want to work in these factories. They are almost all west of the Shannon. They are definitely outside the greater Dublin area. It is a brilliant opportunity for local employment for high-value skills and nice working conditions. People want to work there but it is important that we keep developing perhaps new trades and traineeships with the education and training boards, ETBs, in particular, that are all regionally focused, to give those people the skills that they need.

Mr. Tom Parlon:

I wish to say one final thing. Public acceptance-----

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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As quickly as you can, Mr. Parlon, because I have to stay on time. Go head.

Mr. Tom Parlon:

There was strong opposition to modular homes for Ukrainians. I think it has as much to do with modular building and this notion it was going to be something cheap and substandard. I hope that when these homes arrive on site and prove their quality, the public will begin to accept modular housing as well.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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That is a good point.

Mr. Browne answered my first question a moment ago. It is critically important that the carbon assessment is done at the planning and construction stage.

People want to buy an A-rated home. That is the running life of the home while they are in it. People also want to know that the construction and methodology used also contribute to that. Aside from the climate objectives we have, there is probably also a marketing opportunity when a house is low efficiency but low on carbon in construction as well.

In regard to affordability, many people watching would like to know about MMC. We hear there are many various aspects to MMC. I was at the Coillte presentation in Avondale earlier in the year. It indicated fewer people on site and quicker assembly. If less time is spent on site, if there is less construction waste and if we see the build is quicker, how does that not transfer into affordability? Where is the cost absorbed into that? I will ask CIF to reply first.

Mr. Sean Downey:

MMC or off-site manufacturing offers a major advantage in regard to the programme and a potential advantage in regard to cost from the damp-proof course up. They do not influence. Someone building a factory unit, whether it is a two-deep panelling system, brings in everything from the damp-proof course up. Perhaps many of the challenges are the soft issues to be dealt with such as access to the site and getting planning and utilities such as Irish Water and ESB lined up.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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I apologise for interrupting Mr. Downey. The Society of Chartered Surveyors Ireland, SCSI, did a report last year. It broke down the costs into 48% hard costs and 52% soft costs. Would there be an impact on the 48% hard costs with MMC?

Mr. Sean Downey:

There should be a very significant benefit from using MMC if we get the scale.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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I will move onto scale now. What is suggested by that mandate is, if we are going to start ramping up to 40,000 homes per year, which is what is needed to produce through various methods, and if we were to set that target at 10,000, we probably do not have capacity within the MMC manufacturing base in the country at the moment. It is a chicken and egg situation. We would have to have surety that if someone was going to invest in the factories and the training that the 10,000, or the 15% or 25% in the UK, would happen. How do we bring those two together?

Mr. David Browne:

It will have to be phased in. It is not possible just to flick a switch and produce it because we have virtually no capacity here at the moment. First, the mandate for, say, 25% of public buildings to be MMC would start things moving. In two to three years as the industry matured and began to get confidence, that would then allow the introduction of a pipeline. The components of the pipeline are between the public and the private sector. Big house builders should be involved. There is the possibility of collaboration between public and private sectors to develop a pipeline rather than leaving it just to the public sector.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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It is not a magic solution for provision of thousands of homes; it is just another method of construction. We have to be realistic about the numbers. Is this a five- to ten-year timeframe to scale up to start hitting those targets? Where does Mr. Browne believe we should realistically pitch that figure at?

Mr. David Browne:

It comes down to money. Enterprise Ireland has taken up a role in the delivery of housing. Perhaps some funding from that might begin to assist manufacturing companies to set up to produce the housing. That is one area that might help to accelerate it to a lower timeline than five to ten years. Again it is a matter of building up confidence in the industry. We are moving from the assembly of a car in the garage to the Ford Model T approach. That is the period we are in at the moment.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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What Mr. Browne said about building design is similar. The Ford Model T produced good quality and a lot of it, available in any colour. He mentioned that disadvantage. They were all the same colour.

I have a question for Mr. Stevens. Last week, we discussed building regulation standards, Part B and the technical guidance as well. It was not entirely clear that much progress has been made on that. I acknowledge a working group is working on it. If someone asked to have four-storey timber CLT building built, would it be possible to do that in this country?

Mr. Dominic Stevens:

As I understand it, not with confidence. A way might be found to understand building regulations to allow it but as a professional, it would be going out on a limb. It is around combustibility and how that is measured.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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It was suggested to us by the NSAI, but I am not certain it was NSAI, that it is possible but difficult. That is probably off-putting for people. As practitioners, what is the view about what we need to do with Part B? Is it just Part B? Are there other structural issues we need to consider as well in other parts of the technical guidance?

Ms Claire McManus:

I am tempted to defer to Mr. Kirwan on that question because mostly we work in the two- three- and four-storey realm in our office.

Witness Another:

That is for the reason that it is uncertain for our plans.

Mr. Pat Kirwan:

It is not a new construction methodology. A number of high-quality buildings in London are currently being built at scale and with height with CLT. From an engineering point of view it could be argued that the nature of CLT itself requires attention and careful consideration of the various interfaces. From a fire point of view, all of the junctions and interfaces would be carefully considered in terms of fire barriers, connections and all those points. We can look to particular manufacturers in Scandinavia who have reams of test data relating to fire testing, particular CLTs, understanding charring and what the rates are, and then implementing that. If we take a fire engineering approach as opposed to following particular guidance in Part B, a fire engineering approach understands that if we go this way potentially there are sprinklers, or it might be a hybrid system where there might be a concrete escape core staircase, and then have CLT around that. It is certainly open for review in my instance. Perhaps other aspects of the industry might disagree with that in one sense. However, at the moment I am not aware of any particular large-scale residential development that would have even applied for a fire safety system.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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Is that because they are dissuaded from doing it since it is difficult? Is the CIF involved in the working group examining Part B and how to overcome the potential barriers for building with timber?

Mr. Sean Downey:

We are aware of it. We worked with Enterprise Ireland on the initiative over the past number of years and fed into that on the submission for Part B in order that we are all aligned. What we all ask for is, referring to Mr. Kirwan’s point, that it is a fire engineering solution. We simply do not have a black and white rule whereby combustible materials cannot be used over 18 m. It has to be allowed for people to push forward. I attended the Coillte event as well. The approach of the agency from British Columbia to dealing with consultation was very interesting. It seemed it was not coming with a vested interest. It explained exactly that it was trying to move from four to six storeys and then from six to ten and the way its consultant brought the fire officers in. They are people who have to go in at 3 a.m. on a Sunday to try to get up the means of escape to bring people out. There is a way of doing it.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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I have to keep myself to time as well. I call Deputy O'Callaghan.

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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I thank the witnesses for coming in and for their contributions. I want to look at the issues of the mandated targets. Was the proposal for 25% of all new builds or public new builds?

Mr. David Browne:

I suggested public builds as the Government has control over that. There is a possibility, of course, to bring it in for the private sector as well over time. To an extent it is happening in certain sectors. The healthcare and education sectors are already embracing MMC, as is the industrial sector. There is a certain amount happening and a certain amount to be built on.

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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With regard to public builds, does that need to be done at the planning permission stage, or later?

Mr. David Browne:

It has to be done at inception or briefing stage, when the tenders are going out for the initial design. If a building is designed for MMC at the start, it can be converted to traditional, but that cannot be done the other way around. There is a need to have the mindset of standardisation right from the start. It would have to be from the very beginning.

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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As regards public procured housing through the system, the end user, whether public or private, is not necessarily known at the start. The end user is known from the start in the case of properties that are built directly through a local authority or AHB leading on the scheme but that is not the case for private sector builds and that are sold towards the end to a public end user. One of the challenges is how to get in at that point into those kinds of builds, which is a significant amount of delivery. Even putting that aside, 25% of 10,000 homes, to take that figure, is still just 2,500 homes. That is not the kind of scale we want to reach.

Mr. David Browne:

Indeed. It is a starting point. There is something of a chicken and egg scenario. Frankly, I would love to see it going far higher than 10,000 but that is a good medium-term target.

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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I have a related question for the CIF. It is clear there needs to be certainty for the industry and there needs to be a pipeline. This is a suggestion regarding how that could be the case be if there were mandated targets. What is the CIF's view? If there are no mandated targets, how can that certainty and pipeline be achieved?

Mr. Tom Parlon:

It would make sense. The Government is currently the big customer for housing and it has the capacity to make that call. As Mr. Browne stated, it is a chicken and egg scenario. There is no point in mandating 25% if we do not have the capacity. It will have to be built up by degrees.

With regard to the contract for the modular units for Ukrainians, I am sure Ciaran O'Connor has learned a lot. He is a professional guy with long experience. I am sure he and his team have learned a lot from the time they started up to now in terms of the design and turning it out and so on. It is a learning process. If they choose to do another 7,500 now, they will now that the capacity is there. Some of the companies may have struggled while others have thrived in terms of that competition and opportunity. There was competition to see who would get the bulk of them. Whatever company made the first 20 clearly stated the quality is good and it is ready to deliver another 20 and so on. Some of the companies struggled to deliver them. It will be a process but the State will need to have the impact that-----

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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Before I move to Ms McManus and Mr. Stevens, is there logic to having mandated targets that apply to the public and private sectors and are phased in over time? Is that a way of delivering certainty or is it too prescriptive?

Mr. Tom Parlon:

Reference was made to timber frame homes. They are being maxed out at the moment. The capacity for timber frame homes is being used to the fullest extent and the rest of the homes have to be delivered without timber frame. If there was more capacity for timber frame, it would be used. That is a practical situation. It certainly speeds up delivery. It has to be cost-effective. The shortage of basic skills such as block-laying and plastering is a challenge. It is quite expensive to do that. Timber frame lends itself to the economics of doing it at the moment. The challenge is that a full modular would be equally able to offer that.

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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I thank Mr. Parlon. What is the view of Mr. Stevens and Ms McManus on having mandated targets phased in over time? Is there a logic to it or are we better off addressing this from other angles?

Mr. Dominic Stevens:

Much will depend on how it is defined. We have a number of 100-plus unit sites for which it is all off-site timber frame manufacture, which, in effect, is MMC. It depends how that is defined. In the world of private developer housing, the thing that stops it being purely MMC is that consumers want something that feels like a concrete block outside, so developers start on-site building for that reason alone. The core of the buildings we are doing, however, are all off-site MMC timber frame.

Ms Claire McManus:

On that point, the general received wisdom is that built-in concrete block is cheaper but it takes longer, while timber frame is a little more expensive but much faster and, overall, a better value proposition. At the moment, however, one of the biggest challenges is finding sites on which housing can be delivered viably. In that context, "viable" means that the cost of delivery is equal to or greater than the value and-----

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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I have a final short question.

Ms Claire McManus:

.The problem with moving to mandated full MMC is that if someone has all this capacity but cannot find a site, it increases the risk. I suggest letting it work in the public sector first and be proven there and then move mandated-----

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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If I may, I will come in with a short question to finish.

Ms Claire McManus:

Sure.

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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With regard to mandated targets, to what percentage are the witnesses referring?

Mr. David Browne:

The 25% figure is-----

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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No, I am asking how much of a house has to be off-site construction to fit a target? Has that been considered?

Mr. David Browne:

We probably need to consider that as there are seven different types of MMC. I suggest it would have to be more than 60% to make it any way viable and a decent target.

Photo of Cian O'CallaghanCian O'Callaghan (Dublin Bay North, Social Democrats)
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I thank the witnesses for their contributions.

Photo of John CumminsJohn Cummins (Fine Gael)
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The last point made there is important. There needs to be an education piece done in respect of what MMC actually comprises. The first timber frame houses built in County Waterford were developed at Farmleigh more than 20 years ago. At the time, people said it was not going to work and these were matchstick houses that would never take off. Mr. Parlon stated that the ability to provide more such houses is now maxed out, however. His comment to my colleague, Deputy Higgins, regarding proven concept and evidence of good quality is an important part of all that. Over time, when people see these are robust and liveable houses of the highest quality, rather than being an inferior project, that mindset will change. The 3D modular in terms of the Ukrainian piece will have that desired effect.

In his opening statement, Mr. Parlon made the point that 50% of scheme homes delivered in 2022 were 2D timber. This ties in with the comment in respect of timber being maxed out at the moment. To what exactly is he referring in terms of scheme homes? Obviously, it is not 50% of units delivered via all methods last year. To what exactly was he referring?

Mr. Sean Downey:

By scheme homes, we were referring to residential. It is semi-detached and detached homes using the timber frame 2D panelised system. Half of the number of houses built on those estates were constructed using a timber frame solution.

Photo of John CumminsJohn Cummins (Fine Gael)
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Does Mr. Downey have global numbers in that regard? To what does it amount in terms of delivery in 2022?

Mr. Sean Downey:

It is just under 8,000.

Photo of John CumminsJohn Cummins (Fine Gael)
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As regards timelines for delivery, last week the committee heard about 3D units and the associated delays relating to site identification, groundworks and so on. I regularly speak to developers in Waterford regarding delivering schemes. I am thinking of Kent construction, for example. It has a fantastic system in place that is very similar to what Glenveagh Properties is delivering in terms of timber frame and durability.

Their ability to erect to roof level in 14 weeks is phenomenal. It is a process. They would say you need to have the book so you are able to do a certain amount in the year. They have their systems down to deliver 60 units, for example. I asked this question a couple of weeks ago. The difficulty is that if they want to increase, they have to double. They cannot just go from 60 units to 70 units because their systems and processes are so refined that they would need to double their metrics. Is there a medium way of achieving a higher volume without doubling? How do we overcome that? You might have a developer who cannot do 120 units under their order book, but could do 90 units. However, they are confined to 60 units because their systems are set up that way. How do we broach that difficulty?

Mr. Sean Downey:

The Senator asked a question about the number of timber frame homes at the moment. We are talking about 8,000 units from a total of just under 30,000 last year. We estimate, in terms of off-site manufacturing, that the percentage is somewhere in the range of 30% to 33%. There are almost 10,000 units using precast concrete, twin-wall systems, hybrid systems or light-gauge steel, and then timber frame. Your local developer might say he is not quite sure the capacity is there. He has been to the factory and knows that they need an order of 60 units per month or they will not build capacity. Numbers are possibly heading much further north than 30,000, in terms of what Housing for All currently says should be supplied into the system. The off-site manufacturing industry is able to deliver 30% of what is required at the moment. It is not just a mandate. It is certainty. The industry needs to see a framework and to be guaranteed to get 500 units in its factories. At the moment, they are doing 250 or 300. They will build another 50% extension. New factories will grow and people will invest because there will be certainty in terms of growing scale. It is not just guidance or a statement of intent. It is an actual order. That is where the Department of Housing, Local Government and Heritage guidance note on the aspirations for these 1,500 units is really important. It is important to take maximum advantage of the small number of standardised units, which can be sent out to a number of factories and done to scale.

Ms Claire McManus:

The game changer would be if the timber frame were the inner leaf and the outer leaf of the building. What goes up very quickly in a 24-hour period is just the inner leaf, which is half of the wall. Typically, on the outside there is a brick leaf or a concrete block leaf. You bring in all the trades you would have for a conventional construction. If those panels were to be closed panels with the inner and the outer, that would tick the building regulation review box. It would also win the hearts and minds in terms of what people expect when they get a house.

Photo of John CumminsJohn Cummins (Fine Gael)
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That is an important point. At the end of last year I visited the CEO of Medite Smartply in Waterford Port. I raised the question of how to test that in Scandinavia. He pointed to Scotland and what they have managed. I have previously mentioned it at this committee. I know we are also going to explore the ability to go higher. They have achieved it. The CEO showed me the footage and the test data to support it. We are not looking to reinvent the wheel. Capacity is key, and how we build it is of the utmost importance. It is a bit of a chicken-and-egg situation. The State has to lead, but the private sector also has a significant role to play in diversifying its models and refining its processes to streamline them in a more efficient way. In time that will result in a lower price, but in the initial phases it will not. You do not have the scale, if you look at it in terms of the Ryanair model of house building.

Mr. Martin Searson:

You have to think that this is a production mindset. They are carrying fixed capital costs. In traditional project management, they can move labour and staff. If they are stuck in a factory based in Ireland, they need to have constant throughput in their factories. They might get an order for 40 units, but could be sitting idle for five or ten weeks with no order. They need another batch order. They are constantly chasing work. That is what we talked about with certainty and the volumetrics. They have preventative maintenance in case the machines or tools go down in the factory. They refine their processes and Enterprise Ireland helps them with the innovation voucher. They work in a lean manner and they have looked at how they orientate the factory very well. They have learned over the years not to move the modules or components around, but to move the labour force around them. They have feeder systems. There are people and labour as well, which they have to carry and pay for every week. That must be taken into consideration.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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I thank Mr. Searson and Ms McManus for clarifying about timber build. For people looking in who do not have the technical knowledge, they might hear that figure of timber frame construction and not realise it is a concrete block on the outside. We can apply the same question of how much was timber frame inner or twin wall as I think it was called.

Ms Claire McManus:

It is a cavity construction. Traditionally, that is a concrete block on the inside, a cavity with insulation and either brick or concrete block on the outside. With a timber frame the inner block leaf is replaced with a timber frame panel.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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If we were to ask how many were done without that outer block leaf, as with the one Ms McManus is describing as fully timber, we would have a much lower-----

Ms Claire McManus:

It would be tiny.

Mr. Dominic Stevens:

If you look outside the State across Europe, there would be none with this concrete block on the outside.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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That is an interesting and important clarification.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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We have spoken about cross-laminated timber. There are Irish companies which have developed their own products that are fully timber with low-carbon based insulation. Lidan in County Roscommon, for example, has a very good product. It has been used by the Department of Education and some local authorities, as well as the private sector. It is just one of a number of companies. Their problem is they have all the same constraints as the others. I have a couple of observations and then some questions.

Standardisation is not a new thing. Sometimes when we have these debates we forget this. All of the old Bord na Móna houses, the Irish Glass Bottle houses and the 1960s corporation estates look the same everywhere. We have two 1960s corporation estates in Clondalkin, where I live. You would pay €400,000 for one of those homes now. The Irish Glass Bottle houses in Templeogue now cost €600,000. These were really well-built standardised products. It is important to remind people that some of the best housing we ever built, particularly the best public housing, was standardised and there was nothing wrong with it. On the fire safety issue it is important to send clear signals to the public. I spoke to senior fire safety and building control officials, who told me that of course we can go up to 20 m with a fully timber product. You may need a concrete core, as Mr. Downey has said. If you go above 20 m, you may need sprinkler systems as are now being installed in apartments. There are fire safety solutions, which our own building control and fire safety professionals know about or advocate for. You can therefore have both lower carbon timber and the highest possible fire safety. Some recent battles the fire brigade has had over complex buildings show the solutions provided through sprinkler systems and other things. On the mandates, I think of this slightly differently. Public procurement should positively incentivise the best possible products. It should therefore say, in the procurement scoring matrix, that the lower the carbon in the products, the higher the matrix and the higher the likelihood a particular company will get the tender. That way a clear signal is being sent to the market that this is the direction of travel. Mr. Downey is also right that multi-annual framework agreements provide that certainty. You know you will have a pipeline of work. It is also more cost-effective for the State. We should be doing it with all public procurement works, but particularly for this. It picks up on what Mr. Searson is saying about knowing you are in a five-year multi-annual framework agreement that guarantees a certain number of units per year, and is expanding each year. There will be 500 units in the first year, 1,000 the next year and 1,500 the year after. We can start to move from the 700 units that have been done, albeit at 44 sq. m for the Office of Public Works and the Department of Children, Equality, Disability, Integration and Youth, to 1,000 or 2,000 two-storey units of 90 sq. m.

There are smart ways to use public procurement positive incentives and multiannual framework agreements. The committee should consider mandates in the area of low-carbon cement. We do not require our utility companies such as Irish Water or the ESB to choose low-carbon cement, whereas if they knew they had to go from 10% to 20% to 40% to 80% lower carbon cement each year, it would not only send a signal to them, but, as Mr. Downey stated, because they have to work with industry, it would also send a signal to industry that over a period of time, it will become increasingly difficult to use higher carbon cement. We will always have to use higher carbon cement in certain types of projects. There are ways of designing these systems that incentivise positive behaviour and send market signals that things are changing. The challenge is to reach 40% embodied carbon in the built environment by 2030. We are all talking in the same area about the kinds of things we would like to see. We all know the challenges and difficulties. We also know that those emissions reduction targets are not optional. They are legally binding and significant fines will be imposed on the State and the taxpayer if we do not meet them. This is not the silver bullet question. Will the witnesses give us a few key requests? If we wanted to be ambitious, not just nudge the thing along, but to have any chance of meeting the 2030 target, especially in public residential housing in which the State has more levers, what would be the ambitious requests the witnesses would make of a government that was serious about doing some of this?

Much of that is on a large scale. I want to come back to Ms McManus and Mr. Stevens as regards small-scale stuff. I like the fact that we have a lot of SME builders and communities that want affordable housing projects. What will work for the big stuff will not work to incentivise the small stuff. What changes need to be in place to allow it happen at the scale JFOC Architects is working at, as well as at the scale companies such as Cairn, Glenveigh, South Dublin County Council or Dublin City Council are working at? What should our ambition be? What should we do?

Mr. Pat Kirwan:

We need to push more innovation. We know there are environmental benefits to using low-carbon or GGBS concrete. On the flip side, it takes longer to cure. There are striking issues in terms of form work, so if we move that into a manufacturing facility for pre-cast concrete, it will potentially take longer for those pre-cast concrete panels to come out. There is a barrier to a certain degree to using low-carbon concrete and getting it out faster. We need to push innovation. How do we take that and push it on? As a few of the witnesses will be aware, carbon cured concrete is currently in use in the industry. The cement content is reduced and we blow carbon dioxide in. That creates a chemical reaction and it produces stronger concrete. As a result we have a lower embodied carbon concrete. That is innovation happening to solve carbon issues in concrete. We need to have more innovation, to look to other jurisdictions to see where we need to go as regards carbon and then to link it all together to understand the consequences of pushing particular low-carbon solutions. We absolutely need to look for low-carbon solutions, but we must think ahead and look at the consequences.

Mr. David Browne:

We also need to be looking at where we are building. We need to be building at the core of our current settlements, that is towns and villages. They have all been emptied in the past 30 or 40 years. Incentives to encourage both new construction on the many derelict sites in our towns and villages and to facilitate the revitalisation of both the ground floor and upper levels of existing buildings would be a huge help.

Ms Claire McManus:

My point is similar to Mr. Browne's but I would go a little further. I would calculate the benefit of that type of project in comparison with suburban sprawl. Suburban sprawl is currently the viable option. We must calculate the benefit of, for example, converting a factory to housing in a town where you can walk everywhere and compare it with the one-off eco-house in the countryside that requires car journeys everywhere. We should calculate the benefit of using existing schools and trains and supporting existing shops, include the results in the climate targets and find a way of making those metrics count. Then we might see the smaller in-fill stuff and the type of development Mr. Browne mentioned happening

Photo of Francis Noel DuffyFrancis Noel Duffy (Dublin South West, Green Party)
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I am grateful to our witnesses for their wisdom and time today. I have been listening to the informative dialogue in my office. I was not in the committee room. I thank them for the informative conversation. Recently this committee produced a report on embodied carbon, which set out actions required to meet our carbon dioxide targets, taking into account that 14% of Ireland's CO2 emissions come from materials in the construction industry. My questions are therefore biased towards reducing embodied carbon, the limited use of homegrown structural timber and our urban design density regulations. Modern methods of construction, MMC, is a diverse area, as noted by the CIF today. It covers building information modelling, BIM, offsite fabrication, design regulations, health and safety, upskilling across the sector, to name a few of the factors. As already discussed, one of the newest methods of construction that emerged in the mid-1990s was the use of cross-laminated timber, CLT. Approximately 25 years on, a Wisconsin architect has built a 25-storey apartment and retail tower using what is said to be a European invention. My first question goes to the CIF. Does it see a role for Irish-grown C16 timber and MMC akin to the one our EU and US friends have? From what I understand from the CIF's earlier response, it does see a role, so I will ask whether it has any hope that the Department will evolve our part B regulations to allow mass timber buildings higher than 10 m, which might allow demand to follow. I have heard 11 m is the number. That is 1 m higher than 10 m. Does the CIF think it will go above?

Mr. Sean Downey:

The Deputy raised three issues: embodied carbon, the huge supply of homegrown timber and the urban design guidelines or Part B restrictions. They are all interlinked. We have already talked about what we need to see happen with the review of Part B of the fire regulations. There must be a technically led approach to allowing people to develop fire-engineering solutions, as Mr. Kirwan referenced. It is not subjective. It is completely objective whether a building can meet the performance requirements, provide a safe means of escape and protect firefighters in the event of a fire. We have a huge opportunity in embodied carbon. Some of the larger developers are looking at the concept of a factory in a box. If they have a site of 800 units in Galway, they are talking about commissioning a local factory to deliver offsite manufacturing in the locality, whether that is timber frame or structurally insulated panel systems. We should think about the benefits they will get with respect to the carbon rating for those homes they are delivering. We would absolutely like to see urban design guidelines. We talk about more compact settlements so that a much greater advantage is obtained from available urban sites. We can build eight to ten storeys in cities like Dublin and other major urban centres to get the scale and capacity and ensure we are making the best use of the type of technology that offsite manufacturing offers.

Photo of Francis Noel DuffyFrancis Noel Duffy (Dublin South West, Green Party)
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Does Mr. Downey think the revision of Part B will allow for buildings to reach much higher than 10 m?

Mr. Sean Downey:

I could not possibly say. The Chair was at the Coillte event so he understands. There is a fear that a number of people in the timber industry or Coillte have a vested interest in driving the use of timber. The Department of Housing, Local Government and Heritage is probably looking at that and thinking that it is the guardian of standards and must ensure it offers the safest standards. A meeting of minds is needed and we need to think about the huge natural resource we have. Why would we export it as pulp or as woodchips for someone else to burn in a furnace? There is no reason it cannot be made into C16 for Irish-----

Photo of Francis Noel DuffyFrancis Noel Duffy (Dublin South West, Green Party)
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We are exporting to the UK. They are using it, so that is our loss.

My second question if for the RIAI. Considering the institute's academic remit, does it have continuous professional development, CPD, programmes in place for students or practitioners or both in the area of MCC, and in particular the advantage of using sustainable materials?

Mr. David Browne:

We produced an outline document at the back end of last year. It has three streams, namely, MMC, sustainability, and digital delivery. That has been produced. We have developed all the programme modules for a CPD course. It was slowed down slightly as a result of discussions with Construct Innovate and Enterprise Ireland but we are now up and running to produce a CPD series that will be carried out in conjunction with all the other bodies within the construction sector to deal with both DFMA and MMC. I am hopeful we will roll that out before the end of this year.

Photo of Francis Noel DuffyFrancis Noel Duffy (Dublin South West, Green Party)
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That is great. I thank Mr. Browne.

Mr. Martin Searson:

I would like to comment on that. CIF, on foot of the third report we did on the future skills needs for MMC, has rolled out micro-credentials, through Construction Professionals, CP, Skillnet, and in combination with Griffith College . There is a level 8 micro-credentials course on supply chain optimisation and collaboration for MMC. That is available and there are two more modules coming off the back of that as well at the moment that will be developed over the summer and ready to be rolled out in quarter 3. That will help support the work also.

Photo of Francis Noel DuffyFrancis Noel Duffy (Dublin South West, Green Party)
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Yes. From the bit of research I have done there was a knowledge vacuum in this space and it is about bringing people up to a level where they can be confident they will not get sued, effectively.

I have a final question for Mr. Stevens. It is very good to see him in this forum and from working with him over the years, I believe his insight and knowledge about housing design is second to none. Considering that in the past we designed urban realms where low-rise, high-density communities were created, giving 50-plus units to the acre, examples of which are Stoneybatter and Portobello, what type of regulations are now required to allow this low-rise, high-density housing in Ireland again because we are sitting quite below that?

Mr. Dominic Stevens:

I know this is subject to another report being done but garden sizes, back-to-back distances and the management of cars - the storing of cars, where we put then, and the quantity of cars - are the three key, straightforward things.

Photo of Francis Noel DuffyFrancis Noel Duffy (Dublin South West, Green Party)
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It is quite simple.

Mr. Dominic Stevens:

Also, the availability of good locations to put such developments is what is really important.

Photo of Francis Noel DuffyFrancis Noel Duffy (Dublin South West, Green Party)
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Does Mr. Stevens mean in the context of transport corridors?

Mr. Dominic Stevens:

Yes, in the context of transport and carbon emissions. However much one can save on building the building, running the building, day-to-day life and transport are huge elements.

Photo of Francis Noel DuffyFrancis Noel Duffy (Dublin South West, Green Party)
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I thank Mr. Stevens.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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I thank the Deputy. Coillte told us they produced 700,000 cu. m of construction grade timber last year. I cannot remember how much was used here and how much was for export but there is considerable potential for home-grown Irish timber. I will now move to Senator Cummins.

Photo of John CumminsJohn Cummins (Fine Gael)
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That is a fair point and it was said to me when I visited Medite Smartply. There is capacity within our indigenous sector. They do not care where they sell it to but if the timber is better utilised within our own country, that is for the better. I would like to tease out further Deputy Duffy's comments relating to the compact design and that consultation which closed last week or the week before. I know it was said that it was simple in terms of garden sizes, parking spaces and set-back distances. In one sense I agree in terms of the garden sizes and set-back distances. The difficulty we have is in terms of the parking space element of it and that is why transport corridors were mentioned. If we take certain areas of the country, the difficulty we have is that if we are to try to drive density in an area that is still car dependent, first we cannot have half a car space for a two-bedroom unit. There is no half a car, it is a car. In terms of three-bedroom or four-bedroom units the reality is, whether we like it or not, there are two cars in the driveway. If it is a rented home, for example, there could be three cars in the driveway. The difficulty we have, in reality, is if we do not provide sufficient spaces. I have seen it. I was on the council for 14 years. One of the most difficult challenge on estates is having all of the cars out on the street. What happens when an emergency vehicle or a bin lorry needs to come down the street and it is blocked? It is because there is not sufficient space. Will Mr. Stevens comment on that reality on the ground?

Mr. Dominic Stevens:

That is something that has filled our lives on a day-to-day basis for years.

Photo of John CumminsJohn Cummins (Fine Gael)
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Yes, which is why I am asking.

Mr. Dominic Stevens:

One element of that might be, whatever is desirous, the consumer who wants to buy the house has his or her ideas. One thing the Senator said is key. He mentioned the two cars in the driveway and there is no reason for them to be in the driveway. If we look at somewhere like Freiburg, where there has been very environmentally and pedestrian friendly development over a large number of years they have a four-storey prefabricated car park just on the edges of their development. In Holland there is a really good public realm and then a backyard where everyone puts their cars. The desire to put one's car outside one's house might be the thing that is lost and in fact with our development plans that is being lost. For one third of houses, people might have to walk 100 m to their car, albeit they car drive to their front door to make deliveries or can park one car at their front door. How to capture that in regulation is difficult because it becomes a question of quality.

Ms Claire McManus:

I would like to comment as well because it is a really important point. At a broad level, the less sustainable the housing, the cheaper and more viable it is to deliver. That is only true because we are not counting everything in the system. There is no benefit to building in a walkable area to the viability equation. Generally, the sites in walkable places where people might be able to survive with one car instead of two cars, are more expensive to deliver. There needs to be a way to bring it into the system in order that we count the benefit of less carbon emissions due to transport and all kinds of other benefits. If we are building in an brownfield site, we are not losing agricultural land, hedgerows etc. I know I am going a bit off-topic but all of those costs should be brought into the system and then we should incentivise the stuff we want to see happen.

Photo of John CumminsJohn Cummins (Fine Gael)
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In the same context and vein, and I appreciate we are diverging slightly but it is all interconnected, I assume the CIF has the view that it is important when we talk about density that what we count is very important. For example, if attenuation tanks that were once there are now ponds that are visible and usable. Formerly, there would have been open space on top of them but if they are open, they are now probably not being counted as open space. If there is to be a car park adjacent to that site, it should be factored into the development in terms of the density that is being achieved. If we confine it to just the housing units, we will come up with two very different numbers, if the witnesses understand the point I am making. Will the CIF comment on that? I assume it made a submission to the guidance document.

Mr. Sean Downey:

Yes, my colleague and our housing department made a submission. I think the Senator answered his own question. We said we believe that the space taken up by some other compliance measures should be counted, particularly if it can be considered an amenity to the site.

Photo of John CumminsJohn Cummins (Fine Gael)
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Could I go back to the main premise? Reference was made to grant support from Enterprise Ireland. Are more grant supports needed in this area? I am conscious of what was said about changing the goalposts and trying to ensure certainty in the future, because changing the goalposts is not helpful for processes, systems and streamlining, as Mr. Searson stated. If we were to have more grant support, where would it be targeted and at whom? I will leave that with the Construction Industry Federation delegates.

Mr. Martin Searson:

The Built to Innovate scheme is in place and there are Lean voucher schemes. Enterprise Ireland provides a lot of such support but it is subject to state aid rules. Therefore, if the funds are to be scaled up, permission will have to be obtained. The supports would definitely be targeted at the off-site manufacturers. It is a question of driving the education and skills development we need and having training courses. Skillnet Ireland could possibly help with a scheme in this regard. If we are to scale up to the capacity required and have certainty, we will need to have the inputs to make it happen.

Photo of John CumminsJohn Cummins (Fine Gael)
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Is there a specific request over and above the existing ones? If there were something of use that is not in the system right now and that we could introduce tomorrow morning, what would it be?

Mr. Sean Downey:

If you look at the profile of the existing off-site manufacturing companies, you will see many of them have a reason to exist already. They have a parent, in that they may be owned by a developer or they may have come from the timber frame sector and have grown over time. Some have grown over 25 years. The big ask has to be for strategic funding to support the capital expenditure. As Mr. Searson outlined, there is a very significant fixed capital cost associated with building a factory and providing permanent on-site jobs that demand a certain level of throughput in terms of factory units. The companies will not be able to seek investment if they do not have certainty. Low-cost finance and strategic finance from the State are desirable if we have excess money for which we are looking for a home.

Mr. Martin Searson:

The benefits of that would include regional and local employment and tax receipts. It would result in minimisation and would support sustainability objectives. Anything that would help would be great.

Mr. Tom Parlon:

If we are into standardisation, robotics in the plants would make a lot of sense. I am actually part of an industry delegation going to Estonia the week after next. Apparently it is big into exporting modular timber homes all over Europe, particularly Scandinavia. It has a massive timber heartland. It has developed its modular construction to a very high degree, so it will be interesting for the industry to pick up some ideas there.

Mr. David Browne:

For many years, IDA Ireland built advance factories for incoming foreign direct investors. Perhaps it is time for Enterprise Ireland to build advance factories to support indigenous industries, particularly in the area of modular construction.

Photo of John CumminsJohn Cummins (Fine Gael)
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I like what Mr. Browne has just said. It is something I have said many times. I agree the IDA Ireland model for advance building solutions has worked exceptionally well. This is not a space that Enterprise Ireland has been in, but that is not to say it is not one it cannot or should not be in.

Mr. David Browne:

I am aware, through participation in the construction sector group's innovation and digital adoption subgroup, that Enterprise Ireland now has a remit to support the development of housing that we need in this economy, for all the various reasons. One of those reasons has been given.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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To pick up on that, it could be made even easier, rather than asking a company to deal with two State agencies. If we are creating multi-annual framework agreements for companies – for the building of public homes, for example – such agreements could include seed capital to allow the companies to get themselves up and running or expand instead of staged payments or payment at the end. Manufacturers factor their costs into the price they charge for their work anyway, so in a sense we would just be giving them an advance payment. The easier we make this for people, the better. I see no reason why, if company X, be it a Coillte company or private company, meets all the requirements for a framework agreement but needs X million euro in start-up capital to expand or for new machinery, it could not be worked into the framework. It seems this would make it easier. I float that as a suggestion.

We should keep reminding ourselves that we have done some of this before. In this regard, let me pick up on Senator Cummins's point. When a Welsh slate manufacturer was seeking to build a factory in Waterford in the first half of the 20th century, under the Free State, its representative sat down with Waterford Corporation, the then local authority, and agreed a plan for the corporation to build houses for workers. If we do not separate things into departmental silos and instead connect the dots, it makes more sense.

People mentioned Stoneybatter. It is important to remember that Stoneybatter homes are too small but we do not have to use Stoneybatter because there is the likes of Brown's Square or Ceannt Fort. Again, it is just about reminding people that there were times at when we built really beautiful homes to better, more modern space standards. I do not know whether those present have walked around Ceannt Fort recently. Despite the fact that it is really well served with public transport, including a high-capacity bus corridor, and is not that far from the city, the car-parking conditions in the estate are probably among the worst. Every home has two or three cars and you cannot actually walk on the footpath. How do we ensure that where there is car dependency, it is provided for in an innovative way?

I have seen schemes in countries such as Germany and the Netherlands that have combined land use. Instead of having very expensive underground car parks, they have car parks that are slightly settled into the land and above which there are open greens or amenity spaces. I saw a bowling green at one public housing project. This results in the dual use of land without the really expensive cost associated with having to dig down. There are ways of squaring the circle. In Adamstown, there is a genuine challenge because there is half a car-parking space per unit of accommodation. While the area has some new high-frequency public transport, it goes in only one direction, to the city centre. If you work in Blanchardstown or Tallaght, it does not work. I offer this as another example.

Mr. Daithí Hanly, the Dublin city housing architect in the 1950s, is much maligned. Some of the really wonderful inner-urban four- and five-storey duplex flat complexes were designed by him. We often call them the gull wings, because they have what I think are really attractive gull wings. The complexes are all based on really standardised systems. I am not necessarily saying new developments should look exactly like them. Again, these are things we did in certain periods. There is no reason we should not allow three- and four-storey walk-ups. The challenge is that we have to have a housing system that ensures that, as people get older, they will not be left on the third or fourth storey.

In some sense, this conversation is connected with our conversations on densities, compact growth and affordability, because there is a range of factors. Could Mr. Downey, knowing the industry as well as he does because he spends a lot of time with the various providers, answer my next question? I will give him the rest of my time to flesh it out. If we had a Government that was really ambitious and listened to the advice of those who do the work on the ground and the very sensible suggestions by other members of this committee, including Senator Cummins and the Chair, and if it really wanted to have a go at this at pace without in any way compromising standards, including fire safety standards, how much could the industry scale up year on year, given the right sets of policies? I am talking particularly about where the low-carbon building products amount to 60% plus of the final product. How ready would the industry be if we had a Government that was willing to run at this with the right policy approaches, accounting for design, procurement, Part B and so on? How ambitious could we be?

Mr. Sean Downey:

The responses you get will be based on how serious the Deputy is about his question.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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Let us say I am very serious about it.

Mr. Sean Downey:

If the industry is currently well capable of producing 30% of the units, there is no reason that the 30% could not follow the trajectory of the total number of units and that the market share could not grow significantly.

A major issue is the funding model, which was outlined by Deputy Ó Broin and Senator Cummins. We also need to be careful in that just because we are at the committee hearing discussing the seriousness of the housing situation, that does not mean a company that is going to invest in a factory will follow through on its plan. It may respond to a housing crisis now but if health or education become much better engineered and much more prepared to ask for an MMC off-site solution, that will become a much more attractive market. If the UK housing sector becomes much more attractive, it will follow that. It does not necessarily mean anything that we are lining everything up here and demanding certain things. That is where certainty of procurement and certainty of stating what the framework looks like come in. We had a teaser in that regard last year with the Office of Public Works, OPW, and the Ukrainian proposal. If ten companies are capable of scaling and answering that ask at the moment, whether it is a 2D or 3D volumetric offer, they need to be told the volume of units and that while they are currently capable of producing 900 units in a timber frame factory in Dundalk, they should examine a business plan to scale to 3,000 units over a five-year cycle and that five or six other providers will be examined with the same timeline. There is no reason the industry would not respond but those risks exist if, for some reason, the State changes its mind halfway through and there are different Department guidelines again, floor area requirements are changed or building regulations change again in two or three years. Those producers may decide that, given the risk for them and their product, they would be better off focusing on the expansion of hospital beds or second level education buildings.

The main issue is for those deciding policy to make their minds up and be clear that it will be a framework for five years. They need to fix it and not change their minds. That certainty will allow the industry to gear up to answer that ask. They need to be clear that they understand what makes them tick and what supports they need. Senator Cummins was correct; the advanced manufacturing principle could work successfully to bring new providers to the market, nurturing them and helping them to grow their offering. We have probably covered everything we believe off-site manufacturing companies require. For the committee, on the policy side, and as those who will have the capital budgets to spend, they must make their minds up, fix it and send the signal to the market that this is exactly what will be procured over the next five years. It is important they do not change their minds.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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I will take this slot and Senator Cummins may contribute after me if he wishes. Following on from what Mr. Browne said, the State needs to lead by example. Regarding life expectancy and comparability of conventional builds, while they have not been without difficulty, is there a risk that the State leads on social housing while we perfect the art before we move to private housing? Is there any risk in that?

Mr. David Browne:

Excuse me?

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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While the State leads by example in delivering at scale social or public housing, we are perfecting the art before we move to private housing. Are there any concerns on that aspect? I read somewhere that architects have experimented with social housing budgets.

Mr. David Browne:

Someone has to lead. As the State is the biggest client, there is good logic to that. There are relatively innovative mindsets in most of the large housing providers. You would not be dragging them along; they would follow quite enthusiastically.

Ms Claire McManus:

The risks will be costs and delays. I do not believe the risk will be quality because those buildings must meet building regulations, which are very high. For example, one can see the pain going through changing Part B; there are too many eyes on it. On the private sector side, once the viability equation is not met, the project stops. The State taking the lead may lead to pain in additional costs or delays but ultimately it will lead to a good product and bring the industry along as an investment in a better system in the future. It is a reasonable proposition for public housing.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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If one were to pick a country in Europe that has a set of standards and guidelines similar to our Part B, pluck them off the shelf and implement them in Ireland, where should we look? Why are we trying to reinvent something already deliverable elsewhere? Mr. Stevens mentioned Germany. If we were to take the German standard model-----

Mr. Dominic Stevens:

I would mention Germany or any of the Scandinavian countries. What is fantastic about fire is it behaves the same way in Germany as it does in Ireland. It does not change. We have a maritime climate; people talk about damp in a different way. Fire is the same. I say that because my knowledge is of Germany but Germany is completely fit for purpose for the construction of safe, multistorey buildings out of CLT.

Mr. David Browne:

I have visited all of those places and I fully agree.

Mr. Martin Searson:

I would say Switzerland and Austria. Progressive Switzerland built a 100-storey timber frame cross-laminate building. Norway is also very progressive - the Nordics again. They implemented schemes in the past. In Sweden, there was the 1 million homes project scheme in which, over a few years, it did a framework for 1 million houses, to be modular. They are the countries that are leading. Through research and innovation, Construct Innovate could examine and collaborate with those European research bodies and develop it further.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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If we do not adopt those types of standards or introduce them relatively quickly and properly, do we run the risk that modern methods of construction will be limited to 10 m or possibly 11 m, as Deputy Duffy said? That would mean we will continue the semi-detached model and will not be able to build high-rise, although 100 storeys is very high. If we could do three, four, five or six storeys at the moment - buildings of medium density and height - it would satisfy much of our needs. Is the technical guidance at the heart of the issue?

Mr. David Browne:

We did a study in Galway recently, examining a "carry on as you are" scenario and a proper sustainable compact city scenario. Galway can meet its population needs, which will be substantial over the next 50 years, by building within the existing city boundary at an overall density of about 35 to 40 units per hectare. Galway currently has a density of 13 units per hectare. If that were doubled and one built at 26 units per hectare, the city would become a catastrophic mess. It would grow to double its size. As we already know, Galway is impossible to get around. The city would choke, would become unattractive for inward investment and would start to careen into a city that is not viable in the future. We cannot go on with the two-bedroom, semi-detached model. It is not viable for the future.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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I completely agree with Mr. Browne but it will not happen unless we get the technical guidance - this Part B, which seems to be blocking it - exactly right.

Ms Claire McManus:

I invite Mr. Kirwan to jump in as timber frame buildings are not my area of expertise. On Part B and high rise, the history, as I understand, is that when the Grenfell tragedy happened, a circular was issued due to obvious concerns. That meant that the standards people were following went from a 2016 British standard back to a 1990 standard. They have been playing catch-up ever since. For example, of the apartment buildings we were working on, none complied in terms of fire escapes, how close the fire tender or fire brigade needed to be to the building and how many sides it had to access. There were planning permissions that did not comply with Part B. A building control officer in one local authority would give one answer and another in a different local authority would give a different answer. There was a scramble that has been extremely difficult and complex to resolve. It is getting there but it was a very particular set of circumstances.

The cladding used in Grenfell is not really applied here. That was a huge tragedy so I would not criticise anyone for reacting to it but we are now playing catch-up. It was a very particular set of circumstances that led to that tragedy and there will obvious be a Part B but people are very slow to innovate in the area of fire. It is the one area where, as a designer or practitioner, one can get a criminal prosecution and a criminal record so it is taken very seriously and people are very nervous about it. Ultimately, it was a unique set of circumstances that has led to the challenge we face now. Perhaps it is difficult to be brave in this area.

Photo of John CumminsJohn Cummins (Fine Gael)
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There is some conflict in what has been said. We are being told that when there is demand and certainty, the sector responds, and I tend to agree with that, but Mr. Parlon told us that the timber-frame side was maxed out. Why is the sector not responding to that if there is more demand for that product?

Mr. Tom Parlon:

There are plans to do so. If a company is turning out thousand of units per year, which is about the norm for the bigger ones, to double that again is a very substantial investment. I know one of our big house builders is working on a particular site to do that. Again, it is a matter of certainty and having a guarantee on investment. Some of the companies involved have been established a long time. Century Homes was the first big outfit that was eventually bought by Kingspan. That has continued to operate and it has grown. I think the output is about 8,000 units per year, as Mr. Downey said. That is eight big companies providing 1,000 units each.

Photo of John CumminsJohn Cummins (Fine Gael)
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I still do not see the issue. Is it that the bigger guys have soaked up the capacity and that is interfering with the ability of a medium-size builder to get in on the timber-frame side? A medium-size builder who sees that a bigger company is able to throw up timber-frame housing quickly whereas he is stuck with block construction, he will decide he wants a bit of that because it delivers more quickly. Do these companies have the ability to do that? Is it happening? If that is happening, the question remains as to why capacity is not being increased sufficiently to meet the demand?

Mr. Sean Downey:

There are definitely strategic partnerships between the larger developers and certain timber-frame manufacturing companies. That is without doubt. Some have optimised that so that across a few thousand units, they might have only three house types. They might look completely different from the outside. Then there are a number of small, almost cottage industry size timber-frame manufacturing companies across the country. The Senator’s question is why are they not growing. The answer might be that they have enough demand for the scale of factory that they have. It could be that there is no incentive for them to grow. Perhaps a number of local builders around them are thinking that if timber frame is meeting 50% of the requirements in the area, they are happy enough to absorb the blocklayer and bricklayer for their units because they have availability. Maybe there is no tipping point yet where they have to move.

Ms Claire McManus:

I suggest there is not a great deal of certainty on what it will be like in three or five years at any given time because there is so much change and it is constant. It is change for good reason but I do not think the medium or long-term pipeline is all that clear.

Photo of John CumminsJohn Cummins (Fine Gael)
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Going back to the beginning of our conversation when Mr. Parlon referred to a possible next housing Minister, I assume he would agree that were such a person to remove the help-to-buy scheme, which is an integral element of buyers getting their deposit together, it would result in the construction sector pulling back from the delivery of homes.

Mr. Tom Parlon:

Any negative in encouraging people to buy would be-----

Photo of John CumminsJohn Cummins (Fine Gael)
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Does Mr. Parlon agree that were the help-to-buy scheme removed in the morning, it would result in fewer homes being built, modular or otherwise?

Mr. Tom Parlon:

I am not going to be drawn into that situation. I will say, however, that the recent announcement by the Government on the development levies and so on is something the CIF has been pushing for the past 12 years. It took a long time for the light to go on.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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I will make a closing comment related to fire safety and Grenfell. It is important to remember that Grenfell was not only about the cladding system but also the failure to maintain the building properly, particularly the systems to ensure the exit doors closed in time as people fled from the building. There was also an outdated stay-put policy for high-rise buildings which does not exist here. It was the combination of those three things that led to such a high level of fatality. It is also important to note that prior to Grenfell, the British were having the same sorts of conversations that we are having because there had been previous fires where people had either been seriously injured or small numbers of people had died. There was inertia in the system to properly grapple with that.

The frustration for some of us is that while there have been some changes, the core of Part B and the technical guidance documents is out of date. They are just so old, going back to 2007. From my point of view, the review must do two things. For the information of the witnesses, the committee will have a session with the various players. We need to have the highest possible fire safety standards but we must also allow new building technologies to be used to build taller buildings. They do not have to be high rise. Dublin is a low rise to mid-rise city and does not necessarily need a large number of high-rise buildings. I have never met a public fire safety official who said it is not possible to build a 20 m timber-frame building that is fire safe. The conversation is tell those who want to do that what is required. The frustration for me is, one we discussed last week with the National Standards Authority of Ireland, NSAI, is that it takes so long to update those building regulations. I think that is the bigger issue.

I have campaigned on fire safety and building defects for a very long time but I am a strong advocate of taller timber-based buildings. It speaks to the point made by Mr. Searson and Mr. Downey that there is no contradiction in wanting these technologies to be used. The crucial point has to be made, however, that we have many buildings with old-fashioned technology that do not meet standards. Even in buildings such as Milford Manor in Newbridge, County Kildare, modern methods of building technology were used but the problem there was compliance and building controls. There is, therefore, a set of other issues. It is not that there cannot be a higher density and higher timber-based buildings but there must be proper standards, building control and enforcement.

The point being made is that if we move towards new building technologies and the majority of manufacturing takes place indoors, a good building control regime and independent inspection can provide a higher level of visibility as construction proceeds. It is rather like the manufacturing of anything else in that it is about the ability to make sure everything is being done on-site. Dublin City Council has got itself into difficulty with two of its new building technology schemes. This has been well reported and much of it was due to things simply not being covered on site and timber-based products getting wet because the workers were not properly trained. If that is all done off-site, and it is all manufactured and then assembled, that fixes those issues. It is important that the public hears us say that.

My final question, at the risk of asking our guests to repeat themselves, is that if our committee was to make three recommendations to the Government, and the three organisations presenting got to choose one recommendation each, what would be top of their list? It is to help us prioritise what we have been hearing because there have been a lot of good ideas in the discussion today.

Mr. David Browne:

A combination of the idea I presented of mandated targets and the Deputy's idea of assisting manufacturers with prepayments would be an important and game-changing innovation.

Mr. Tom Parlon:

It is a question of providing pipeline surety and some upfront funding.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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Not to put words in anyone's mouth, but that is the framework agreement that Mr. Downey mentioned.

Mr. Martin Searson:

It has a different cash flow model. It is not staged payments on a monthly basis. It is very much an upfront payment and depends on having the people and materials in the factory. That cannot be done under a drawn-out process.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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There could be a combination, though. One of the reasons the State wants to have staged payments is because it wants to ensure that work gets done. If there was a multi-annual framework agreement with an element of upfront payment plus the built-in incentive to maintain the relationship with the client over the five years, would that not fix the problem?

Mr. Martin Searson:

Yes. There could be vesting certificates as well, which would secure the clients' assets that are being made in the factory and offer protection around funding on that side of matters. There could also be escrow agreements and so forth. There are ways of protecting people and minimising the risk from the procurement perspective.

Mr. Dominic Stevens:

I will go slightly off topic, but I would recommend reform of the planning system to create certainty.

Photo of Eoin Ó BroinEoin Ó Broin (Dublin Mid West, Sinn Fein)
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Surely that is all sorted with our wonderful draft planning and development Bill.

Mr. Dominic Stevens:

That is certainly something that can be added to.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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I wish to ask about something Mr. Stevens said in his opening statement regarding apartment standards. We have often heard the narrative that apartments in Ireland are very small. In the little time remaining, will Mr. Stevens give us his insight into apartment sizes here compared with what is expected in Europe, which has a longer history of apartment and multi-unit living? The two may not be truly comparable because there is a better system in the public realm, for example, better walkability and transport, in other countries than there is here.

People were highly critical of the build-to-rent standards. How do they compare to European standards and would they be suitable for long-term living if we were to apply them to cost-rental accommodation? The build-to-rent system is beginning to slow down.

I have asked many questions, but I wish to discuss apartment standards. Part of our Climate Action Plan will have to involve densification and apartment living. We need to embrace and address that.

Mr. Dominic Stevens:

The research we did for the Housing Unlocked competition covered that comprehensively. Ms McManus can correct me as I go, but the standards for one-bedroom, two-bedroom and three-bedroom apartments in Ireland were larger than any other European sets of standards. In some cases, a two-bedroom apartment here is 30% larger than a similar apartment in Madrid. The norm across various types of apartment is 10%. Comparisons are sometimes slightly complex, but it would be 10% across the board. To the best of my memory, Irish build-to-rent standards were still comparable or higher than European standards.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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I will hone the question a little. What Mr. Stevens referred to was the actual living space.

Mr. Dominic Stevens:

Yes.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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Does that include common space, storage space and everything else one needs for normal family living?

Mr. Dominic Stevens:

Storage space and private open space, but I do not believe shared space is part of the comparison.

Ms Claire McManus:

It would be the equivalent of the private amenity. There would be the same space as the shared space – whatever that might be – multiplied by the number of apartments. The build-to-rent standard is the same minimum standard as the standard standard, but if it is build to sell, 50% of the dwellings must be 10% in excess of the minimum standard. For each typology, the minimum standard is greater than the equivalent single-storey house. As you go to three storeys, you are allowing space for stairs.

Everyone in this room is a housing expert and we all live in houses. If they have not done it already, I would encourage people to take out a measuring tape and go around. The living space in a one-bedroom house – kitchen, dining room, living room and other living spaces – has a minimum size. People should measure each of the spaces. Some people will be surprised that they are bigger than the homes they are living in at present. People should form their own view on the matter. For example, a double bedroom is ample space for a double bed with space around it, a wardrobe and a desk. The standards are good and we should be proud of them, but get out the tape and test them. Politicians and the public should form their own views and get comfortable with the minimum standards, or not.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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Ms McManus nailed it there. Everyone is a housing expert.

Ms Claire McManus:

Yes.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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Will the other witnesses comment on that point about the narrative around apartment standards?

Mr. David Browne:

I was interested in the Mitchell McDermott report. It costed an Irish semi-detached house and an Irish apartment in the five different cities. They all came in at a similar price. The price differential between what comes to market here and what comes to market in other countries is due in the first instance to the space standard, but also the idea of giving people a grey box without floor finishes, kitchen finishes, wardrobes, etc. That seems to be creating a significant reduction in cost, which could be attractive in the market. If you can go to Ikea and buy a kitchen unit for €1,000, it provides a different paradigm to work to. As a young couple, the first house we bought was very old and it took us four or five years to start making it liveable. Perhaps that is a route people could follow.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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Yes. It is not an uncommon story. Will Mr. Browne clarify his point about the space standard and the cost differential?

Mr. David Browne:

As Ms McManus pointed out, other countries' space standards are smaller than ours, which reduces build costs. As to quality standards, though, various elements are left out. Ms McManus referred to cavity walls. When I spoke to Deputy McAuliffe, he mentioned how eyebrows were raised at the fact that we had cavity walls despite the fact that our climate was not that much different from that of other countries. That is very much embedded in the culture of house building in Ireland, but perhaps it could be examined.

Mr. Sean Downey:

The data in the Mitchell McDermott report that the Department commissioned are excellent. Obviously, it is only the 48% hard costs. The report has to be taken in context, though. Birmingham was one of the cities examined. Birmingham has a population almost the same size as the Republic of Ireland's. It has a market that probably has much greater efficiencies in terms of scale.

Other analysis I heard just after the report was launched pointed to how tenure was important. If you are getting a grey box apartment, there is an expectation that you might be living in it for 20 years, so you would not mind investing €3,000 or €4,000 on the kitchen and floor coverings because you would not expect to be moved on in 12 to 18 months' time.

We must consider the different factors for why behaviours drive certain levels of finish and make certain specifications acceptable in the market. That could have a significant impact on the raw construction cost of delivering units.

Photo of Steven MatthewsSteven Matthews (Wicklow, Green Party)
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As there are no more questions, I thank the witnesses for their time. It has been interesting and helpful to committee members. We will probably produce a small report on this matter, but we also want to consider designs and densities, how we can achieve the densities and climate action we need and why climate action should drive densification with the right design.

We will adjourn until Thursday, 11 May at 1 p.m.

I thank everybody for their time today.

The joint committee adjourned at 5.30 p.m. until 1 p.m. on Thursday, 11 May 2023.