Martin Daly (Roscommon-Galway, Fianna Fail)
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As we know, housing production is the number one priority for the Government as is reflected in the programme for Government. Ireland's housing need is real and we need to consider all methods of construction to deliver the targets we set out in the programme for Government. We have to increase housing supply, improve sustainability and boost construction productivity. A recent report by the National Economic and Social Council, NESC, published last autumn, which was welcomed by the Government and the industry, was the first critical review of modern methods of construction in the landscape in Ireland. It looked at a template for the forward planning for modern methods of construction, but today, I am specifically asking about modular housing. It is coming at a crucial time because it is clear that the traditional methods of construction will not meet the ambitious targets set out in the programme for Government so we need to involve all aspects and foster all areas of construction in Ireland, not just on-site, but off-site construction.

One of the strengths of the report is that it adopted the UK's definition framework seven categories of modern methods of construction, which will bring much needed clarity to what constitutes modern methods of construction in Ireland. One hundred off-site manufacturing companies operate in this country with 27 providing complete housing solutions. In my constituency, there is a company called Lidan Designs that has recruited 40 people into its manufacturing facility, including master carpenters, plumbers, electricians, architects and engineers. It has taken on 8 apprentices from the local school starting in September. It is a vibrant company with an investment in the region of €10 million, most of which came from its own resources and private equity with very little support from the State. It has built schools for the Department of Education, including St. Flannan's and a school in Birr and it is constructing a national school in Kildare. Its problems are crystalised in what was identified in this report.

As modular housing is a disruption of the traditional methods of construction, it will require a different approach. Institutional leadership - that is us; standards in innovation - that is us; and the building industry are mentioned. Ambitious targets were also mentioned - that is us. Innovative finance must be us because a different financial model is required for modular housing. Much of the finance has to be front-loaded. Supply lines cannot be set up without predictability and consistency. Multi-annual planning is needed. I am talking about the Department of Education in this respect, but also the housing sector. We need to review our relationship with modular construction so we can bring on smaller Irish indigenous companies, especially in this climate, that offer high quality jobs in provincial towns throughout Ireland. I spoke last night at the parliamentary party meeting and another Fianna Fáil TD from another part of the country identified the exact same issues around modular housing and its ability to get a foothold in the provision of housing.

Colm Brophy (Dublin South West, Fine Gael)
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I thank the Deputy for raising this issue and providing the opportunity to update the House on this important matter.

Modern methods of construction are a key measure to support the delivery of housing under Housing for All and the programme for Government and have the potential to boost productivity, increase efficiency and improve sustainability in the construction sector. Modern methods of construction is the term used to describe a range of compliant manufacturing and innovative construction including modular systems as alternatives to traditional construction.

The Department of Housing, Local Government and Heritage and the Government’s commitment to modern methods of construction has been clearly outlined in the new programme for Government, including binding targets for its use in at least 25% of all State-backed housing and an innovation fund via the Ireland Strategic Investment Fund, ISIF. Initiatives already in place under Housing for All to promote modern methods of construction include: the accelerated social housing delivery programme, the Roadmap for Increased Adoption of Modern Methods of Construction in Public Housing, the Construct Innovate technology centre, the National Demonstration Park, the Build Digital project, the built to innovate initiative, the development of standardised approaches to the design of housing and training for industry and public sector professionals.

In December 2022, the Minister for Housing, Local Government and Heritage approved funding of €94 million to address legacy land debt. The funding was contingent on the local authority committing to the early development of a housing proposal that would commence construction in 2023 or no later than 2024 and utilise modern methods of construction. A total of 26 sites received funding as part of an accelerated social housing delivery programme. This programme is being led by the Department of Housing, Local Government and Heritage and will see the delivery by 13 local authorities of at least 1,500 social homes using modern methods of construction across approximately 36 sites. It is intended to expand the use of the design and build procurement approach to enable greater use of modern methods of construction in social and affordable housing delivery.

Separately, the Department is engaging with Wexford local authority on piloting several three-dimensional modular units, which are expected to tender in the first half of 2025.

A standardised design approach is key in facilitating the ease of adoption of modern methods of construction. To support this standardised approach, the Department has identified a number of designs from the design manual for quality housing, adjusted to allow for ease of delivery utilising different forms of modern methods of construction, including three-dimensional modular systems.

Martin Daly (Roscommon-Galway, Fianna Fail)
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One unfortunate phenomenon in recent years has been the conflation in people's minds of prefabricated housing and modular housing. High-quality modular housing is a permanent housing solution. Prefabricated models like the prefabs provided for Ukrainian refugees were expensive and had a poor BER rating of C. These modern modular housing units are permanent solutions and are extremely energy efficient. By setting up a supply and manufacturing line, it is possible to manufacture houses every day of the week for 12 months of the year. This is the beauty of this approach. One of these homes can be provided five times faster than producing an on-site house.

I have looked at some of the research internationally and obstructions are pushed in the way of modular housing. Traditional building companies are slow to adopt the idea of modular housing. It is seen as a threat or disruption to traditional building supply. We must look at the provision of modular housing or off-site housing construction in a different light.

I am going to focus on the financial aspect. In a time when we are under threat from tariffs from Trump and we need to be counterintuitive and invest in our economy, especially in our indigenous industries and particularly where there is an identifiable need to provide homes, we must look at a different relationship between the State, including the Department of housing, the Department of Education and the OPW, and the modular construction industry. The financial model is different. It must be front-loaded. There must be cash flow because people are continuously employed on site.

Colm Brophy (Dublin South West, Fine Gael)
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The Government approved new housing targets up to 2030. Some 303,000 homes are expected to be delivered from 2025 to 2030. This equates to an average of approximately 50,500 homes, building up to 60,000 homes in 2030. To meet these very ambitious targets, it is necessary to use many different ways of delivery. Modern methods of construction are a key pillar in this housing delivery programme. This year, the accelerated social housing delivery programme and the Government initiatives described will continue to support the delivery of housing using modern methods of construction. Additionally, under the programme for Government, further initiatives will also be implemented to support the key pillar that accelerates the delivery of quality housing. I take on board all the comments the Deputy made about modular housing, too.

James O'Connor (Cork East, Fianna Fail)
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I thank Deputy Daly. I must say I agree with a lot of the points he made. I should not say that as the Chair, but anyway.