Mr. John Coleman:

I thank the Cathaoirleach and members for the opportunity to engage with the committee and provide a progress update on the work of the LDA and to outline our plans for the years ahead.

The year 2023 was pivotal for the agency. The momentum built up will continue into 2024 and beyond. To the end of 2023, we delivered over 1,000 new homes. Much more importantly, this represents the beginning of a strong pipeline of delivery which is due to ramp up very significantly. In 2024 we will have at least 5,000 additional homes delivered or under construction. This trajectory has positioned us to target the delivery of 14,000 homes by the end of 2028, including about 1,000 already delivered to date, with an ongoing run rate of at least 2,000 homes a year from then on.

In order to communicate how this will be achieved, I would like to take some time to explain our delivery mechanisms and to outline how we intend to fund our growing pipeline of affordable and social housing. I would also like to mention some of the continued challenges we face including the current high cost of construction and the impact this has on cost-rental rates. I am also eager to mention that we appreciate the committee's patience in affording us the opportunity to finalise our funding arrangements with the Government prior to attending the committee today. This has enabled us to prepare a much more certain and detailed account of our expected affordable housing output.

The LDA’s core purpose can be summarised as ensuring the delivery of affordable and sustainable homes in the right places at the right time. To achieve this purpose we deploy two primary delivery mechanisms. The first is direct delivery on lands sourced from the State or on lands purchased by the LDA. The second is through the Project Tosaigh initiative, whereby we partner with home builders. This diversified, multichannel delivery model provides the LDA with the flexibility to produce affordable housing without being reliant on one particular source. Having both delivery channels allows us to deliver faster and at greater volume than would otherwise be possible.

I will now outline the progress made to date in both delivery streams, the future opportunities and the challenges we are working to overcome. Direct delivery by the LDA involves the appointment of construction contractors to build homes on lands that we acquire from the State or market sources. These housing developments are designed by the LDA and put through the planning process by the agency. Using this delivery stream, the LDA has made considerable progress. From a standing start, with no corporate infrastructure and limited access to a relatively small portfolio of difficult sites, the agency is now on track to be one of, if not the, largest housing producers in Ireland within the timeframe of its 2024 to 2028 business plan. At present, our direct delivery pipeline involves over 10,000 homes, with developments at various stages from design to nearing completion, with more being added as new lands become available or are acquired by the LDA. We have made major progress in bringing schemes through planning and around 6,000 of these homes now have planning permission. Our housing pipeline will continue to be added to in 2024, and this allows us to project the direct delivery of around 6,000 completed homes in the years to the end of 2028, representing almost half of our overall delivery in this period. This level of delivery excludes our Project Tosaigh output, which I will outline later. To provide a handle on this scale, the direct delivery of the LDA is trending towards matching or exceeding the current scale of the largest Irish house builders.

Our first direct delivery homes are nearing completion and will be made available in Shanganagh in Dublin later this year. Construction is also under way, to give another example, at the site of the former St. Kevin’s Hospital in Cork city, where we are building more than 260 homes, and Devoy Barracks in Naas in Kildare, where work on 219 units began in December. In total, we estimate we will have around eight directly controlled sites under construction in 2024. This number will grow as new sites are ready for construction.

The path to expanding direct delivery involves some challenges, which we are determined to overcome. For instance, the idea that there are vast amounts of State lands in optimal locations ready for housing development is generally not the case. In early 2023, the LDA published the first ever comprehensive directory of State land, which involved the analysis of 180,000 separate legal folios. While this exercise revealed extensive land opportunities that the LDA is pursuing - 83 sites that could potentially yield around 67,000 homes - the reality is that there are significant constraints in releasing, accessing and developing much of this land. Notwithstanding this, we have made excellent progress on accessing some key sites from the State. For example, I mentioned Devoy Barracks, which was transferred to the LDA by the Housing Agency. Shanganagh, to give another example, involves a partnership with Dún Laoghaire-Rathdown County Council. We have multiple local authority partnerships such as Shanganagh in train. We recently published a master plan to deliver over 600 homes on the HSE-owned St. Joseph’s hospital site in Limerick. Meanwhile, as we have previously reported to the committee, advanced design and planning work is under way for 200 homes at a site on the Dyke Road in Galway owned by Galway City Council, 185 on a Teagasc-owned site in Kinsealy in Dublin, and 350 on an ESB site in Wilton in Cork, among many others. The help of the Government in securing these lands and the co-operation and support of the State bodies involved is critical because the LDA has no powers to compel a landowning body to provide access to its lands.

As we continue to access State-owned sites, the agency is also making strategic acquisitions of land on the private market in cases where value can be obtained.

At the end of 2023, we acquired a large site from NAMA, next to Clongriffin DART station in north Dublin. This has the potential to deliver approximately 2,300 homes. We intend to commence construction on this site this year and we already have issued a tender for building contractors. Developing State-owned land for housing is complex and lengthy. It can be difficult to get access to sites due to their existing uses and in cases where access is confirmed, the design, planning and procurement process for large-scale developments takes time. It is important for the LDA, as a State developer, to be upfront with our stakeholders, including the committee, and to provide realistic projections for housing delivery timeframes. From the point at which land access is granted, the delivery of housing for large sites typically takes at least five to six years and this assumes there are no setbacks along the way. These timeframes are well accepted in the industry and I indicatively set them out in a diagram in this statement.

Of course, setbacks are a common occurrence in development, not least when it comes to securing planning permission. While the LDA experiences delays in the planning process just like the rest of the industry, we are encouraged by recent progress. Judicial reviews can be initiated and this mechanism can sometimes result in a small number of existing homeowners effectively delaying the delivery of homes for a large number of people. The LDA is not immune from this. For example, one single individual has initiated a judicial review challenge against our Dundrum Central scheme, at the former site of the Central Mental Hospital, which will delay the delivery of 852 affordable homes in an area of extremely high need. This is despite no objections arising from the residents' groups due to extensive community consultation that we carried out. Such delays significantly add to the cost of projects and we are hopeful that the pending enhancements to planning laws will help reduce such delays in future. Notwithstanding such issues, I have outlined how the LDA is well on track to becoming one of the country's leading home builders, with the unique distinction of being exclusively focused on affordable and public homes.

Our direct delivery stream is complemented by Project Tosaigh, our partnerships mechanism. Project Tosaigh is our second major delivery channel. It involves the LDA partnering with house builders to ensure the delivery of stalled or unviable housing schemes and making the homes available through cost rental or affordable purchase schemes. This delivery mechanism is critical to keeping industry output going at a time when private build-to-rent schemes have fallen away and developers are experiencing difficulties accessing finance. Without State intervention in this area, primarily through the LDA but also through approved housing bodies, AHBs, the majority of the housing developments in question, particularly apartment developments, would not otherwise be delivered. Project Tosaigh also expedites overall LDA delivery while our direct delivery stream is ramped up. Through this initiative, we are now targeting the delivery of 8,000 homes over the course of 2024 to 2028, with a firm pipeline of approximately 2,500 homes already delivered, contracted or in advance negotiations. Approximately 1,000 of these homes will be built by the end of 2023 and we are delighted this month to release over 600 cost-rental homes into the market across four new developments in Dublin and County Kildare. The same day we made this announcement, there were fewer than 1,200 homes available to rent in Dublin. This release is excellent news for those struggling to source affordable rental homes and we intend to make further significant releases and announcements through 2024 and beyond. We are excited to be launching a new phase of Project Tosaigh in April this year, which will drive value for money by structuring it as a competitive process where prospective partners will be selected on the basis of best bids. With both delivery channels, the delivery outlook for the LDA comprises approximately 14,000 high quality and affordable homes delivered in total by the end of 2028, subject to ongoing funding.

On the topic of funding, we were pleased with the Government's decision to increase the LDA's equity capital from €1.25 billion to €3.75 billion, in addition to a borrowing permission of up to €1.25 billion. In total that is €5 billion of capital, which will enable us to continue to commit to direct delivery and Project Tosaigh schemes for the foreseeable future.

However, construction costs remain high and the recently confirmed secure tenancy affordable rental scheme, also known as STAR, is critical to providing cost rents that are affordable. In the interests of time, we provided further commentary on this in the appendix to this statement, which committee members can review at their convenience.

To summarise, the LDA has made major progress since its inception around five years ago, from a standing start with no staff, no bank accounts, no sites and no service providers to help bring forward projects, we are broadly following the growth trajectory of Ireland's largest house builders on our direct delivery projects. This output will be doubled through our Project Tosaigh partnerships. This level of delivery makes the LDA's work critical to addressing the country's housing need. The impact of our delivery will be felt beyond the specific homes that we produce because affordable housing, at this scale, will have a moderating effect on private rents too, while the A-rated, high-quality homes we develop are carefully designed to add to and create new, sustainable and well-serviced communities. Such a high volume of activity requires considerable resources. Our staff headcount is approximately 130, all of whom are dedicated to ramping up delivery. We intend to increase this headcount to more than 300 in the next two years. The staff base mainly comprises skilled professionals such as quantity surveyors, engineers, accountants, solicitors, planners and so on. These skills are in demand and we compete directly with the private sector for them. However, any visit to our office will confirm that our people have a genuine motivation and resolve to make a positive contribution to Ireland's housing solutions. We believe in what we are doing.

Looking ahead to 2024, our focus will be on three major themes, namely, advancing more direct build projects to construction stage, expanding Project Tosaigh and critically, attracting and retaining the talent necessary to continue this upward trajectory. We value our relationship and engagement with the committee and I look forward to our discussions today.