Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Apologies have been received from Deputy Stanley. Members are advised of the constitutional requirement that they must be physically present within the confines of the Leinster House complex in order to participate in public meetings.

Today's discussion is on unlocking barriers to the delivery of housing. This requires a multifaceted approach to address the systemic, regulatory and financial challenges. Key obstacles include restrictive planning processes, limited land availability, high construction costs and the delay in infrastructure provision. Tackling these barriers will enable Ireland to create a more responsive and equitable housing system. We are pleased to have the opportunity to consider this and related matters with representatives from Glenveagh Homes, Cairn Homes, Castlethorn Housing Alliance and the Irish Home Builders Association. From Glenveagh, I welcome Mr. Stephen Garvey and Mr. David Caffrey. From Cairn Homes, I welcome Mr. Michael Stanley, Ms Madeleina Loughrey-Grant and Mr. James Benson. From Castlethorn, I welcome Mr. Ronan Columb and Mr. David Kennedy. From the Housing Alliance, I welcome Mr Brian O'Gorman, Ms Fiona Dunkin and Mr. Aidan Culhane. From the Irish Home Builders Association, I welcome Mr.Michael Prenty, Mr. Michael Kelleher and Mr. Conor O'Connell.

I wish to explain some limitations to parliamentary privilege and the practices of the Houses as regards references witnesses may make to another person in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to the Constitution and statute, by absolute privilege. Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.

The opening statements have been circulated to members. I ask the witnesses to please keep tight to the time that is allowed of five minutes or less in order to give more time to members. It is important that we hear the opening statements of the witnesses. I invite Mr. Garvey to make his opening remarks on behalf of Glenveagh.

Mr. Stephen Garvey:

I am Stephen Garvey, chief executive officer of Glenveagh Properties.

Glenveagh is one of the biggest house builders in the country. In 2024 we delivered over 2,400 new homes, across various tenures, representing more than 8% of the overall market.

Our industry, and our society, are still operating under a major but rarely discussed contradiction. That contradiction lies in the fact that Ireland needs hundreds of thousands of homes quickly, but it also wants these homes built under an increasingly stringent rule book, while being delivered at the lowest possible price, and "not in my back yard". These aims are understandable and laudable but they are fundamentally incompatible with each other and cannot all be delivered at the same time. This means that anyone insisting on a perfect solution to the crisis, as distinct from a workable one that is there in front of us, is going to be disappointed.

There are workable solutions possible, but barriers remain. Zoned and serviced land is now almost non-existent. If Ireland is serious about delivering the additional hundreds of thousands of houses it needs, it needs to be serious about making the necessary land and services available for this level of building to take place. With regard to planning, an element of the planning elite seeks perfection, even if this means the progress we all seek and need is delayed or even stamped out completely. With regard to the legal aspect, we have a legal system that enables a tiny minority to stall critical infrastructure projects and grind national development to a halt. On viability, the rising costs due to well-intentioned but misguided regulatory changes often make it too difficult financially to deliver projects. No more than in any other industry, homes can only be delivered if it makes commercial sense to do so. On affordability, the homes we build must be within reach for working people across Ireland. If people cannot afford these homes, they cannot be sold. If they cannot be sold, they cannot be financed. If they cannot be financed, they cannot be built.

We are ready to do more. We have the capacity, the expertise and the ambition. We and other major house builders feel the same. However, we need a system that enables delivery, not one that obstructs it. We need a system that is based, above all, on making progress, incentivising progress and rooting out things that get in the way of progress. We need a sea-change in mindset. We need to stop pretending that this crisis can be resolved without a true crisis mentality, or without measures that are proportionate to the extent of the crisis we are in. Our society, our economy and, above all else, the people who need homes so badly are suffering at the hands of those who seek to stop progress. We need to face this down. We need to stop housing being impeded by theoretical, frivolous or selfish objections, by people with an agenda to keep talking instead of acting, and by people who seek to stop progress simply because the solutions on offer are not perfect even though they are workable. In short, Ireland needs to place more value on the greater good than on those with an agenda. Ireland needs to bypass the naysayers and Ireland needs to do what it knows is right, without getting bogged down in endless discussions and objections. It has often been said that perfection is the enemy of the very good. Let us not make it the enemy of the people whose need for housing is bigger and more urgent than ever before.

We urge the committee to consider actions that we feel will unlock the most significant barriers that are in the way of delivery. The first action is to zone a lot more land and zone it immediately. This means ensuring that local authorities enforce the Government mandate that was issued five months ago under the national planning framework. The second action is to stop putting up with the planning elite refusing to implement national planning policy at a local level. We need to ensure accountability in every local authority for implementing the Government’s decisions quickly. The third action relates to the legal framework and the accelerating infrastructure task force. We eagerly await the task force’s recommendations, which are expected shortly. These recommendations must be implemented quickly. We have to make sure this happens and we must take the necessary enforcement action if it does not. I ask members to support positive legislative changes that will activate infrastructure and apartments, and to bring in emergency legislation if called for.

Ireland stands at a pivotal moment in its housing journey. Every day at Glenveagh, we see at first hand and experience how policy decisions, budget allocations and legal frameworks shape the landscape. Solving this crisis requires unity and collaboration. This is a national opportunity, but it can only be realised if we all work together regardless of political affiliation or perspective. Ireland needs more homes, and we all have a role to play in making that happen. We have to remember that this crisis cannot be resolved without billions of euro of investment. The taxpayer cannot sustain the level of support it currently provides, and it should not have to. We need to ensure we create an environment that attracts and facilitates private sector investment to get all homes built. That means institutional investment and international investment. Ireland knows better than any other country how to harness international capital to create employment over many decades. That successful approach has created and sustained hundreds of thousands of jobs in our country. If we can do the same with housing, we can reap the benefits for all and many hundreds of thousands of homes can be built for the people who need them.

Glenveagh stands ready to partner with the Government, local authorities and communities. The reforms we have outlined give us a fighting chance to do that. We can only get there if we all work together and place a premium on the progress we need, drive greater accountability throughout the system, make things happen at a faster pace, take out unnecessary costs and take away the undeserved and destructive vetoes from people who have been far too keen to use them. That concludes my remarks. I thank the members.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I thank Mr. Garvey. I invite Mr. Stanley from Cairn Homes to address the committee.

Mr. Michael Stanley:

I thank the Cathaoirleach, members of the committee and fellow witnesses for the invitation to discuss this important topic today. I am joined by my colleagues Ms Madeleina Loughrey-Grant, our chief strategy and sustainability officer, and Mr. James Benson, our director of strategic delivery and policy.

To support our own growth Cairn invests quite significant resources into analysing and trying to understand and predict the Irish housing market, including examining if similar economies to Ireland have figured out a better way to make housing more accessible and affordable, particularly for younger working households. We have provided some of these inputs to the committee by way of a supplementary submission with slides. I hope members have the time to have a look at some of the research we have done around the topics we will cover.

The majority of the investment required for housing delivery, as Mr. Garvey has said, must be sourced from private capital. Attracting equity investment as opposed to an historic reliance on debt was the core rationale behind Cairn’s own initial public offering in 2015, a little over ten years ago. As with most of Europe, our Government's current investment is correctly targeted at social and affordable housing delivery. It is estimated, however, that as much as €24 billion is needed to meet Ireland’s wider target of 60,000 homes annually. The State's investment can act as a catalyst to increase private capital investment, and this can be achieved by removing many of the impediments that exist. The brief today is about unlocking barriers to housing delivery. I am conscious of time constraints here so I will focus on three areas.

The first area I want to talk about is the importance of apartments and why they matter so much to our housing targets. Apartments matter because compact, connected urban growth is core to Ireland’s planning and climate goals. They support lower transport emissions, deliver more energy-efficient living and use less embodied carbon. To achieve Ireland’s overall housing targets, apartments must account for at least 50% of future output, thereby aligning with national policy which requires the inclusion of apartments in over 80% of all future developments. Following decades of poor land use, only 10% of Ireland’s population currently live in apartments compared to an EU average of 48%. The housing industry delivered only 38,000 apartments in the five years to the end of last year versus 94,000 lower density houses and duplexes. We have built much of the less capital-intensive, low-hanging fruit of traditional housing but the demand for apartments continues to grow. Younger people increasingly want well located homes on or near transport, services and their employment. As an example, recent cost-rental applications have seen a ratio of 48:1 for each available new apartment, in terms of numbers of applications versus homes available. At the same time, over 30% of planning applications in our cities are refused or judicially reviewed, which has curtailed the apartment pipeline, as has the quantum of available zoned land.

The second point I will touch on is affordability. This issue is not unique to Ireland. Across Europe, all countries are facing similar viability challenges as housing costs have risen dramatically in the last decade. Homes across Europe are now costing seven to eight times average incomes and the cost of delivering apartments in Europe has increased by 60% in the same ten-year period. The EU is responding. Members may have read only this weekend that the EU will soon publish its first ever plan proposing measures to support member state governments' efforts in addressing housing affordability, including the potential relaxation of state aid rules. This is something we would certainly welcome.

Domestically we have seen the appropriate introduction of our Government’s affordability schemes such as croí cónaithe and the cost rental equity loan scheme, CREL. These are practical and targeted responses that work in tandem with existing supports like the capital advance leasing facility, CALF. We are seeing increased State investment in these measures, which we believe in time will enable more large mixed-tenure developments.

We in Cairn and the entire housing industry must also respond by reducing costs as output increases through more efficient delivery and innovation. The timely implementation of new apartment design guidelines is just one example of how our industry can lower the price of new apartments.

Finally on system efficiency and co-ordination, Housing for All is a whole-of-government strategy and alignment with it must flow downstream through every arm of the State. Planning, infrastructure, regulation, financing and construction must operate as one coherent system. In recent years, up to 50% of all Government capital expenditure on housing has been deployed in the months of November and December. This is just one clear illustration of a lack of alignment and buy-in. There has been some interesting debate recently about the number of entities that play a role in the housing industry. It may be that streamlining some of these silos is a promising idea but in the meantime we must get the best out of the system that exists and the job at hand, which is delivering more housing today.

We have a national housing strategy and policy measures. Let us not waste time second guessing them. The new housing activation office’s primary mandate could be to identify where misalignment causes systemic failure and quickly address it.

Finally, we included in our supplementary document some aerial photographs of Ireland's largest new town – I was there this morning - Seven Mills, illustrating progress since the three years since commencement. We believe this is an example of highly successful policy implementation and public-private partnership. Cairn will continue to be relentless in increasing our own output to address this national challenge. On behalf of my passionate and driven colleagues, I would like to thank the committee for inviting us here today.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I thank Mr. Stanley. I now call Mr. Columb from Castlethorn.

Mr. Ronan Columb:

I thank the committee for the opportunity to appear before it today. Castlethorn is pleased to contribute to this important discussion on housing delivery and the measures needed to accelerate momentum towards meeting Ireland’s housing needs. For more than 30 years, Castlethorn has been a leading force in Irish residential development. We have delivered thousands of high-quality homes, built sustainable neighbourhoods, and helped shape communities across the country. Our approach has always been rooted in partnership -with local authorities, State agencies and the wider community – delivering not just homes, but the infrastructure, amenities and services that make those homes part of thriving places.

Today, Castlethorn is actively progressing major housing developments at Ballymakenny in Drogheda, Rathborne, Shanganagh and Kellystown, among others. Each of these projects reflects our commitment to design excellence, community integration and infrastructure-led delivery. In Drogheda, we are proud to have worked with Louth County Council and HISCo on the port access northern cross route, PANCR, a vital piece of strategic infrastructure that has unlocked significant new lands for housing. This collaboration is a clear example of how co-ordinated public–private partnership can enable sustainable development and open up long-term capacity for the region. In Rathborne and Shanganagh, we are delivering homes that are well connected to public transport by helping to deliver that infrastructure. In Kellystown, our plans reflect the same integrated approach, combining housing delivery with investment in schools, transport links and recreational facilities. Indeed, across all our projects, Castlethorn has been instrumental in the delivery of train stations, green spaces and walking and cycling infrastructure, ensuring that development enhances mobility, sustainability and quality of life.

We welcome the Government’s recent initiatives, particularly the planning reforms and budgetary measures aimed at restoring viability to apartment development. These changes, combined with the critically needed investment in infrastructure and the instruction to local authorities to zone additional lands for housing, are important and necessary steps that will help bring forward a new wave of housing supply.

We believe the Government’s direction on infrastructure funding and zoning represents a recognition that housing delivery depends on enabling infrastructure - roads, drainage, energy, and transport - and on certainty in planning. As developers, we are committed to aligning with these national goals and continuing to play our part in delivery. We welcome the Government's directions on zoning additional lands and commitment to accelerated investment in vital infrastructure. However, timely execution of these ambitions will be critical to achieving the targets set out in the programme for Government. This will require immediate buy-in on the part of local authorities to release additional zoned land for development in 2026 and on the part of State utilities to prepare targeted “heat maps”, matching land, operators and infrastructure to prioritise housing-led infrastructure enablement in the same timeframe.

The other critical ingredients to enable accelerated delivery include: the immediate elimination of serious bottlenecks to delivery, particularly the rebalancing of planning powers to reduce to negative drag on delivery caused by potential for judicial reviews while respecting the “common good”, but also enhanced turnaround times for both works and approvals required of State utilities and other State agencies; increased budgetary allocations for initiatives such as the croí cónaithe cities scheme, which can be a key driver towards attracting significant additional international capital for the housing between now and 2030; and continuing collaboration between the State and the private sector to address the viability of apartments and, in particular, ensure that owner occupation of apartments is viewed by our young people as an affordable and attractive tenure option.

Castlethorn welcomes today’s discussion and the opportunity to engage constructively with the committee. We remain deeply committed to supporting the Government’s objectives for housing delivery, to working in partnership with public bodies including the activation office, and to ensuring that the homes we build are part of connected, sustainable and enduring communities. We look forward to answering questions and to exploring how together we can continue to accelerate the delivery of the homes Ireland needs.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I thank Mr. Columb. I now invite Mr. O’Gorman to make the opening remarks on behalf of the Housing Alliance.

Mr. Brian O'Gorman:

I thank the committee for the invitation. The documents have been circulated in advance, so I will summarise my remarks. The Housing Alliance and all AHBs create a national abiding State asset. The housing we develop remains in perpetuity, available to serve successive generations of Irish households. I am joined by my colleague from the Iveagh Trust, Mr. Aidan Culhane. The Iveagh Trust was established before the foundation of the State. The properties it developed are still available, if it gets a vacancy. Therefore, our housing is an abiding State asset.

In 2024, seven members of the Housing Alliance developed 6,000 new homes. We can develop a further 25,000 new homes over the next three years, provided a number of barriers to delivery are addressed. The first that I will draw attention to is providing certainty and consistency of funding and policy. We are awaiting the housing plan. We need certainty in funding but we also need the plan to introduce stability and certainty. Housing takes a long number of years to develop from conception or inception stage all the way through planning, construction and hand over. We must have that consistency to get investment and secure the people who back us financially that the process will not change and their investment will succeed. We also need a funding model that is construction led. Too much of the funding is based on turnkey purchase. There is a clear direction from the Government that it wants more construction from the AHB sector and we are willing to do that but we need funding models that reflect that.

The second aspect to which I want to draw attention is the way we are funded. At the moment, we are funded using 100% loan finance. All the funding we use to develop our homes is 100% debt financed, which involves a port of equity or a soft loan from the State for both cost-rental and social rental homes of 30%. This is money we must pay back. We must provide for that to be able to repay that debt, so we are tying up money that could be spent producing more social and affordable housing. It is wasted money and expenditure that could be used to provide more housing.

The third and final point I wish to make is on the single stage funding approval process. Most of the developments we engage in contain both social and affordable housing. That is a key advantage and element in what we do. We want to create mixed-tenure communities. Not only do we have social and affordable, but we are partnering with developers and local authorities to also have low-cost home ownership as well. We are trying to embrace all sectors within our developments but at the moment the social housing, the social rental housing and the cost-rental housing are subject to different approval mechanisms, so you can have the social component approved and then some months later the cost-rental component approved.

It just does not make sense and it is a waste of time. It makes it impossible to develop, particularly where there are apartment blocks. We cannot build half an apartment block for social rental without the whole thing being developed. We are looking for a single-stage approval process.

The approved housing bodies of the Housing Alliance have a proven track record. We deliver a sizeable proportion of the much-needed additional housing requirement. Up to 40% of all social and affordable housing throughout the country is now delivered by approved housing bodies. The three points I would like to emphasise are ensuring predictability in policy and funding, creating a single point of approval for mixed tenure developments and converting some of the loans we get into a grant to release funding to provide more housing. I thank the committee.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I thank Mr. O'Gorman and I now invite Mr. O'Connell to speak on behalf of the Irish Home Builders Association.

Mr. Conor O'Connell:

I thank the committee for the opportunity to address it today on Ireland's most important social and economic issue. I will take the beginning of our submission as read and I will get into the main content of our submission. Within the Construction Industry Federation, CIF, the Irish Home Builders Association represents hundreds of home builders of all sizes throughout Ireland. Our membership is broad and nationwide, and gives us a unique perspective on how we can deliver more homes for more people. Our members build across the spectrum of housing tenure and type, including social and affordable, cost rental and private housing. Irrespective of views on housing policy, if we want to deliver more housing in Ireland of all types, we need to supply more zoned land, more infrastructure, more planning permissions and, of course, more funding.

Housing supply does not happen in isolation. Many of the supply determinants are outside the control or resourcing of the house builder. The house building and construction sector builds the necessary infrastructure for Ireland and relies on the State to resource adequately the planning system and, in some cases, the legal system to provide the planning permissions that will ultimately supply more homes. We welcome some of the many recent policy and legislative changes, including the revised national planning framework and the associated implementation guidelines, the revised apartment design standards, the new planning and development legislation, the increased funding for many different housing affordability schemes, the increased allocation for infrastructure and the reduction in the VAT rate for apartment delivery to aid viability. However, the environment remains challenging, to say the least, and builders in different areas report different challenges. We are extremely concerned about the supply of housing going forward due to significant delays in many of the housing supply determinants.

Some local authorities have yet to commence the process of varying their development plans and increasing the amount of land zoned for housing. Some are still using outdated population growth projections and are adopting local area plans based on outdated data, ignoring the section 28 guidelines issued last July. The question has to be asked as to whether some local authorities want more housing.

The delivery of infrastructure is simply too slow. My colleagues are due to appear before the Oireachtas Joint Committee on Infrastructure and National Development Plan Delivery over the next week to outline in detail how we can increase the pace of infrastructure delivery. The greater Dublin drainage project is a perfect example. It has been stuck in planning and legal limbo for years. Reform is essential across planning, the judicial review process, procurement and financial approval. Decision-making timeframes need to be quicker and the roles of various agencies need to align to the delivery and implementation of infrastructure and housing. Multi-annual finding is vital to secure the pipeline needed for the construction industry.

There should be an expansion in the scope of works exempted from planning, such as the maintenance, repair or improvement of existing infrastructure by utilities, ports and transport agencies. We note the Department of housing has issued a consultation paper on this, which we welcome. The Minister for Housing, Local Government and Heritage should use his power to create regulations exempting certain types of development from planning permission based on their size, nature, or limited impact. For example, he should create exemptions for larger water and wastewater infrastructure projects by classifying them as strategic infrastructure development. The Government should develop national policy statements or legislation specifically for public energy, water and transportation infrastructure. These would set out the national need and priorities, potentially influencing planning decisions in favour of these projects.

Unfortunately, many permissions for infrastructure and housing have been subject to judicial reviews. Urgent reform of the judicial review process is required. Legal costs need to be examined and the ability of anyone at any stage to object, even if they are not materially affected by a project, needs to be changed. These delays in many instances are measured in years. They increase costs and, from a housing perspective, reduce delivery. Ultimately, many people cannot access housing. There has been a significant reform of planning in recent years, which is very welcome. Reform of the judicial review process needs to be implemented.

We are hopeful that many of the recent announcements will give more confidence to national and international investors that we have a stable policy environment in Ireland which is focused on the delivery of housing. The annualised capital requirement for housing at an output level of 50,500 is estimated by the Department of Finance to be in the region of €22 billion per annum. This scale of investment cannot be delivered by the State alone, so it is vital that we attract international investment.

It is important that the housing activation office plays a significant role in aligning the various agencies involved in housing supply. In many cases, a significant role in the provision of enabling infrastructure for housing involves the local authority, Uisce Éireann, ESB Networks, EirGrid, the Environmental Protection Agency, the Commission for Regulation of Utilities, Transport Infrastructure Ireland, the National Transport Authority and Irish Rail. No doubt, I have forgotten one or two. Sometimes the interests and investment plans of these agencies are not aligned to the development plan. This means that while some infrastructure may be present, it is the experience of all house builders that at least one element, if not more, of the necessary infrastructure is simply not present and has to be built or enabled before housing can commence or, in some instances, before planning permission is applied for.

The local authority and the development plan adopted at council level follow best practice on forward planning and sequential development, and the land is then zoned. However, there is an absence at this stage of planning for the infrastructural blockages that may arise on the lands. The local authority may not be aware of a capacity constraint at a local substation or wastewater treatment plant when it zones the land for development. Over the course of the lifetime of the development plan, capacity constraints may also develop for many different reasons. These infrastructural constraints are present in all locations, from brownfield to suburban residentially zoned land banks. We, therefore, cannot stress enough how vital it is that the provision of infrastructure is co-ordinated by a central body and rapid delivery of enabling infrastructure occurs, so that we can deliver housing. The documentation provided to the committee contains some examples of land banks with infrastructural requirements. At a macro level, the Dublin drainage scheme, once completed, could cater for 100,000 homes in north County Dublin and surrounding areas. It may be impossible to build housing in one of most populous areas of the country without this scheme proceeding. It is a critical project that needs to proceed urgently.

Reform of infrastructure delivery includes having a clear pipeline of projects that the industry can invest and plan for. The documentation provided includes suggestions but as time is of the essence, I will conclude. Regarding housing supply determinants, house builders are especially concerned about the supply of zoned land and, of course, the provision of infrastructure. The provided documentation includes statistics, and I point committee members towards the graph on the number of planning permissions per quarter, which is running at 8,000 units. Simple mathematics tell us we are running out of planning permissions.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I thank Mr. O'Connell. I now invite members to discuss issues with the representatives. Members will have eight minutes for questions and answers and I ask them to be specific with regard to the person or organisation they are questioning. I ask witnesses to be mindful of the time and to try to be concise and pointed with their answers. Almost all members of the committee are here and we will run the full time. There may be an opportunity for more questions. I call Deputy Séamus McGrath.

Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank the witnesses for attending. I know many of them had short notice and I appreciate that. I thank them for all of their contributions to increasing our housing supply which, as they have all said, is a top priority.

Many common themes are coming through, on the need for more zoned land, the need for better delivery of infrastructure and the need to address legal challenges and legal framework issues. One positive is that capacity, which was referenced in many of the statements, is not particularly an issue. That is good to hear. I want to get straight to the point with a few queries. I will not get to every representative group in my first session but I hope I will get to those I do not get to initially. I am sure I do not have to ask builders to be straight to the point but if I will ask anyway that they be as brief as possible in their answers. I will start with the CIF and the Irish Home Builders Association. What is their reaction to the announcement today on the wastewater measures for developments of up to 40 units in villages and smaller towns? Do they think this is an important measure?

Mr. Conor O'Connell:

I will hand over to our chair.

Mr. Michael Kelleher:

It is very important. In a lot of cases, these villages do not have treatment plants and are working from individual systems. We see it as very important.

Séamus McGrath (Cork South-Central, Fianna Fail)
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It is a welcome measure. The witnesses have outlined the issues in terms of the challenges that are there but what frustrates many of us is when there are planning permissions in place, so land is not an issue, and services are not necessarily an issue, yet development is not commencing. It was mentioned that planning permissions are running out but there are still developments with planning permission that have not been commenced. Why is that, in the main? I direct that question to the Irish Home Builders Association.

Mr. Conor O'Connell:

Any analysis we have seen on the number of planning permissions that still have not been activated are largely for apartments. That is why it was so critical that a number of measures were taken recently to aid apartment delivery. The institutional investors have largely left the Irish market. There was a decline in institutional investment, from €2 billion in 2022 to €124 million in 2024. That indicates the significant challenge.

At the moment, the biggest purchaser of apartments is the State, through various mechanisms, including the approved housing bodies sector, which is represented here. By and large, the Land Development Agency is the biggest purchaser of apartments in Ireland. If we want to achieve our housing targets of 50,500, it is critical that we attract back international capital to build all types of housing.

Mr. Michael Kelleher:

The other issue is that national policy is being implemented throughout regional Ireland in the same way. Our planning system is deciding on densities that are unviable in most locations. There is a need for a more balanced approach. Guidelines were introduced on compact growth, which is very welcome, and for own door housing, which can get up to high densities. This needs to be looked at. If we want to solve this crisis, we need to be building throughout Ireland. Therefore, while apartments are very important and are obviously located next to key hubs, as stated previously, we need to be building across Ireland. If we are to have communities throughout Ireland, we must be building there too and we are not. The densities need to change.

Séamus McGrath (Cork South-Central, Fianna Fail)
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The wastewater point speaks to that.

Mr. Michael Kelleher:

Yes.

Séamus McGrath (Cork South-Central, Fianna Fail)
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I will challenge the sector a little. I was on a site in Cork last week, which was very much embracing modern methods of construction, both on-site and off-site, and turning around a house in nine weeks. Most of the witnesses did not mention modern methods of construction in their submissions or opening statements. Does the sector need to embrace them more?

Mr. Conor O'Connell:

It takes 26 weeks to build a house. It might take a bit less, depending on the circumstances. The biggest challenges we face, which are measured in years, are the delays before we get to site. That is why we have not mentioned modern methods of construction.

Séamus McGrath (Cork South-Central, Fianna Fail)
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I appreciate that.

Mr. Conor O'Connell:

The biggest challenge to delivering the houses is not the actual construction. Once we get on-site, that is the easy part. The biggest challenge is getting the land through the planning system and eventually getting the infrastructure in place to deliver the housing. Obviously, modern methods of construction are being widely used. What builder would not build in the most efficient way possible?

Séamus McGrath (Cork South-Central, Fianna Fail)
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I have a final question for the home builders association. Where does it see housing output this year landing? I ask for a rough estimate.

Mr. Michael Prenty:

It is hard to tell because at this time year, extra units come in with Christmas approaching.

Séamus McGrath (Cork South-Central, Fianna Fail)
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What is the best estimate?

Mr. Michael Prenty:

I would say in the low 30,000s.

Séamus McGrath (Cork South-Central, Fianna Fail)
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Moving to some of the developers represented here, Cairn Homes focused a lot on apartments. Have the measures taken by Government helped bridge the viability gap?

Mr. Michael Stanley:

Absolutely, yes. Obviously, there has to be a tipping point on viability. We believe the low build cost inflation environment we have at the moment, which has been positive over the past couple of years following a very difficult period of build cost inflation, allied with the changes in VAT and, just as important, the implementation of the new apartment guidelines, will encourage a significant increase in apartment commencements. That is allied with realisable demand being created by many of the things we talked about today, such as the policy measures that support the funding challenges Mr. O'Gorman spoke about, which face the alliance.

We all share the view, and we absolutely agree with Mr. Kelleher's view, that we have a national issue and apartments are not the only answer. The reason we probably focused on it is that it is the bigger challenge and we have built very consistent, high levels of own door housing. We need to build more apartments nationally, and I agree with Mr. Kelleher on that, but apartments have been the area we have not been able to crack. The output of apartments fell to 8,000 units last year. Croí cónaithe is critical. We believe young people want to live in apartments in Ireland.

Séamus McGrath (Cork South-Central, Fianna Fail)
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Does Mr. Stanley see the combination of measures such as the VAT change, the design standards and croí cónaithe bridging the viability gap in many cases?

Mr. Michael Stanley:

Yes.

Séamus McGrath (Cork South-Central, Fianna Fail)
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I will leave it at that. I turn to Glenveagh. In its opening statement, it made reference to heavy regulation, misguided regulatory changes and so on. Could Glenveagh elaborate a little on that?

Mr. Stephen Garvey:

As Mr. Stanley said with apartments, they were the single biggest challenge to viability. The regulations the Minister introduced aligned us with European and UK standards and closed that gap by somewhere between €50,000 and €60,000. The gap in viability was €100,000. The VAT made a substantial difference and really closed the gap on that.

On removing the mix, some local authorities require 40% three-bedroom units. The reality is that delivering three-bedroom units is fundamentally challenging. There were not customers for them and the approved housing bodies could talk to that. Even from a cost-rental perspective, three-bedroom units are the most challenging unit to rent out. Those kinds of issues are seen across the board. Sometimes, we seek perfection instead of trying to make progress. That is the issue we see.

Séamus McGrath (Cork South-Central, Fianna Fail)
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Is there more to be done with the regulatory framework as far as Glenveagh is concerned?

Mr. Stephen Garvey:

I think there is. A simple one is this. We will have close to 6 million people in the near future. We have 31 local authorities and 31 different standards. If we are to deliver housing at scale, we need to standardise our approach to delivering housing. It is the only way to get economies of scale and bring efficiencies into the system.

Séamus McGrath (Cork South-Central, Fianna Fail)
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I am caught for time but I hope to come back with other questions. I thank the witnesses.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I thank everybody for the opening presentations and the additional information. Most of us in this committee believe we need to roughly double new housing output to meet the level of demand that is there. All of the sectors represented here are essential. Even on those areas where we do not necessarily agree on policy detail, all of them are essential to the delivery of those homes that the people we represent need. I want to say that at the outset. It is important that we have robust exchanges. I will respond first to a couple of the points on the record and then ask some questions.

I have a lot of sympathy for all of the asks that have been set out in the main statements from the AHB sector, the small and medium sector and the large public limited companies. In the last couple of months, however, some language has crept into our public housing debate that I do not think is helpful. I am not picking on Mr. Garvey but talking about planning elites is not helpful. I want to say that because Clonburris is in my constituency. I have been on-site with the Cairn team during construction. I have been on it since the planning elite that he talks about planned that. I was on the council when it did it. The largest high-density housing scheme in the history of the State is Poolbeg West. It is a really good scheme. The planning elite Mr. Garvey is talking about designed that. Councillors from all political parties unanimously agreed that. It has hit some planning challenges. There are, therefore, occasions where stuff happens and we need to ask ourselves why more of it is not happening, rather than engaging with debates that seek to create a certain level of division.

We also need a little bit of honesty in our conversation about judicial reviews in housing. Unless something has changed in the past six months, my understanding is the shift from strategic housing development, SHD, to large-scale residential development, LRD, has seen a dramatic reduction in judicial reviews of housing schemes. That is a really important development. If that is no longer the case, I would like to know. Developers also take judicial reviews. In fact, the appeal of Clonburris, which was not a judicial review but an appeal to An Bord Pleanála, was taken by developers and Government politicians. They had their arguments for it and I am not criticising them for that. There has been a significant increase in judicial reviews in recent times on the developer side. That is not necessarily criticising them but we need to have a much more collaborative debate to highlight the things that are working and do more of those. My questions are in that context.

For me, one of the big issues that does not get debated enough - Mr O'Connell and I have spoken about this before - is the SME builder developer sector. We have two and a half large companies, Glenveagh, Cairn and Evara, that are doing 5,000 or 6,000 units a year.

Everybody else in terms of the builder-developer community is in and around 200, 250 or 300 units. If we are to double output, one of the key sectors is the SME builder-developer sector. Regarding some of the barriers before you get on site, will the witnesses emphasise some of the key barriers that if addressed, would enable the SME sector in particular, as represented by the Irish Home Builders Association?

My question for the AHB sector is slightly off tangent. There has been a reduction in VAT and that is about viability. All of the stuff the AHB sector will forward purchase is already viable because they already have purchase agreements. Since that change, are AHBs getting the benefit of those VAT reductions, without naming projects or individual developers? If they are not, what is the cost of that, because it is not just the cost per unit, it is the additional borrowing and interest cost the sector is paying? How does that affect affordability for the sector's cost-rental tenants?

Mr. Conor O'Connell:

Regarding the SME sector in particular, over the past two years, we have seen an alignment. The problems are the same regardless of whether you are a small or big builder. It is access to land and infrastructure and the regulatory environment around those two areas in particular. Getting through the planning system is a regulatory burden. It has changed significantly all the requirements at local authority level. There are problems when you go to connect your infrastructure and get your connection agreement. There were problems in Portlaoise during the first six months of this year. The capacity at the ESB substation was not there to deliver housing that was halfway completed. There were 70 units in Portlaoise that could not be connected to the local substation because the capacity had been used up. That is a typical scenario that has arisen largely in the eastern part of the country over the past number of years.

Similarly, with regard to connection agreements, there might be issues relating to the capacity of the wastewater treatment plant. As housing has developed in a local town, the capacity within the wastewater treatment plant has been used up. That is extremely challenging when you have your planning and funding in place. Suddenly you cannot build out, sell the units and recycle funding. For a SME builder, that is a very significant issue.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Regarding today's announcement in the Minister's statement about developer-provided wastewater treatment infrastructure, the developer has to pay the cost. It is very clear that the Minister expects small to medium-sized builders to bear that cost and there is no compensation for that. Does Mr. O'Connell think that bit of the proposal today is sensible or will work?

Mr. Conor O'Connell:

It is like everything. It is about the detail. From our perspective and from what we hear from our members, it is not so much a policy issue at this stage, rather it is the regulatory detail. I would need to see the detail of what is being proposed. There are 300 settlement areas in Ireland that need upgrades to their wastewater treatment plants. There are modular solutions available for those 300 settlement areas. It involves how much is that modular unit to simply crane into a wastewater treatment plant to connect, how long it will take to get through the EPA licensing or certification requirements for discharges and the costs around all that. It depends on how many units a builder or developer may have that it could connect to the system and then-----

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I presume cost would be a challenge.

Mr. Conor O'Connell:

Absolutely. Everything is cost-sensitive at the moment.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Could Mr. O'Gorman or Mr. Culhane answer my question about the VAT reduction pass on?

Mr. Brian O'Gorman:

They are two elements of it. Certainly the VAT reduction needs to be applied to forward funding. At the moment, it is just turnkey. There are indications that this is going to change but certainly it would make more projects viable.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Regarding forward purchasing, is it being passed for the schemes that are under contract?

Mr. Brian O'Gorman:

It varies. Some developers are passing it on while others are not. Some of them are saying that if the VAT was increased, they would carry the risk in terms of the contractual position, so if it decreases, effectively they-----

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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In a case where it is not passed on, is the consequence of the additional borrowing requirement and interest rate on that borrowing requirement significant? Is it probably costing the AHB sector more than the VAT reduction?

Mr. Brian O'Gorman:

Not really. It is not making it more expensive. The schemes that were already viable continue to be viable. It is making some difference in terms of schemes that are in the pipeline. If that does go through the system, some schemes we were challenged to make viable will become viable, but the experience varies. Some developers are giving it to the end user while others are saying it is an increase. We took the risk on increased VAT structure so we take the benefit when it is reduced.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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Given that I named Mr. Garvey as a member of the planning elite, I want to give him the opportunity to respond. There are many elite planners in his organisation who are very skilled and experienced. Is that really the way we need to be talking about this?

Mr. Stephen Garvey:

Point taken. I did say it was an element. Regarding the frustration we are seeing with elements of the planning system, Clonburris was an excellent scheme that was excellently planned. The people behind it did a fantastic job. Are those people in the planning system today? I am not so sure. It is probably 20-odd years since Clonburris was conceived. I am not sure we still have the same degree of planners. Regarding some elements of local area plans, perfection is the enemy of the very good. People are not being pragmatic. We have seen recent examples where we are trying to get sites delivered. We are coming to the table delivering somewhere between €50 million and €60 million euro worth of infrastructure and the planning system is not being progressed by the other side. That is the challenge we are seeing. We are in crisis mode on infrastructure so that is a real challenge in judicial reviews.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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But I am right regarding the reduction in judicial reviews on large-scale residential developments, LRDs. That is still the case?

Séamus McGrath (Cork South-Central, Fianna Fail)
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The Deputy is a minute over time. We will have to come back.

Paula Butterly (Louth, Fine Gael)
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My first question is for Glenveagh, Cairn and Castlethorn. Regarding judicial reviews, notwithstanding the fact that I am a qualified barrister, I will probably take a different view to that of Deputy Ó Broin. There are certainly blockages there in terms of judicial reviews and delays. When developers are planning, and my understanding is that it takes, on average, just over two years to get planning through for housing estates and, on average, over four years for apartments, how much does that cost the company outside of the missing 200 or 2,000 missing homes? What is the actual cost to the company in terms of time and future projects? Has that been estimated?

Mr. Stephen Garvey:

We have a scheme in County Clare that has been awaiting a decision for two years. We estimate the cost per unit at similar to that of the LDA, which is about €30,000 per unit. We are still awaiting a decision on that development. We have seen how some schemes can wait up to four years while some schemes have had two, three or four judicial reviews. Our main concern involves about 117 judicial reviews in the system so far this year, of which 25% involve housing while 25% involve infrastructure. It is probably more concerning on the infrastructure side. We cannot deliver housing if we cannot deliver infrastructure.

Mr. Michael Stanley:

The only thing I would add echoes some of Mr. O'Gorman's points. Maybe it is the best way to understand it. Time is important to a development but what that affects is the total amount of capital that needs to be invested for one type of product versus the other. If any home builder is building a traditional low-density scheme, the old saying goes that you can build a third of the street and sell it. The peak working capital requirement for a low-density housing scheme can be as low as €10 million or €15 million. That is the amount you have to invest into the ground before you get to the first completed home. You hand the keys over the first purchaser, which recoups your investment. Apartments are dramatically different. Peak working capital for mid-sized and large apartment schemes can be between €80 million and €100 million just for one apartment development. This echoes what the Housing Alliance is talking about. The capital requirement to deliver apartments is so much larger.

Regarding our planning system and judicial reviews, there is a lot of misunderstanding about who drives and decides what we apply for as an industry. We do not. We have no say whatsoever in the density per hectare we put into our planning applications. That is dictated by the national development plan implemented by local authorities. Regarding a piece of land we own, and this can change based on the national planning framework or whatever central policy is adjusted or refined, we must build apartments because the density target is set.

If is lower, we can build houses. Today, it is extraordinary when we look at the available land that is currently zoned to build on, about 85% of it sits in that medium to high-density bracket. There is a misunderstanding about who dictates the unit typology and the type of homes we build. It is not like we have a choice. Funding is interconnected with delivery, delivery cost and that quantum of funding that is needed to build apartment schemes.

Mr. Ronan Columb:

On the judicial review piece, the consequence of the amount of JRs has been that we are much more careful about making our planning applications. It takes much longer to put them together. The amount of effort and paperwork associated with planning applications has ballooned considerably over the last number of years. We are putting our applications through legal review to minimise the chance of there being an error or grounds for a JR. It creates a fear of risk in our development community. We invest very heavily. A planning application for a few hundred houses could cost €1 million and take two years to put together. All of that could go up in smoke if there is a judicial review and the planning is overturned. Investors, who we as an industry rely on, are in fear of that process as well. It casts a cold shadow over the industry. That is the key concern with it. As Mr. Garvey said, where it is now being targeted more at infrastructure than in housing, it is an even greater societal risk. Our general view is that we have to ask sometimes where the common good lies. That is how we should measure our response to these things.

Paula Butterly (Louth, Fine Gael)
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In essence, what we are all saying here is that because of the planning regulations and the number of judicial reviews, not only are we denying young people homes within the country but ultimately, if it is built, we are actually adding the cost to the young couple. They are picking up the bill because of these delays as well.

Mr. Ronan Columb:

Unfortunately, yes.

Paula Butterly (Louth, Fine Gael)
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It has been a hot topic but the world and his mother have heard about these barriers over the last year, and the very fact that we need to bring forward different legislation on planning. A lot of people, myself included, have been talking about emergency legislation to deal with it. Let us say the Minister wakes up in the morning and decides to bring forth this emergency legislation and we can all get going and start building homes. On access to labour and lands, we have discussed finance. By how much could all the organisations present ramp up production? Cairn Homes said it has around 2,000 units a year. How many more homes would be built and how much closer to our target of 60,000 would we get if we introduced emergency legislation? I have a very quick follow-up question. I am running out of time and the Cathaoirleach is going to knock me off, no doubt. The term "vulture fund" has often been confounded with institutional financing. I believe there is a gap of approximately €14 billion to be found. That needs to come from institutional finance. How do our guests suggest actually accessing that if it were to be made available?

Mr. Ronan Columb:

On the funding piece, we have not been kind to international funders. We need a stable policy platform for them to fall in love with Ireland again and come back and feel they are investing in a safe and stable place. In terms of capacity, Castlethorn is operating at about 60% capacity at the moment. We have headroom to grow considerably more. We have the ability to deliver about 2,500 units a year. We are doing about 60% of that at the moment. I would hazard a guess that our colleagues in the industry are operating at less than that capacity and have considerable room to grow. I am very confident that we have the ability to deliver the increased amount if we are enabled to do it.

Mr. Stephen Garvey:

Likewise, we have three factory facilities located across the country. We are the single biggest producer of timber frame. We probably have capacity to match whatever the national supply is. We were at 8% last year. If we have to go up to 10% we have the capability of doing that. We have made investment in our platforms to do that. The environment needs to be cleared and to be there to achieve that.

Paula Butterly (Louth, Fine Gael)
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Can you put a number on it?

Mr. Stephen Garvey:

If the country was doing 50,000, it is how long it would take us to step up to that 50,000 units if we are doing somewhere between 4,000 and 4,500 units.

Mr. Michael Stanley:

I would echo what has been said. I think there is capacity for us and the sector to grow. I do not think labour is a massive constraint. Obviously we need to invest in apprenticeship programmes and bring more young people into the industry. If we do that successfully, we can further enhance capacity.

Rory Hearne (Dublin North-West, Social Democrats)
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I thank everyone for coming in today. It is a big crew. It is frustrating that we have a short amount of time to go through these things. I have a couple of questions for different groups, starting with CIF and Mr. O'Connell. We all want to see affordable homes. That is what we need. In my view the main type of supply should be affordable homes. On reducing the cost of delivery, land and infrastructure and then finance, there is a serious danger that if we zone lots more land, it will be bought up, hoarded and speculated. Rather than zoning leading to more affordable land input, it essentially adds to the cost. In the Netherlands, the state compulsorily purchases a large amount of land, master-plans it and puts in the infrastructure, and then contracts builders to build. I do not know if Mr. O'Connell has a comment on that. The other area is finance. What is the CIF's experience of getting finance from the State through Home Building Finance Ireland and other State agencies? Is there more we could be doing to provide finance to builders through the State? We put forward our own proposal for a new savings scheme on that.

To the Housing Alliance, we spoke before about delays in cost rental and social housing. Has there been any update on that? It was mentioned in the opening statement. What does the Housing Alliance see as its capacity to ramp up delivery of affordable housing?

To Glenveagh and Cairn, there is a big issue which we have discussed previously and which I have raised often. I have no problem with the private market delivering housing. While it has a key role, I believe the State should also be a builder and developer. I do not see any reason we should not have the State and the private sector both delivering. In terms of Glenveagh's and Cairn's financial model, is there a fundamental issue in that they are shareholder-type companies? They are delivering homes and want to maximise the homes they are trying to deliver but there is that other aspect of maximising the return to their shareholders. Ultimately that is what they are about. Do they feel that part of the cost reduction that could happen in housing would be reducing the amount of dividend going to shareholders in their companies? For Cairn last year the figure was €111 million, which I estimate to be about €50,000 per home sold last year. A lot of people would have concerns that significant public money is going to their shareholders. I have looked through the shareholders and for both Cairn and Glenveagh, they are large, global wealth funds such as J.P. Morgan, Fidelity, BlackRock, and Tellus Capital. They are not just builders who are building and putting the money back into housing. There is a significant issue with this return of dividend to shareholders. I wonder if our guests could comment on that.

Mr. Conor O'Connell:

On HBFI in particular, a few years ago it was impossible to get house building finance in many regional locations. HBFI came into being and now small builders right around Ireland can get finance. Looking at the regional map of locations where they are financing, I think they are in every county in Ireland at this stage. If we did not have them, the homes in these locations would not be built, and we need to build homes everywhere. On zoning and land, there is a lot of-----

Rory Hearne (Dublin North-West, Social Democrats)
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Sorry, can I just come back in there? It is said often that lack of access to finance is a major issue but Mr. O'Connell is saying builders can access finance.

Mr. Conor O'Connell:

They can access finance, but the problem is the cost. For the smaller builders there is an equity issue as well. They find it difficult. The Deputy is talking about the profitability of the house building sector. For many house builders, equity would not be a problem if there was greater profitability for them. At the moment the smaller builders have difficulty securing the finance and part of the difficulty of securing the finance is because they cannot have enough equity to proceed, so HBFI is absolutely vital.

Rory Hearne (Dublin North-West, Social Democrats)
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The State could provide more lending that would not require equity in the same way as the private sector.

Mr. Conor O'Connell:

Absolutely. We understand HBFI is looking in particular at an equity product for the small- and medium-sized builders. We look forward to that but really it is the cost and the cost of finance has been one of the greater barriers.

Just on land, we have a zoning policy in Ireland. That policy came about as a result of the national planning framework that used the 2016 census to estimate the population growth and the amount of land that would be required to cater for that population growth. There is a constriction based on outdated data with the supply of land. That is the most fundamental problem with the cost structures in relation to land. The other issue with the cost structures in relation to land is because there is so little of it and so few services on the remaining land, the price point could be reduced significantly if we had greater land banks with greater infrastructure. That is not just for greenfield but for brownfield as well.

Rory Hearne (Dublin North-West, Social Democrats)
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Okay. I thank Mr. O'Connell.

Mr. Michael Kelleher:

From the point of view of our industry, we have a national planning framework, which is plan-led development. We know where we want to build and we should put the infrastructure in there and be ahead of the curve so the land is available. That is where we need to get to and why it is so important the infrastructure is fast-tracked and that we look at that as how we can, over the next couple of years, get the pipes into the ground, otherwise we are never going to get ahead of this.

The other point goes back to the planning. If we could get certainty in the planning system even the pillar banks would be able to have line of sight to delivery of units. At the moment it is very uncertain, the timelines are too uncertain and the risk is too high, in their view.

Rory Hearne (Dublin North-West, Social Democrats)
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I thank Mr. Kelleher. Do Mr. Culhane, Ms Dunkin or Mr. O'Gorman want to come in?

Mr. Aidan Culhane:

I will just answer the Deputy's question on the delays on the social rental side, which were certainly an issue for some organisations in the latter part of last year and into this year. My organisation did not experience them but others in the Housing Alliance did. They have substantially gone away in terms of social housing. I am going to hand over to Mr. O'Gorman on the mixed tenure one. The social housing approval is coming through but the cost rental may be delayed and because in a mixed-tenure scheme both sets of approvals are needed to commence, those delays are continuing. That is a problem. As Mr. O'Gorman alluded to in the opening statement, there needs to be a single-stage process where a whole scheme can be approved. Whether we are partnering with a developer or doing it ourselves we cannot start until all the approvals are through, especially with apartments because obviously you cannot start a scheme without knowing you are going to be able to finish it.

Mr. Brian O'Gorman:

To echo Mr. Culhane's point, we are still out of step when it comes to cost rental and social rental proceeding together, which creates huge frustrations. I would like to see us ultimately get rid of the difference between social rental and cost rental. People should be housed because they need housing and then a support system should be put in place for those who need it. We have an artificial mix. No local authority wants to go back to a situation where we build large, monotenure estates and we support them in that. We want our estates and our developments to represent all components of society, meaning social rental, cost rental and owner-occupied as well.

To finish on the point on-----

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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We are running out of time so I will just give Mr. O'Gorman 20 seconds.

Mr. Brian O'Gorman:

Okay. On the capacity, we developed 6,000 homes in 2024. We have a proven track record. We believe we can develop 25,000 homes over the next three years. We can considerably contribute towards the social and affordable housing need.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I will let the witnesses from Cairns and Glenveagh reply.

Mr. Stephen Garvey:

On the land, we build on both private and State land. The State is the single biggest owner of land in the country. We are on a number of those developments, so that model works and we are all delivering on that and happy to see more of it. If we zone enough land there will not be enough capital available for it so it will not be expensive. The biggest buyer of land in the last 12 months has been the Land Development Agency. It has been most active in buying land. Land represents such a small percentage of the overall development. For example, we have an apartment development where the land represents only 3% of the cost, which is less than contingency. As such, the land is not the component that is causing the issues.

The Deputy asked about our financial model. We IPOed, that is, became a public company, in 2017. We were one of six companies at that time that were property companies and now only three of us exist. We have turned over €3.5 billion, delivered over 9,000 units as well as community facilities and we have made €217 million, which is a 6% return. If we had put our equity into the banks we would have made just as much. That is why the challenge is that the others are not coming over the hill. The returns are not there. We have shareholders we have to return money to but they are not going to invest in schemes that do not make sense for them. Those are the facts. We have built three factories and hired over 1,500 people. We have 3,500 people going through our sites daily. That is what our returns are. That is why it is so hard to get access to capital. For the quantum of capital we need in this country that is the problem.

Mr. Michael Stanley:

If I can answer on that, I 100% agree with the Deputy there does not need to be different solutions between State and private. We need to encourage all providers of housing to step up. He has my commitment, and I think the industry's commitment, we are going to step up and try to deliver more housing. We will invest in growth. That is a commitment we want to make. To Mr. Garvey's point, we have prioritised growth over return, genuinely, over the last number of years and we will continue to do that. However, the housing crisis needs parallel solutions. It needs all delivery partners to step up. We need the AHB alliance, we need a successful LDA, we need local authority delivery, we need direct State build and we need the private sector to increase. The good news is we agree with the Deputy that it does not have to be either-or. It has to be every actor within the industry stepping up and producing more homes. That is what will ultimately, we hope, solve the problem. I thank the Deputy for the question.

Aubrey McCarthy (Independent)
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I thank everybody for being here. It is a full house and the solutions are certainly in this room. We all have a common goal, namely, we want to see more homes, we want to see them built faster and we also want them to be affordable.

If we look across the witnesses’ statements, it is all about infrastructure delays, planning inconsistencies, judicial reviews have been mentioned, etc. We have been talking in this committee for a number of months about the blockages and where they lie. The blockage with local authorities was the numbers were not being released. Now the section 28 has come in and we have had the Minister’s decree that all councils build. In general, where is the blockage now? The white flag has been raised and I am wondering where the blockages are. Also, Mr. O’Connell mentioned Portlaoise and 70 houses not being able to be finished because of the substation. We have had Uisce Éireann and the ESB in here and they are telling us the viability for building in Ireland is 30,000 houses, unless the infrastructure is increased, yet the Government figures are much higher. There seems to be a huge gap there. In my home town of Naas and in Kildare town there are two sites that are tier 1 yet they are not being developed. They have been zoned but they have not been given permission, so there seem to be blockages there. In today’s news, as Deputy McGrath mentioned, the water treatment plants in rural areas can be funded by the builder. There are no grants for that, it seems, so that will be passed on to the purchaser. The purchaser is paying taxes, rates and all the taxes they pay so technically the ordinary taxpayer is being charged twice for water and all the amenities that are being done.

I want to ask Cairn something. Mr. Stanley mentioned how the future sort of lies in apartments and we are at something like 29%, whereas we need to get to 50%. Will the new regulation regarding the 32 sq. m and the VAT measure solve it or is there another lever we need to pull to get this off the ground? I would also like to ask which European country has the best state of play so we can follow its lead. Those are my first questions.

Mr. Conor O'Connell:

I will try to be as quick as possible. We are extremely disappointed. At the end of July, the section 28 guidelines were issued. The Minister has written twice to local authorities. Some local authorities have been very proactive in zoning more land, but we are disappointed, to the say the least, that certain local authorities have not followed the Minister's request to zone more land at this stage and it seems there is no timeline for doing so. This is happening in the most populous areas of Ireland, where it is simply the case that development plans were adopted several years ago, land banks are being built on and no replacement land is coming forward. The supply of zoned land to the sector is being further constrained and it is becoming a crisis and an emergency.

Aubrey McCarthy (Independent)
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Where is the blockage? Is it with the councillors or planners?

Mr. Conor O'Connell:

That is a good question and I would love to know the real answer to it. It seems to be a mixture of both. Perhaps senior planners or certain directors of services have a particular viewpoint on the zoning of land. Whatever the reason, the fact is that on the ground at the moment builders are running out of land they can build on and there is no visibility of a pipeline.

Aubrey McCarthy (Independent)
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Is that decision not down to the councillors?

Mr. David Kennedy:

The Senator asked where the blockages were today. If I were to pick out two points, the first would be zoning. To amplify the point significantly, Goodbody undertook a report about 12 months ago on the amount of zoned land in the greater Dublin area and found there was a shortage of some 70,000 units. What the report was silent on but that became evident when looked into was that there was capacity in the system 12 months ago to build 70,000 units in the greater Dublin area. Looking at the densities involved in those sites, only 18,000 to 20,000 houses in the greater Dublin area will be available on zoned land to cover the next five years. A person does not have to be an expert to know that is not enough.

The reaction or the way to unblock that is to proceed with variations to the plan. This is not a question of changing development plans in 2027 or 2028. If we are to achieve significant levels of housing activity - I will come back to apartments in a minute - a significant increase in zoned land has to come about through variations of the county plans in every county, particularly in the greater Dublin area. It does not matter whether through the permanent council or councillors, it needs to happen. We talked about the-----

Aubrey McCarthy (Independent)
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If they underzone, does that not go straight back to the Planning Regulator, who will say they are not doing their job?

Mr. David Kennedy:

The only thing we can make a mistake on is underzoning. If we overzone, is that a mistake? I do not think so. It is a mistake if we underzone. We have to zone enough land and enable it immediately.

On the second blockage, much has been said in the media in recent times about the culture of restraint and constraint and systems and processes that are designed to constrain or restrain activity. That culture needs to change across the board to one of enabling activity and accelerating activity and of a can-do attitude. They are the key blockages and the key-----

Aubrey McCarthy (Independent)
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I apologise for reiterating my question. Am I naïve or is it not the elected members who have a responsibility under section 28 to start building? Mr. Prenty is shaking his head.

Mr. Michael Prenty:

In my experience so far, the senior planners are dictating what gets zoned and most of the county councillors I speak to - I deal with a lot of the councils across the greater Dublin area - are in favour of zoning more land. With how the systems works, unless it is put in front of them, they do not have any power to zone it.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Would the witnesses be able to provide the committee with a report on the local authorities across the country?

Mr. Conor O'Connell:

We have commenced the process, but I will defer to a colleague, Mr. Caffrey, who is a planner. He is trying to get in.

Mr. David Caffrey:

I might be able to answer the query directly. The section 28 guidance from the Minister issued in July mandated the local authorities to review their current development plans to determine their suitability as regards the amount of zoned land and if, having undertaken that exercise, there was an inadequate amount of zoned land, to bring forward a variation process. The responsibility in the first instance therefore sits with the executive of the council to assess the development plan and thereafter to bring forward the variation. Then at that stage, the elected members have a responsibility.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Mr. Stanley was asked a specific question.

Mr. Michael Stanley:

It was on the guidelines, but I will pass over to my colleague Ms Loughrey-Grant on the European or international example as, luckily, she has just joined us recently from an international career, mainly in the UK, with a good Irish company called Laing O'Rourke.

Ms Madeleina Loughrey-Grant:

Yes, that is it.

Ireland has changed hugely in the past 21 years and coming back and taking a step back to have a look at the resilience of our economy, I note we have a budget surplus that is the envy of many nations. We talked about policy and mention was made of the Netherlands. There will be many policy lessons from across Europe. The UK Government's finances at the moment are far more constrained than ours. However, despite the different contexts of the UK and Ireland, the challenges in the two are similar in terms of all the issues we talked about today, such as planning issues, infrastructure sequencing, construction capacity, skills and affordability. I will mention one example of how infrastructure can unlock housing. It is the impact the Elizabeth line had in the UK on enabling the building of about 55,000 new homes within 1 km of stations. It drove growth and regeneration around those station areas and brought increased investor confidence. To pull on the thread around investment in infrastructure and major transport, it builds confidence, unlocks land, enables mixed tenure housing and is an engine for both homes and social mobility. It is something we need to focus on.

Mr. Conor O'Connell:

May I answer the question on monitoring? We have just started the process of monitoring the local area development plans and what is happening with the variation process.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Would the Irish Home Builders Association be able to supply the committee with a report?

Mr. Conor O'Connell:

We will. It will take time as the chief executive reports are completed an so on. We would be delighted to.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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It is an issue. When the association is doing that work, we would like to see it. I thank the witnesses.

We will go into private session for a few minutes for a comfort break.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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The next speaker is Senator Joe Flaherty.

Joe Flaherty (Fianna Fail)
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I welcome all the speakers. The discussion has been very informative and I have learnt an awful lot from what they have provided. There will be some ideological differences in how we address the housing crisis, but the policies we have at the moment are the policies we have and we have four years to sort this out. We will work with what we have, and if there is a change of Government, there will be some new alternative.

I will look at Cairn first and I will probably come to Ms Loughrey-Grant, especially seeing as she is back from Laing O'Rourke. I spent a summer working with Laing O'Rourke. I decided then that construction was not for me and that politics was an easier life. I hope Ms Loughrey-Grant fared much better with Ray and Des O'Rourke than I did, but that is an aside. Cairn has done a lot of work. In relation to apartments, I think the optimum figure we need to get to is 30,000 per annum. I assume that is predominantly Dublin and the other major urban centres. From January 2020 to July 2025, 114,000 apartments were applied for. We will say 69,000 of those have been consented, but only 28,000 have been commenced. That is less than half. We hear about the issue with the land. Why have we commenced only 28,000, less than half of the 69,000 consented?

Ms Madeleina Loughrey-Grant:

Like a good politician, I will defer to my learned colleague on my left.

Joe Flaherty (Fianna Fail)
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Good stuff.

Mr. Michael Stanley:

One thing that has not been raised today - and we talked earlier about judicial reviews-----

Joe Flaherty (Fianna Fail)
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There is no judicial review. These are consented. They should be started.

Mr. Michael Stanley:

Yes, but what I am referring to are the new planning guidelines. We believe that those new planning guidelines are critical to-----

Joe Flaherty (Fianna Fail)
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These are consented. Of 69,000 apartments consented, we have only 28,000, so there is nothing about guidelines, judicial reviews on-----

Mr. Michael Stanley:

That is absolutely fair.

Joe Flaherty (Fianna Fail)
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Yes, so why have only less than 50% been started? I know this is not all Cairn and that it is all the builders, but why are they not started?

Mr. Michael Stanley:

I think we touched on lots of things around viability and-----

Joe Flaherty (Fianna Fail)
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Construction inflation is 7% now. We have all accepted that. Some of the witnesses are telling us they are operating at 60% capacity. I accept the challenges they have but I cannot get my head around this. If they have all those apartments, is it the case that somebody is sitting on them waiting for the proper-----

Mr. Michael Stanley:

No, I think it is the fundamental difference between demand and realisable demand.

Joe Flaherty (Fianna Fail)
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The demand is there.

Mr. Michael Stanley:

Yes, but realisable demand is very different. Realisable demand is people at the end with mortgage finance or whatever who can afford to buy the apartment. That is why croí cónaithe is critical to home ownership. We have touched on that. It is the reason for funding for AHBs and the LDA's role. Apartments are needed across all tenures for people to trade down. We are starting our first very large elderly living apartment scheme. We need more student accommodation. I could go on and on-----

Joe Flaherty (Fianna Fail)
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I know we do. I do not want to run over my time. I am concerned that that level of inactivity is there-----

Mr. Michael Stanley:

It is a very reasonable concern.

Joe Flaherty (Fianna Fail)
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-----and I have had nobody answer that sufficiently, but I will come to the other witnesses in a minute.

Mr. James Benson:

One aspect worth bearing in mind in that regard is that while that is the large number of consents that have navigated their way through the system, when there are a number of conditions imposed during the consent and planning, it is not always possible to start in a short space of time. Often you can see there is a requirement for additional-----

Joe Flaherty (Fianna Fail)
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I accept that the infrastructure and the ESB and all that can be a factor all right.

Mr. James Benson:

Even with additional infrastructure and where the underinvestment over the course of the past decade has been followed by improvements in roads, lighting, power, water and the grid, there is a requirement for other sequencing of works to happen in advance of commencement of this stage. We would have seen that across a number of the conditions imposed.

Mr. Michael Stanley:

The good news is that those apartments represent the biggest opportunity for our industry to step up-----

Joe Flaherty (Fianna Fail)
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Exactly, and Cairn needs to move on them.

I am down to four minutes now. The next question is for Cairn as well. Some 56% of our investment is in social housing, with 23% in first-time buyers and 10% in infrastructure, which tells its own story. Would it be fair to say that, between the Government and approved housing bodies, we are probably able to address in the main the social housing except perhaps for cost rental and that our focus should be on giving builders the capacity to go after what I would call the commercial house building market? Would that be a reasonable thing to say?

Mr. Michael Stanley:

No, because affordable housing today in Ireland represents a very low proportion of our homes - too low. We have a situation in Ireland where-----

Joe Flaherty (Fianna Fail)
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I would put affordable under commercial. I come on to my second point then. Within that level of investment, we are investing only 23% in first-time buyers. We should really be ramping up the scale of what we give first-time buyers the minute you can claim back your tax. We got burnt when we did it back in the noughties with the regeneration schemes and all that, but we have to incentivise people through tax and through the pocket to buy homes now. Is that not the reality? We have to make it easier for them. We have done everything else. We have invested in social housing at 56%.

We cannot do much more for social housing but it is a case of having to put money in people's pockets in order that they can buy the houses off these development companies. Is that fair to say?

Mr. Michael Stanley:

Our job is to deliver, not to appoint a policy. That is not our role. We have to step up and deliver more homes. Demand- and supply-side measures are a tricky balance, and those policy measures are with somebody else. I do not know if Mr. Garvey wants to come in on this.

Joe Flaherty (Fianna Fail)
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Before he does, I want to turn to Castlethorn because I am from Longford and there is an affinity with Joe O'Reilly so it would be remiss if we did not ask Castlethorn some of the questions.

Developers are at 60% capacity and the accelerating infrastructure task force has been established. We were expecting to get a report from that in July. I checked the minutes from September and it is working on its final report. Has that task force spoken to witnesses about the projects they have and what they need to do, in terms of infrastructure, to get them over the line? Or have they heard anything from the task force?

Mr. Ronan Columb:

Not directly, yet.

Joe Flaherty (Fianna Fail)
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If the task force knocked on the door in the morning and witnesses are at 60% capacity, can they show the task force their 40% capacity and the number of homes they can do and specifically what they want done?

Mr. Ronan Columb:

Yes, 100%.

Joe Flaherty (Fianna Fail)
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Would that be the best outcome of today's meeting? Specifically, if witnesses could show the 40% reach they can get to and show the task force what they need to do?

Mr. Ronan Columb:

I referred to the concept of heat maps in the opening statement. We believe the infrastructure task force, along with the utility companies and the local authorities should be identifying lands that are in the control of capable entities that can deliver mass housing, and the focus of infrastructure should be on those lands. Hopefully, when we do get an engagement with the infrastructure group that is the outcome.

Joe Flaherty (Fianna Fail)
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Is it reasonable to say all the house builders represented here are operating at 60% capacity? Yes.

Mr. Michael Prenty:

We are probably at 50%. We could double our output.

Joe Flaherty (Fianna Fail)
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They have the staff and can ramp it up?

Mr. Michael Prenty:

We have the staff and can ramp it up, and we have the land and the sites. We have one particular site where we have the capacity to deliver 5,000 homes on and it is trapped in the requirement for infrastructure. An investment of €40-odd million from the Government to unlock the infrastructure would open up that track of land. It ticks all the boxes. It is beside a train station. It is easy to deliver.

Joe Flaherty (Fianna Fail)
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I do not expect witnesses to comment on this, but I know John Paul Construction is on the task force. It is primarily a civil engineering company. It is a bit ironic there is no house builder represented on the task force. It seems a bit bizarre given the biggest challenge in the country at the minute is to build houses and the house builders are not represented on the task force. I have limited time.

Thomas Gould (Cork North-Central, Sinn Fein)
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Chair-----

Joe Flaherty (Fianna Fail)
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I am only 12 seconds over time.

Thomas Gould (Cork North-Central, Sinn Fein)
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I am only telling the Chair.

Joe Flaherty (Fianna Fail)
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Deputy Gould will go on for an hour.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Senator Flaherty has 30 seconds.

Joe Flaherty (Fianna Fail)
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We can succinctly say, the house builders here can deliver if they are given 50% or 40% capacity. They have the projects, they have the land, they have the people, they need to meet the infrastructure task force, give it their list of five or six points and we then need to sort that. Then we can ramp up house building. It is as simple as that, is it not?

Pat Casey (Fianna Fail)
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That is the housing problem solved. Good man, Senator Flaherty.

Joe Flaherty (Fianna Fail)
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I told Deputy Gould we would sort it.

Thomas Gould (Cork North-Central, Sinn Fein)
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It is great to hear all the solutions, because the Senator and his party have been in government for over a decade, and he has come up with the solutions today.

Joe Flaherty (Fianna Fail)
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The Deputy should relax.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Your time has started, Deputy Gould.

Thomas Gould (Cork North-Central, Sinn Fein)
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It is like the proverb "if the mountain will not come to Mohammed, then Mohammed must come to the mountain." I tell you now lads, it is like Groundhog Day. Have people got mass amnesia in here? We have a savage housing crisis. There are over 5,000 children in emergency accommodation and there are 16,000 adults and people are now saying they have the solutions.

For the Housing Alliance, what percentage of cost-rental homes have been delivered outside of Dublin? How many of these were brought through the cost-rental in situ programme?

Mr. Brian O'Gorman:

I do not have that information, but I can certainly get it for the Deputy. In terms of our programme going forward, we estimate that about 40% of our delivery going forward will be cost rental. We need to do more cost-rental. We accept that. It has already been referred to by a number of speakers. It is the huge need that is there. Low-income working households need to get into cost-rental accommodation. Not only low-income working households but there is a whole demographic of loads of people who are 40 years of age and older who cannot get mortgages. Even if the accommodation is there for them, they have good income but are not creditworthy in that sense. They need access to cost-rental homes. We need to prioritise that sector, and we really need to fund it.

Thomas Gould (Cork North-Central, Sinn Fein)
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Is it fair to say at this moment in time it is not prioritised?

Mr. Brian O'Gorman:

It is not prioritised in the way that it could be.

Thomas Gould (Cork North-Central, Sinn Fein)
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CIF's opening statement mentioned that the infrastructure deficits are impacting on the ability to deliver on brownfield sites. Can CIF representatives talk more on this and what the barriers are on delivering on brownfield sites?

Mr. Conor O'Connell:

There is a great example of infrastructure unlocking sites and delivering homes in the Deputy's constituency, which is the Ballyvolane area. There was an access road required and, I think, an extension of a wastewater pipe. That is a great example of how infrastructure can deliver more homes once it is invested in.

Thomas Gould (Cork North-Central, Sinn Fein)
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There was a situation where CIF owned a set of terraced cottages along the Grand Canal that collapsed earlier this year. At the time, it was reported there was €140,000 owed on derelict sites levies. Have these been paid since? How many other properties are owned by CIF which are on the derelict sites register? Are there other levies outstanding? The other developers might also answer that.

Mr. Conor O'Connell:

We have had a change of director general recently and a new chief executive officer. We are looking to move offices. Unfortunately, we got caught up in planning delays. It took so long to get through the High Court. As far as I am aware, those levies have been paid and I can check that for the Deputy.

Thomas Gould (Cork North-Central, Sinn Fein)
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I know there are outstanding sites.

Mr. Conor O'Connell:

We have three properties. One is in Dublin, there are offices in Cork and offices in Galway. As far as I know, none of them are on the derelict sites register.

Thomas Gould (Cork North-Central, Sinn Fein)
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Do any of the developers have properties on the derelict sites register and are there any outstanding levies?

Mr. David Caffrey:

From a Glenveagh perspective, we have no sites on the derelict sites register, no.

Thomas Gould (Cork North-Central, Sinn Fein)
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There is a site in Cork called the Good Shepherd Convent. That site has been flipped several times by developers and speculators in the last 25 years. It is unbelievable. At what stage do we call a halt to speculators flipping properties? That was owned by UCC. It was flipped then to a developer. That developer then went into NAMA. That was sold on after NAMA. Then it was sold again. That person came in and got planning permission and then flipped it again. We have a situation where there are huge issues with the site because it was a former industrial school. From what we gathered, there are probably the remains of people buried at that site. There is a huge piece of work that has to go on there. That site has been flipped. Just to add to it, witnesses will know Cork itself. They have seen North Main Street. Cork City Council has come in and made a compulsory purchase order, CPO, on North Main Street. Some people are sitting on sites. If we walk down the road from where we are here, there are derelict sites all over the place. People are sitting on them. Developers are sitting on them. Not all of them, but some of them.

Mr. Conor O'Connell:

There is a myriad of answers to that in relation to derelicts sites, particularly in city centres. I will come back to that one. In relation to that site on the north side of Cork city, it is on slope, there is a main trunk water pipe that goes through it. It is possibly one of the most difficult sites in Ireland to develop. I do not know how many times the building has been set fire to at this stage. It is probably ready to fall down, yet there is a conservation order on it. It is an unbelievably tricky site to develop. That is just one answer. I do not know why. The Deputy mentioned at one stage UCC had it. It could not develop it. He mentioned a developer that went bust. It has had a sequence of issues with its development. Regarding city centres, an awful lot of the properties, as I understand it, are not with the development community. That is mainly, in many instances, smaller landowners where the title is at issue, where there exist other issues that people have passed and there are wills. There are all sorts of issues regarding title in city centre sites. It can be difficult. It should not be happening, and the Deputy makes a fair point around CPOs and the councils.

I know many councils are frustrated with the CPO process when they try to use it and maybe there is room for clearing that up as well for the smaller city centres.

Thomas Gould (Cork North-Central, Sinn Fein)
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Reverting to brownfield sites, these are in every major city and urban area. Mr. O'Connell's organisation has spoken about it. Some of the developers might ask what they can do to free up these sites and get them turned into housing units. Walking around Dublin, you get depressed when you look at the amount of dereliction. I am talking about major sites, where dozens if not hundreds of properties could go in.

Mr. Michael Stanley:

We just started development on the old CMP Dairies site in Cork city. We are proud to have started that and it is going to deliver largely affordable homes. There will be over 600 apartments, which are going to be for 100% social and affordable delivery. I know Mr. Garvey has equally affordable delivery projects in Cork. Cork, Galway and other major cities absolutely have to catch up in terms of development and we will certainly make every effort.

To answer the earlier question about the level of cost rental, I think it is fair to say it is improving massively. If we look at cost-rental delivery, total affordable delivery, between the AHBs and the LDA in the last number of years, is getting up tp around 9,000 to 10,000 purely affordable units since 2022. The rate of output of affordable units is increasing from 1,000 units in 2020 to what could be 5,000 units today, and I am talking about purely affordable units. There is a HFA meeting tomorrow morning designed to approve substantial numbers of affordable projects on behalf of the alliance and other entities. The good news is the pipeline is increasing massively for affordable apartments. We could debate whether it is taking too long, but the good news is there is a much bigger pipeline of units, particularly CREL units, coming through the system, which we welcome.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I call on Deputy Joe Cooney.

Joe Cooney (Clare, Fine Gael)
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I thank all the witnesses for coming in. I start by acknowledging the capacity of the committee to effect change when it comes to unlocking barriers and to the delivery of housing. I have repeatedly highlighted in the Chamber and here the ability of private modular wastewater treatment systems to unlock the delivery of homes on small sites in the many unserviced towns and villages across our country. I was delighted to hear this morning that the Minister for housing has brought proposals to the Cabinet to do just that. It is a major boost for rural areas and clearly shows that when practical solutions are proposed, which is important, even from backbenchers, and pressure is applied to the Government, it can deliver systems like this. It is a very welcome move. I would just like a comment on it.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Who is the Deputy's question for?

Joe Cooney (Clare, Fine Gael)
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It is for Mr. O'Connell.

Mr. Conor O'Connell:

Absolutely, it is a solution for those 300 smaller urban areas, as we understand it, where development would be hampered only for the fact that, following this morning's announcement, there is the ability for a modular unit to be craned in on site to provide the capacity within that particular urban centre. It is very welcome.

Joe Cooney (Clare, Fine Gael)
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It is very welcome news. I hope this committee will have similar success on the issue of judicial reviews. Last year, a High Court judge dismissed a judicial review of the development of the Banner Plaza in my home county by Mr. Pat McDonagh. He took that decision on face value and it had nearly finished construction at a cost of nearly €20 million. Recently, an external third party, with no history of involvement in the development, lodged an application for a new judicial review.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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We cannot talk about any specific case where there are live proceedings or anything like that. I ask the Deputy to desist from doing that.

Joe Cooney (Clare, Fine Gael)
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Okay, it was an issue in my county. What I am asking on this issue is whether the witnesses think that type of legal action to be taken by a third party, which has no involvement in the development I am talking about and has taken a legal action against a development that has successfully gone through the full planning process, undermines trust in the planning system among developers and potential investors? Will it be a factor in decisions on future housing projects that might be considered? I think it is a big concern.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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If the witnesses are going to answer this question, I ask them to answer it in general and not specifically.

Mr. Conor O'Connell:

We have made our position quite clear publicly over the last number of weeks that we are very concerned about the extent of judicial reviews in this country. In recent times, we feel the use of judicial reviews for matters other than planning matters is a significant departure from recent judicial reviews against planning decisions. We now have judicial reviews being used against the water connections and against a decision of the Government in relation to apartment design standards. That would be a significant concern for the construction sector.

Joe Cooney (Clare, Fine Gael)
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Yes, that is my belief as well. Again, we would be hoping it would not turn off investors going forward. This is what we would be hoping for. Going back to zoning and the new modular wastewater treatment systems, hopefully costs will not become an issue there.

Returning to land, I have a question that I think might be best answered by Mr. Garvey, given he mentioned zoned service lands are now almost non-existent. All the lands in areas where there were no wastewater treatment plants in our last county development plans were dezoned. Is this going to be a major issue and will it hold up housing in future again? Reviews of the county development plans are ongoing, but again I presume all this land now has to be rezoned. Is this going to again hold back development?

Mr. Stephen Garvey:

I think it will be a positive, obviously. Under the national planning framework, up to about 120,000 units were dezoned, phase 2 lands or strategic lands. It is likely a lot of that land will come back into the system, and hopefully quite quickly. We will have to wait and see. I suppose it depends on how some local authorities are calculating. The real positive that could come down the track here is that under the planning Act 2024 a lot of local authorities moved to a ten-year lifecycle. If we all align with a ten-year lifecycle, a lot of that land could be brought into the system much more quickly.

Mr. David Caffrey:

I might just come in on a couple of points. I think the lack of zoned land and how it is manifesting itself is becoming more and more important. To give some context, it is really manifesting itself in the lack of planning applications we are seeing now. Permission has been granted for only 15,500 units up to the second quarter of this year. That is a 12.5% decrease on 2024. Commencement data is probably even more worrying. Just over 10,000 units have been commenced in the year to date. A significant reason behind that is the lack of zoned land.

I will go back to the judicial review point briefly. I think this needs to be looked at through the lens of how participatory our planning process is in the first place. We run through a plan-making process that is lauded as a highly participatory one where we have engagement at issues paper stage, at draft plan stage and again at the material alteration stage. We then come into the planning application stage, where we have third-party rights well founded to object to planning applications. They can then appeal that outcome. That is five stages of public participation before we ever go near a judicial review. Even the Housing Commission in its report spoke about how unique Ireland's planning process is in terms of how participatory it is. This is perhaps the way we should look at the judicial review aspect, through the lens of how participatory the planning process is in the first instance. I think that was an important point to make on this issue.

Mr. Michael Stanley:

If I were to echo Mr. Caffrey's comment, I would say what we are all in agreement on here is that the planning system acts as a funnel. If the committee were to talk to representatives of the house building industry from any country in Europe, they would have a problem with their planning system. Ireland is not unique, by the way. As Mr. Caffrey outlined, we probably just have a more difficult system. I think the message we are trying to put out today is that if the funnel is the problem, then we have to increase what goes into the funnel. The restriction of land and the very high attrition rate that happens as we put planning applications through the system means we need to apply for more and, therefore, we need more zoned land. The restriction on zoned land is causing a problem with that pipeline. I think we would probably all agree with that.

Joe Cooney (Clare, Fine Gael)
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Okay. I have just one question for Mr. O'Gorman. He mentioned loan funding a number of times in his presentation. Is this holding back housing development?

Mr. Brian O'Gorman:

I think it is holding back the amount of development that could be done.

What we are saying is that we get all our money as debt and we have to provide for that debt, so it costs us more to manage and maintain that property into the future. We want to get across the point that we are not looking for more money. We are looking for money given in a different way. We are looking for money as equity, not as debt that we have to pay back and provide for in higher rents and higher costs.

Pat Casey (Fianna Fail)
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I will start on zoning, which has been a hobbyhorse of mine since, and its complexity. Let us take Wicklow as an example. Let us hope that section 28 is going through the process. I know that conversations are going on in the background, so I would not give up on it yet, but only three weeks ago, we adopted the Greystones plan in Wicklow, where we only zoned 3.2 ha of land to build new residential structures on, and land that we could build on a month ago, we now cannot build on because it has been dezoned down to R2 land. This is the largest, fastest-growing population in Wicklow. On the other extreme, Arklow has just gone on public display for observation. Some 50% of the land is being dezoned after we invested €149 million in a wastewater treatment plant to give additional capacity for an additional population of 22,500, and the national planning framework says it can only grow by 80 houses a year.

This is a problem everywhere. I have always said that zoning is a major issue. We have to work with the Minister and get the key counties around the table to try to take this opportunity. We have an opportunity under section 28 to do the zoning of land that is required to build the houses that we need. I have a quick question for later as to whether the Minister went far enough with the additional headroom he provided and the additional 50% that he has given to do that. On the section 28 matter, it was not quite clear whether the officials have the power to only go to within the lifetime of the plan, which in Wicklow's case was 2028, the horizon in the plan of 2031, or the Minister's figure for 2034 and 2040 that they should carry out the review on. Senator McCarthy spoke about councillors. They are presented with a core strategy and land zoning. The work that they have to do after that to zone land is complex and fraught with much danger in relation to how it is perceived.

I want to move on to the infrastructure bit because it is critical, and the whole judicial review, JR, part. Mr. Conor O'Connell mentioned that the greater Dublin drainage scheme started at the very same time as the Arklow wastewater treatment plant. Arklow is finished and up and running, and the greater Dublin drainage scheme is still stuck in the planning process. Having looked at legislation called the Prisons Act 2007, the Minister has the powers to present a scheme for a prison for public consultation. He does appropriate assessment, environmental impact and all of that, looks at the reviews, and then makes his decision about whether to proceed with that planning or not. The only way that can be stopped is through judicial reviews. The problem we still have is the JR process. In fairness, I think the Minister, Deputy O'Callaghan, is looking at the JR process and its common good aspect, which must supersede everybody's other needs, but infrastructure like water, sewerage, power, the grid and so on are now critical infrastructure that must be delivered. We have to take the bold decisions that are available to us to do it.

I might spend some time on the proposed urban development zones. Have any of the developers here started that process with the local authorities? It is a model that may overcome some obstacles. They work together. We are looking at large sites for delivery of housing. It goes through almost a variation of the county development plan, but once it is done, it is done, and the developers are finished, as long as they comply with what was agreed. Have any of the witnesses started working with local authorities on that?

Mr. Michael Prenty:

We have started the process. We are slightly concerned that it will take too long. It could take a year and a half to get through the whole process.

Pat Casey (Fianna Fail)
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It could take five years to get planning permission.

Mr. Michael Prenty:

I know. One of the things that we are arguing for is that alongside that, we could be running a planning process for a section of it as we go. That is new for us. We have just started the process, so hopefully it works out.

Pat Casey (Fianna Fail)
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Does anybody have any comment on the urban development zones?

Mr. James Benson:

To home in on the positivity and potential opportunity that comes with the UDZs, any policy would probably take 12 to 24 months before we start to see the full impact, but if you look to demonstration of opportunity and the likes of Seven Mills and Clonburris, as mentioned earlier, you start to get a flavour of what can happen when private industry and public bodies work together collectively, with the support of the approved housing bodies, the Land Development Agency and others. Within Seven Mills, from our own submission, the Senator can see clearly, in the space of less than three years, how people live in what is a truly mixed-entity, mixed-tenure community, and some of those will spend their third Christmas in that location in the space of just three years. That is a perfectly situated new town and new community in a transport-oriented development, making the best use of sustainable infrastructure in its current place. That shows the opportunity that we can have through urban development zones in future.

Pat Casey (Fianna Fail)
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Does anybody else have a comment on UDZs?

Mr. David Caffrey:

The concept is effectively the replacement for the strategic development zones. There were varying levels of success with SDZs, as Mr. Prenty touched on, particularly around time. As with all of these things, a collaborative effort will be required here between the development community and county councils in identifying these. I would point straightaway to our rail network across the country. The opportunities to build off our transport-oriented development schemes are massive. That is where UDZs could come to the fore.

Pat Casey (Fianna Fail)
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I will leave it at that for this round.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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We might not get to the second round.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I thank everybody for their contributions. I will pick up on and add to some of the debate, because many of the problems are being identified but sometimes the solutions may be misunderstood. To pick up on Senator Casey's discussion about the local planning framework in Wicklow, I have no skin in that game and no opinion on whether the plan is good or not, but the interesting thing is that the local authority and elected members there have an obligation to be consistent with the development plan, which was agreed in 2022. There has been no dezoning of land between that development plan and the local planning framework. That is not me saying that the zoning that is in the planning framework is correct or not. There has been no dezoning.

One of the challenges is that Wicklow does not have a zoning map, unlike South Dublin, which has a full zoning map when it does its plan. Wicklow County Council and its elected members, as far as I can see, were left in an invidious position where they had to produce a local planning framework that complied with the development plan, and yet, at the same time, the Government was belatedly updating the outdated national planning framework, and I agree with all of the criticisms of that. For me, what that shows is not a weakness of the elected members or the executive but that the process which the Government had put in place for a local authority to make a decision was completely back-to-front, because when a local authority comes to do the development plan review, it has to reconsider all of the issues we are discussing here, to be compliant with the new national planning framework.

This is not a comment about anybody who is in the room today, but some of the public commentary by some Government Ministers, effectively blaming a local authority and its elected members for a plan, where that plan has to be compliant with the development plan, is not honest in terms of understanding the problems. Our difficulty with the zoning is that local authorities were told on 29 July what their new targets and headroom are. I think the headroom is probably about right. The question now is how quickly they can turn around those material alterations, but those plans all expire in 2028 anyway. I am with Mr. Garvey, in that I think the ten-year plans will make a big difference. I think some of the public debate on this is not factually accurate about where the blame is.

The system for taking decisions on zoning and local planning frameworks is completely disjointed. The big problem with the planning system is that we do not have enough staff. There was a suggestion from some people recently that we should have 20 SDZs or UDZs. I am a big fan of SDZs. I would like to make them simpler, more nimble and more flexible. In that context, we need another 400-plus planners at local authority level. We need a significant increase in the planning staff of An Coimisiún Pleanála. Unless we get that, it does not matter what legislative changes we make. Some of the bigger projects might get a bit of prioritisation but the small and medium-sized projects will be left behind because LRDs are not being done and there are no statutory timelines. An appeal to the board may sit there for a year.

I would like to see fewer JRs. I would also like the Government to properly resource the planning court. If people are going to take JRs, they should not take two years. No matter what is done with the legislation, we should have good-practice guidelines from the court on a statutory footing. We should have at least six judges on the planning panel, and everybody should know how long a JR is going to last.

The then Minister, Deputy Darragh O'Brien, came before the select committee last year. We spent a hundred hours in this room dealing with the Planning and Development Bill 2024. He told us that the latter was going to fix matters relating to judicial review. Now we are told there is going to be more legislation. The real issue is to actually put the resources into forward planning, master planning, the commission and the courts. A lot of that stuff will actually fix itself. Prior to SHD and Eoghan Murphy's and Simon Coveney's disastrous SPPRs and building heights and design standards, JRs in respect of residential developments were virtually unheard of. Mr. Garvey is right that the challenge is actually not in respect of large-scale residential developments but rather on strategic infrastructure developments. However, they do not go through the five stages of consultative planning because that is more like an SHD process. This has to be addressed.

On infrastructure, I am genuinely delighted. I keep my contributions at this committee as collegiate as possible. However, when we did the Planning and Development Bill 2024, the utility companies formed a caucus and lobbied the committee and the Minister and his officials like crazy to include two very straightforward changes regarding critical infrastructure. One was that critical infrastructure planning applications should be prioritised and go to the front of the queue. The second was that there should be parallel planning and licensing consents. We proposed those as amendments to the Planning and Development Bill 2024, but the Government would not accept them. Here we are again now having a conversation about critical infrastructure deficits, about which I share the concerns. I am saying some of this because we have a lot of new members on the committee. Deputy McAuliffe was here with us in the previous committee and Senator Casey was a member of the committee before that. Many of the issues we are discussing have already been discussed over and over again. Very sensible and credible solutions have been proposed. While there has been a bit of progress, it has been very frustrating. I just want that reflected in the conversation.

To go back to the SME sector, we can get more zoned land and we can increase the amount of HBFI funding or maybe some bank lending at lower interest rates. Our SME sector is more traditional in terms of its building technologies and output. If those types of changes being asked for were made, how long would it take to scale up and double the output in order to fill the 40% gap? There is broad consensus around some of the key levers of accelerating supply among companies in the SME sector if they were done. I am not hearing about them being done at present. What kind of timeline would be needed in this regard?

For Glenveagh and Cairn, let us talk about the positives. SDZs have been positive, but they take a long time. I was on South Dublin County Council when we started Clonburris in 2014. Construction started in 2021. Once the URDF funding went in, it accelerated rapidly. What do we need to see in the roll-out of UDZs to take the benefits of the SDZs and compress them in order that there is not such a long lead-in time? If we could find a way of doing them in a more time-efficient and nimble way, we could have real benefits, not just in the big strategic sites but we could also use the UDZs at smaller regional sites as well.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Mr. O'Connell can go first. I am conscious that we have a minute to get answers.

Mr. Conor O'Connell:

Regarding the SME sector, it is all about decision-making timeframes. For the solutions at the moment, a lot of the policy matters have largely been agreed and, in the main, have been or are about to be implemented. What we need now are quicker decision-making timeframes for matters in relation to connection agreements, EPA licensing and certification and simply for the provision of infrastructure to get the lands to deliver the housing we urgently require. There are even issues whereby a developer has to go to the local authority to get approval for the naming of an estate before the ESB can proceed with a connection agreement. In some local authority areas, this can take a lot longer than it should. Quicker decision-making timeframes right across the spectrum of housing delivery are needed. The Deputy is correct when he says that we have to focus on the solutions and the solutions are in those regulatory matters as well.

Mr. James Benson:

I will let the planner in the room answer on proper planning and let those who are good at what they do, do it. For the record, I am not part of the planning elite.

The Deputy inadvertently raised a very important point that we had not touched on yet today. We have spoken about the capacity of the sector to deliver. There is no doubt that we have a very complex regulatory legislative environment. The guidelines are challenging at times. The committee has done great work on that by means of pre-legislative scrutiny and other debates. This debate today is wholly welcome. What people do not always appreciate is the level of complexity in the ecosystem in which a number of stakeholders are operating in the context of delivering homes. There are 31 local authorities with 31 different preferences and policies. There are also Housing Agency, the Housing Finance Agency, the Housing Alliance and the LDA. There are many very positive contributors to housing delivery, but there is a need for an alignment in that regard. Everyone in the room is kept awake at night wondering where the solutions lie. We have come before the committee to discuss this matter over many years, but I take a lot of confidence from the level of access and the open-minded attitude of many of those individuals across many of those bodies. There is a willingness to learn and to take from the private sector the expertise that exists and what has been learnt from various ways of working. I take a lot of heart from the fact that there is a greater level of collaboration and alignment between private and public. This gives us an opportunity to improve on delivery. With that open mindset, where local authorities are constrained with resources and capacity issues, we should use the private sector, master planning, what has been learnt and the appetite and the energy and the commercials that are available often from the private sector, to support them in what they need to do.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I ask Mr. Caffrey to keep it short.

Mr. David Caffrey:

I will keep it very short. In respect of the UDZs, the first thing that needs to be done is to identify them, as was correctly stated, at scale, because that process can often take up to six months. Let us start identifying them now. The second big thing, obviously, is partnering with the infrastructure providers. No matter how we try to kick-start the UDZ process, it is going to take time to come to realisation and fruition. A large part of the reason behind that will be the infrastructure and so partnering with those infrastructure providers upfront is important. The final point echoes what Mr. Benson said about the collaborative approach between local authorities, the development community and the communities within which we would look to ultimately provide these UDZs. That is where I feel SDZs maybe fell away a bit. It took a while to bed in the community engagement piece. If we can start identifying sites and commence the engagement really early, we can kick-start that programme a bit, but I caution that it will take time.

Mr. David Kennedy:

There was a question on how the private sector and, in particular, some smaller and mid-sized builders can be more productive and use up the capacity. It was stated earlier that many of the operators in the sector are probably operating at about 50% of capacity. If we can deal with the zoning issue, a secondary point comes to the fore. In the main, a lot of the expertise among smaller developers is in the area of houses more so than in more complex apartment development. On the density guidelines, reference was made to the fact that density is not set by developers but, rather, by local councils in development plans, etc. There is a concept that we often refer to as less being more. For example, in the event of a development being earmarked for, say, 50 units to the hectare rather than 70, the likelihood is that more units will be delivered because there will be more houses.

Small and medium-size developers, in particular, will be in a position to increase their capacity on foot of that, as against a scenario across the country whereby a high proportion of units are required to be apartments, which suffer from viability challenges.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Thanks very much. We have gone way over time. We are having an excellent discussion so we will go beyond 5.30 p.m., if that is okay. There are many witnesses here and a number of other members wish to speak so we will continue in that vein. I call Senator Murphy.

PJ Murphy (Fine Gael)
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I thank all the witnesses for coming in. I have found it an extremely informative meeting.

I have two questions. I will direct both to the Irish Home Builders Association. The first is on zoning. The culture of constraint within zoning and within the creation of county development plans and local development plans was mentioned earlier. Prior to being elected to the Seanad, I served a number of years on Galway County Council, where I was involved in county development plans and a number of local area plans in towns such as Loughrea, Gort and Kinvara. In all cases, councillors would have loved to have zoned a lot more land as residential but were prevented by core strategy and imposed NPF caps on residentially zoned areas. If, as is suggested, we are going to take some of the shackles off county councillors and local authorities by increasing the amount of land zoned as residential in reviews of local area and town plans over the next year or year and a half, should we also look at lifting a further shackle on local representatives considering zonings, namely, the zoned land tax? When I was a county councillor, our first consideration when doing town plans had to be the owner of the land. Did they have an intention to develop it? If not, were we by zoning their land nearly imposing a tax on these landowners or farmers who intended to continue farming their land? Do the witnesses see a continued role for the zoned land tax or has it served its purpose? Is it something we should consider parting with? I am asking for an opinion; I do not know.

Mr. Conor O'Connell:

The core strategy obviously comes from the national planning framework. By taking the shackles off, you zone more land and need more infrastructure. That was all based on outdated population growth targets. The RZLT, then, is kicking in. I will give a very good example of what is happening in certain local authorities at the moment. A number of local authorities have put out an expression of interest for landowners to come forward - this follows on from the section 28 guidelines - to illustrate the deliverability of that land for housing if they were to vary their development plan. It is an open consultation. Some local authorities have engaged in that process. That is an excellent process because it says that these lands, if we rezone them, will be delivered for housing purposes. The whole purpose of zoning land for residential development is that it will deliver ultimately. That is a very good example of what is happening and it should be replicated nationwide, in our opinion. That way, the arguments about imposing the RZLT on landowners may diminish somewhat. There are significant issues with the RZLT.

PJ Murphy (Fine Gael)
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I absolutely take that on board. Maybe we need a best practice standard for local authorities. I accept that what Mr. O'Connell has said is a solution for the fear I had about zoned land tax constraining county and city councillors.

There were welcome proposals to the Cabinet today from the Minister on developer-led package treatment plants. As Fine Gael spokesperson for housing in the Seanad and previously a county councillor, this is something I have long advocated for. In my local electoral area in south Galway - the Gort-Kinvara local electoral area - we have 14 settlements, of which only two are serviced with wastewater treatment facilities. Twelve of our villages are unserviced and have been closed to development since about 2011. No housing projects have been built in those 12 settlements since then due to the lack of wastewater infrastructure. I sincerely hope this morning's proposal to the Cabinet will bring life back into many dying villages in rural areas such as the one I represent.

However, I have some small concerns about feasibility. While I have no doubt that developer-led package treatment plants will be viable for the vast majority of the 545 unserviced settlements in the country, EPA standards must be met. I am concerned for some villages, towns and settlements that are in slightly different geological areas, maybe in peatland or karst limestone areas where there will be issues with percolation. That is either percolation too fast into groundwater or peaty areas where there is no percolation at all and potentially no overground drainage system, such as a river, stream or access to the sea. In those cases, the outflow from the package treatment plants will have to be to a much higher standard to meet EPA guidelines. I have a concern about viability in those settlements.

As a representative body of many small and medium-sized builders who would inevitably be developing these village and small town developments, does the Irish Home Builders Association see a role for a cost-levelling system or State intervention to cover the cost beyond a certain cap per unit for delivery of onsite, developer-led package treatment plants? That would ensure no settlement is left behind due to viability through no fault of their own but because of the geological ground they are sitting on.

Mr. Conor O'Connell:

We have to see the detail of the proposals this morning. They are very welcome because they provide a solution for a large number of rural and small urban settlements. If we are to deliver 50,000 or 60,000 units per annum, we will need them to be delivered right across Ireland. The Senator is right. We have to see the detail but it seems it could be a very practical solution.

On cost levelling and subsidisation, in Uisce Éireann's capital framework plan, as I understand it, there will be €300 million for rural and regional settlement areas. Maybe that €300 million could be assigned to making facilities more viable in those areas where otherwise development could not take place. Again, we would have to see the detail.

Paul McAuliffe (Dublin North-West, Fianna Fail)
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I thank the witnesses for being here today. It is great to hear their perspective in the room. We probably should have had them much earlier in the term. It is certainly appreciated.

It is interesting to hear different people's perspective on what the problem is relative to their own geography. It might be zoning and so on. My area is the north west of the city and the biggest challenge we have is the cost of construction. For public projects, the cost per unit is coming up as a very significant figure. If they are affordable purchase, we are effectively giving a huge subsidy of €100,000 or €150,000 per unit to make them viable. The alternative is private development but traditional built-for-private-purchase, owner-occupied sites simply do not exist in my constituency. I cannot think of any private owner-occupied purchase site being built at the moment in my constituency; in fact, I cannot think of any for the past five years. All those that are being built are public projects or - not in my constituency but an adjoining one - there was an apartment development that was ultimately purchased by an investment fund.

When it comes to the tradition of a buying a small home, people would be willing to look at apartments if that was possible, but they are just not being built. The cost of construction is a significant issue in terms of both the public and private processes. Is there anything we can do about the overall costs of construction? That may involve changing standards. Mr. Kennedy's point with regard to density is key. We would be delivering more houses in the outer suburbs of Dublin if there was not such a large insistence on apartments in those areas.

Second, local authorities across the city are different. I hope the witnesses will not be diplomatic. What is costing their companies more money when it comes to different local authorities? Are the different approaches being taken by local authorities also driving up costs? Perhaps the witnesses should answer the less diplomatic question first. Will Mr. Kennedy expand on his earlier point about density? Mr. O'Connell might then come in on that issue.

Mr. David Kennedy:

I am not sure if it is in the Deputy's constituency but we have a site in the north west of Dublin, for example, that has been zoned for some time. However, we cannot progress to development because of the lack of an LAP. That site will accommodate a significant number of both apartments and houses, all of which will definitively be at an affordable level. The nature of the site is such that it will accommodate houses and apartments that will be for affordable, private sale. We are looking at potentially getting on that site in 2028, but there is no reason it could not be enabled-----

Paul McAuliffe (Dublin North-West, Fianna Fail)
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How can we reduce the cost of construction on that site for Mr. Kennedy's firm so that ultimately the cost is lower for both public and private? What can we do to reduce the cost of construction in terms of standards and so on?

Mr. Ronan Columb:

For lots of very valid and laudable reasons, we have changed our standards over the years. We have continuously increased them, which means we are in a heavily regulated and consequently a very high-cost industry. We are no longer able to deliver smaller, more compact houses. I probably should not have used that phrase because we have new compact housing guidelines, but we are no longer allowed to build smaller homes. A lot of the regulations were introduced, quite rightly in lots of instances, to enhance the safety, comfort and usability of homes. However, they have ultimately pushed them beyond the capability of people to buy. It has been referred to as the Mercedes legislation; essentially, nobody can buy a car unless it is a Mercedes, and so it goes with houses and apartments. That is the first challenge.

If we can moderate the continuous advancement on those standards and regulations and allow the industry of inflation and economics to catch up, it would help, for a start. If we could repeal some of the changes that have been made, it would help to reduce costs. The work that the Government has done recently on apartment guidelines is helpful in that regard. The input costs for bricks, mortar and labour are somewhat fixed. Our business, like Glenveagh and Cairn Homes, relies a lot on modern methods of construction. We build a lot of products in factories around the countryside and deliver and assemble them on site. It is a much more efficient way of delivering housing. The faster and more efficiently we can build, the more cost effective we can be. The quicker we can bring land from purchase through planning, production and onto completion, the more economical we can be. There is a huge financial cost in holding and bringing land through the process.

All of the small adjustments that have been talked about today, including increasing the pace of planning and the availability of infrastructure, as well as making moderate changes to the regulations, will have an impact on reducing the advancing costs of housing.

Mr. Stephen Garvey:

I am involved in a development in Deputy McAuliffe's constituency. It is going well, thankfully. The biggest single change the apartment regulatory guidelines made was that they offered people choice. They opened the opportunity for apartments that had not been built to be built. When the Minister changed the guidelines, he did not dictate that we could not build to the old standards. If a firm chose to build a bigger apartment, it could do so.

The single biggest thing that has changed in the Irish market over the past number of years is that we have actually removed choice. If it is not a Mercedes-Benz, we are not building it. That is where we have pushed the system to. We have removed all of these things to offer people choice. By withdrawing that choice, it has compounded the challenge of delivering the product.

I am really supportive of those guideline changes. For example, we were in discussions with approved housing bodies and were taking the cost of apartments down from €460,000 or €470,000 to below €400,000. Where we were offering €1,000 a month in cost-rental product, that has now vanished because of the judicial review.

We are probably the biggest operator in modern methods of construction. They allow us to deliver at scale. We have to remember that the Exchequer takes about 38% of our product that we build. VAT was reduced on apartments, but there are many taxes involved in housing. That is a bigger component than the actual construction costs. If we zone the right amount of land, that becomes a relevant component. We have the technology and techniques to ramp up dramatically, but we need to clear all of the other stuff out of the way.

Mr. James Benson:

My colleague will come in on some of the opportunity relating to efficiency that can be brought into the system. One of the big things we can do is let the sector respond. We have seen the situation where we have called for many supports and initiatives to be put in place. The Government, policymakers and others have responded in kind with the relatively recent introduction of new policies, which we need to see scaled. We do now have the first home scheme, croí cónaithe and certainty around the help-to-buy scheme. Over 3,000 units are under construction or have been recently released to the market through croí cónaithe. This enables the private purchase of apartments within the confines of people's incomes. People with annual incomes of €50,000 or €60,000 can now avail of private purchases. That is a welcome initiative. We have a first home scheme that is starting to move from its infancy and conception through to making real progress. Approximately 3,500 key workers have accessed private homes as a result of that measure having been put in place. There is movement and we probably do not appreciate it with the talk of zoning more land.

We also need to increase the conversion rate. We only see 20% of zoned lands converted. There is an element that the private sector needs to do to step up in relation to that, but we are making improvements. Mixed tenure comes with the density requirement. If we look across at what is being delivered in our sector today, we have cost rental, CAF, Part 5, local authority affordable purchase, croí ónaithe and first-time buyers. There are a number of supports in place. The challenge is ensuring the alignment is in place and that those supports are co-existing and working collaboratively.

Ms Madeleina Loughrey-Grant:

I will briefly build on that point. The policies are in place and are very helpful. They will become more helpful as they scale, but we have to remember the context. We are now in a situation where the current ratio of average house prices to average salaries is eight to one. Wage inflation since quarter 1 of 2021 is 15.6%. Against that, build cost inflation is 37%.

As a business, we are focused on our operating model. How do we go to work to ensure that the efficiencies that we can find through replications, scale, constantly building and repeating our preliminaries are passed on in terms of cost? We are really focused on having an operating model that, coupled with some really great policies, can create efficiencies that can help in a landscape where we have all been struggling with inflationary pressures.

William Aird (Laois, Fine Gael)
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I thank the Chair for the opportunity to speak during a housing committee meeting. I am not on the committee, but I served as a public representative on Laois County Council for over 40 years. Having spent all my life there, I can say that we handed over a mantle where we had the lowest housing list in the country and the greatest record of building houses.

I will finish with the self-praise. I am delighted to speak here today as a public representative, having never before been in the company of so many people who are involved directly in the house-building industry. However, I would like to ask a three-word question: what went wrong? When I started off in public life, the maximum amount of time you would wait for a house was 12 or 15 months, or maybe two years. Everybody - the garda, the nurse, the teacher, the people working in the health board or the people working in the courthouse in Portlaoise at the time - was able to afford a house. Anybody who went to the bank and got two refusals got a loan in Laois County Council. That was the way it worked and I was involved in the whole lot of it. At that time, Laois County Council was the only entity involved in building local authority houses. We would have had three or four builders supplying the houses we wanted for anybody who needed them. We also provided subsidised sites in Beladd in Portlaoise and perhaps one or two other towns as well, such as Mountrath and Abbeyleix. I did not represent those areas at the time.

Following on from that, I sat on the council on the first day that Respond said it would build houses in County Laois. It was the first such body to come in. It was refused in Mountrath. I said at the meeting that we would take them in Portlaoise and it kicked off from there. We still have a Respond estate and it is working 100%. A remark was made earlier - it prompted me to jump down three or four steps at a time when I saw this starting up - about county councillors, the zoning and what went wrong. I will tell the committee what went wrong because I was on the local authority when there was no need to have county development plans. The populations were small and the progress was slow, but that was all you needed at that particular time. Then everything started to ramp up and the population started to get bigger. People who were living outside of Ireland came back because opportunities were coming. There were jobs available in construction and everything else. It was not a flood, but it was coming back at a steady pace. That was when the concept of having county development plans was developed.

The first time I was involved in a county development plan, we were completely knee-deep in proposals on what we thought was right and wrong. We had an adequate supply of water and we had sewerage. We had everything like that at the time. There was no talk about electricity because there was loads of it. As time moved on, something happened to put the brakes on. The enthusiasm in local authorities was not there any more. We did not keep up. We did not see the number of people who were coming in. We were dealing with what we had but we did not project the figures to anticipate what happened. That was the problem. Sometimes I used to look at "The Late Debate" at home at night and I would nearly jump into the television because they would be talking about letting it back to the councils to build houses. Did they think there were hundreds of blocklayers, plasterers and carpenters sitting in the foyer of Laois County Council waiting to get work? That was nonsensical talk.

Moving on from there, now we are seeing the voluntary housing organisations dovetailing together with all the partnerships of social and private housing. We have just had a discussion about Dublin - I know nothing about Dublin. I do not want to know, to be straight. It is not my business. I am concerned about Laois. As I see it, a person taking on a development needs the support of the voluntary housing association in that development to make it pay. That is grand - it is not a problem - but now I see a slowing up on that end of it. I did not hear today's announcement but I would be absolutely delighted if anything happens which will encourage building. I am concerned with one thing; I will say it again at this public meeting that I disagreed with taking responsibility for water from the local authorities. It was one of the biggest mistakes I have ever seen. We are now giving €2 billion to Uisce Éireann. I want to see some of that €2 billion ring-fenced for Laois. Every other Deputy can do what they want. I want to know how much is being spent in all the different areas of my county to allow people who were born, bred and reared in an area to live in that area if that is what they want. Would it not make sense to have post offices, public houses, football teams, hurling teams, soccer teams, basketball teams and schools kept alive and well?

A wheelbarrow would not hold all the different documents that have come out in the past ten years. It is worse we are getting. I want to talk about zoning for two seconds. When we zoned land as county councillors, we felt we were in a better position to know what the progression was with people coming in. The housing people in Dublin - in the Custom House, I presume - were telling us what to do down in our area. A letter would come in from the Minister telling us to take back out the land we were after zoning. Somebody mentioned today that the greatest thing that is happening in the local authorities at present is that outside people are saying that they want their land zoned, or they want to sell their land, without the RZLT. I think there is a problem in this regard, however. I am asking why so few people are interested. To understand why, you need to go back and look at the history of what started this at the time. You need to forget about what happened afterwards and channel your views on what happened. When Charlie McCreevy reduced the rate from 35% to 20%, all of a sudden a whole lot of land became available. People did not know when it was going to go back to 35% so they said, "Jesus, I had better deal with this now; I had better go and do it". A small little thing like that set the whole ball rolling. It is regrettable that we are where we are today. To me, it is so simple to solve. What has gone wrong with the ESB? What has gone wrong with the water infrastructure? There was never as much money being provided, but we seem to be building at a slow pace. Regardless of whatever scheme is in place, everybody should be entitled to a home. Everyone should be able to purchase a home under one of the different schemes. What has gone wrong? There were three schemes when I started off in 1979 - that was all that was available - and we housed everybody. Now there are more than 100 schemes available. The bottom line is this, and it is an awful thing to say. With all the schemes that are in place, with everything that is going on, with all the witnesses' help here today and with everybody trying to row the one boat forward, what is happening? More people have not got a home and more people are homeless. It is very sad. That is all I can say. I can just give the committee the history; I hope the witnesses have the answers.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Mr. Kelleher is indicating that he might respond.

Mr. Michael Kelleher:

I am not so sure I have all the answers.

William Aird (Laois, Fine Gael)
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No, but you are doing the building.

Mr. Michael Kelleher:

There are a number of issues. The regulations have changed substantially over recent years. We have become very regulated, and very centrally regulated. Many powers, and even responsibility for policy, have been taken away from local authorities and given to central government. We are happy with plan-led development; that is no problem. We know where we are going - that is great - and we should be able to fund the infrastructure there. There has been a lack of investment in infrastructure in recent years. The most recent development plan, which was very restrictive, reduced the development cycle to six years and reduced the headroom to 25%. We were not looking ahead. We did not look at how we could plan out into the future. Infrastructural planning takes a long time before we have the pipes in the ground. We are not looking far enough ahead. The same thing is happening even in this current review.

Some local authorities are very good but the adoption of the regional spatial and economic strategies means that the development plans will nearly be pushed out to 2030 at this stage. We should be looking now at an interim measure. It should not be about the short term. We should be looking at a four- to five-year cycle because we are trying to bring in a ten-year cycle. Along with the infrastructure providers, the local authorities and the Government, we should be looking at how we can start the first phase of this, which involves bringing forward the infrastructure and more zoned land so that we are taking a step into the ten-year cycle. What is happening here is that we have become too constrictive with regard to zoning. What we were trying to do was, a bit like the car rolling off the assembly line, focus on on-time delivery. You cannot get on-time delivery when you have such a complex structure like planning and infrastructural development.

We now have plan-led development. We know how we want to develop the country. We should not be afraid to zone enough land because we know where we want development to take place. That gives time for everyone. The two-tier process means that we can see where development is going 15 or 20 years in advance.

That allows everyone to plan.

Conor Sheehan (Limerick City, Labour)
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I want to go back to the issue of water infrastructure. I assume the developer will have to fund this. The lack of clarity and detail is quite alarming. Will this then be passed on to putative buyers? Do developers actually have an appetite to fund this type of infrastructure?

On the conversation about apartments and densities, I am concerned. Are our housing densities making the housing crisis worse? I represent Limerick city. We do not have that level of demand for apartments. Is it realistic to expect apartment output to expand when we scale up to 50,000 or 60,000 a year?

I think Mr. O'Gorman mentioned cost rental earlier. There is a clear need to merge that with social rental. It is totally dysfunctional. It does not work. It is unaffordable. It pays lip service to the concept. If it was merged with social rental, would we then be able to deliver the thousands a year we need?

Mr. Stephen Garvey:

We are active on a number of developments at the moment where we are installing treatment plants. This is something we have been doing for probably two years at this stage. The way we look at a lot of those is the cost makes sure we actually get to deliver the houses. That is the single biggest thing. We are not looking to pass on the cost. We are simply accessing the infrastructure immediately so we can deliver homes.

Conor Sheehan (Limerick City, Labour)
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Does Glenveagh have the headway to do it?

Mr. Stephen Garvey:

Yes. We have a team that liaises with Uisce Éireann and the EPA. We apply for planning permission, we get the permission and then we get the EPA licence. It is challenging but it can be done. We are doing it on smaller schemes of about 200 units. For 40 and 50 units, it is probably achievable. The biggest thing is the discharge, access to rivers and things like that. That can be a challenge sometimes.

Density is a key point. At 50 units a hectare, we can predominantly achieve all own-door housing now with the new compact growth guidelines. One can see the benefits in that of delivering more affordable housing because own-door housing is a lot less expensive to deliver than apartments. When we get to 100 or 150 units a hectare, which is the next step, we are into apartments at that density level. There is nothing else you can deliver and you are at a medium density. You are at a storey level of around five to six. Once you reach five or six storeys, you go into different fire regulations. If you go above six, you might as well head all the way to 25 because the cost is so prohibitive. There is a kind of band that we can only operate in. The point I was making earlier is because choice has been reduced so much and under the new guidelines the Minister introduced, if you take 100 units per hectare, you can now limit the quantity of apartments down to 30% or 40% of the site and open up more own-door housing. The other concept we had in this country, except we removed it, would have benefited places like Limerick, namely, co-living, which can help achieve better densities. You can reduce the quantity of apartments you have to deliver. Apartments are prohibitive no matter what in terms of the cost to deliver them and the quantity of capital required for the development as well as the buyer who is there to buy them. We can make apartments with institutional investors that were working in Dublin three years ago. They were not working in Limerick, Galway or Cork.

Conor Sheehan (Limerick City, Labour)
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They will not work in Limerick.

Mr. Stephen Garvey:

That is the biggest challenge. They will work with the Land Development Agency and approved housing bodies but that means the State puts the shoulder to the wheel more.

Mr. Brian O'Gorman:

If the distinction between cost rental and social rental was whittled away, it would be a much better outcome for society generally in not stigmatising housing in any way. To facilitate that, there would have to be a comprehensive support or system behind it - if people need help to pay their rent, they receive that help. There have been discussions at this meeting about standards and reducing what we need to have but we have to be careful when developing apartments that we make them attractive. Just because they are social and affordable housing, they still have to be attractive in the long term. The schemes we develop are indistinguishable between cost rental, social rental, private rental and owner occupied. That is the way it should be. We should make housing available that does not distinguish across tenures.

On apartments, I will outline something that would be extremely helpful. We are looking at developing apartments but the multi-unit development legislation needs serious reform. Steps have begun to be taken to do that. The Multi-Unit Developments Act controls how owner management companies operate. That needs serious reform. There is no point in developing huge amounts of apartments if we do not have the legislation to make sure they are managed and operated in an efficient and professional way.

Ms Madeleina Loughrey-Grant:

It is a mindset shift but Ireland has the lowest proportion of apartment living in Europe. If one looks at the unit targets we are trying to hit, there is no question that increasing apartment output needs to be in the mix. There is also a bigger picture that we have not touched on much today, which is the sustainability challenge we all have as well as the carbon targets we as a State, but also as companies and industry, are pursuing to build homes that are more sustainable and carbon efficient. When one looks at apartments, apartment complexes and solutions, there are increased efficiencies one can find from a sustainability perspective. A mindset shift is definitely needed. We have done some research on this. If you research around the public and choices around living in an apartment close to transport nodes and work with good facilities versus rural accommodation or accommodation away from transport links, there is increasingly a shift with younger people and key workers to want to live in apartment accommodation that is really well serviced.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I will let Deputy McGrath in because he stuck to the time and we went way over it, in fairness. I will let him in before I say a couple of words.

Séamus McGrath (Cork South-Central, Fianna Fail)
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What struck me today was the discussion around capacity. In the statements, the witnesses said capacity was not an issue but what I heard today was there was 40% or 50% capacity that was underused. That is very significant. What does that mean? It is not necessarily labour force. What is the capacity that is not being used? I would appreciate if someone answered that.

Apartments are critical to getting high numbers. Mr. Garvey said if you went over six floors, you were into a whole different ballgame in terms of regulations. Why are more not built at six floors? We do not see that happening either. Is it because the sites cost too much and developers need to go higher or get a higher number of units? We do not see apartment building happening even at the six-floor level.

Mr. Stephen Garvey:

The majority of our apartments are five and six storeys, depending on local area plans. It is down to density levels. The Ford site in the Cork docklands is an excellent example. We are at probably 120 units per hectare and up at 14 or 15 storeys. We have seen the docklands in Dublin past the SDZ. In the SDZ in Dublin city, you could not go past a height cap of eight storeys, I think. Behind the SDZ, you could go up to 21 storeys. We have seen those developments happen. They have all happened with institutions. There is a big cost change once you go over six storeys. Once you go over 18 m, the fire regulations change dramatically. They are quite expensive.

Séamus McGrath (Cork South-Central, Fianna Fail)
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What capacity is not being used?

Mr. Michael Kelleher:

There are about 190,000 working in the industry. The shift is the number of Irish-based companies now working abroad in Europe. They are working there because the work is there and the continuity is there.

If there was a pipeline here and if people could see it. If one looks at the AIB HPI index it shows the output in civil, structural and all those are all down in Ireland. That is the problem. They have moved abroad to England and beyond to grow the business.

Séamus McGrath (Cork South-Central, Fianna Fail)
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In short, a lot of our capacity is working internationally.

Mr. Michael Kelleher:

Yes.

Mr. Conor O'Connell:

Think of it logically from a construction site perspective, we are all talking about scale. The Department of Finance issued a report last summer which talked about scale and the greater efficiencies and greater productivity that comes into the industry if we could reach a certain scale. Think about how many extra bricklayers or groundworkers you need from building 100 units on site to 200 units on site. The labour differential between doubling output is not as significant - it is not a simple case of doubling the labour input. A similar amount of labour can actually increase productivity and deliver far more. We just need to scale.

Mr. Ronan Columb:

We have observed the same thing. Much of our productive capacity is going abroad.

Séamus McGrath (Cork South-Central, Fianna Fail)
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International.

Mr. Ronan Columb:

There is precast concrete companies shipping concrete abroad. We know that some of our key supply chain businesses are exporting their talents. We have nearly 700 units, with Mr. O'Gorman’s organisation, which was a year in the process of trying to get approval. In the meantime the teams that would have delivered those are working in the UK.

Séamus McGrath (Cork South-Central, Fianna Fail)
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Okay. I thank the witnesses.

Thomas Gould (Cork North-Central, Sinn Fein)
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Can I make a proposal? What we have heard here now is unbelievable. We have production being shipped out to other European countries when we are in the middle of a housing crisis. This needs to go to the Minister and the Taoiseach that we have 40% or 50% capacity that is not being utilised by companies which want to build. I think we need to write to the Minister. We need to meet about this. What has been revealed here today now is that capacity is there to build houses and the question is -----

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Hang on a second. Deputy Gould, in fairness -----

Thomas Gould (Cork North-Central, Sinn Fein)
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I think the Minister has to be written to now about what has come out here today.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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We have gone way over time and have gone over time on everyone, to be honest. I think it was a fantastic meeting. It was very informative for all of us as members and that is why I felt we needed to extend it. I was going to propose we would pencil in this meeting with industry on a six-monthly basis because we need to hear what is happening on the ground and we need to know what changes. I will propose that we do this on at least a six-monthly basis with industry and keep a push on.

I will make a couple of points. I do not want to labour back over it. The positivity around the change in the guidelines with regard to apartments has rung through but then we turn around and somebody is objecting and stopping homes being built. It is not acceptable.

I think Mr. Benson mentioned that 20% of zoned land was developed. It is unacceptable that only that percentage of land is being developed on. There might be land that is in strategic reserve or level 2, there might be different names on it in different counties, which someone might be in a position to apply to develop but they will not get planning because it is strategic reserve. It could be serviced but there are fully-zoned lands not being developed. I think the figure mentioned was 20%. It is unacceptable.

Mr. James Benson:

It is 15% to 20% conversion but the reference the Chair is making is around the sequence in lands and the importance of the sequence in lands and not having tier 2 lands being leapfrogged, that is, LHA-designated lands. Yes, it is a huge issue.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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We have asked the Irish Home Builders Association and so on, whether the local authorities are ambitious enough. Have the witnesses felt any pushback on the proposals being put forward? Maybe they should not name anyone but the witnesses might let us know.

Mr. Conor O'Connell:

At the start we asked if some local authorities want more zoned land and more housing ultimately. I think that is a fair question to ask at the moment. Since section 28 guidelines came out in July, it is quite easy to determine which local authorities have initiated some kind of process and which local authorities have not. That is the Chair’s answer there.

Mr. Michael Kelleher:

A number of local authorities were directed to dezone land in the last development plan. Now the Minister has decided to push forward and has issued a section 28, it is incumbent on the OPR to work with local authorities to look at how we can expand the zoning of land because the opposite happened in the last development plan.

Mr. Conor O'Connell:

I know we spent an awful lot of time, and the topic today was unblocking things, but an awful lot of positive stuff has happened – we just need to implement it. As builders we want to build. We just need to implement the changes, implement the funding for infrastructure and just implement all the positive stuff that has to take place. It is key that we monitor that and it is great the Chair is inviting us back in a few months' time.

Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I thank Mr. O’Connell. We have gone way over time, as I said. Luckily there was not another committee meeting in here - we originally thought there was but there was not - and that gave us some flexibility.

I thank the witnesses for coming in at short notice. It has been a fantastic informative meeting for myself and all the members. I would like to see us working together in continuing to highlight these issues. The reality is developers and builders build houses. We do not. It is up to us to put the supports and infrastructure there that will allow that to happen. That is what we will have to do. We will have to work to make sure the funding models and the infrastructure, in particular, is put in place to make sure we actually hit the targets. It is good to hear some positivity and that some of the changes are making a difference but I will highlight again that it is unfortunate that then we have somebody who is prepared to bring something to a judicial review that might block the development of thousands or tens of thousands of apartments. Ms Loughrey-Grant made the point that we have the lowest level of apartment building within the EU. There is massive scope there for us to develop the apartments particularly.

I thank everyone again for coming in. My intention is that we will set a date at some stage in the new year. We will put the meeting on a biannual basis because we need to hear exactly what is happening on the ground. I thank everybody.

I propose the meeting continue in private session to discuss other matters. Is that agreed? Agreed.