Joe O'Brien (Dublin Fingal, Green Party) | Oireachtas source

I thank the Senator for raising this issue and giving me the opportunity, on behalf of my colleague, the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, to update the House on the development contribution waiver scheme.

Increasing housing supply is key to addressing the problems at the heart of the housing system. To help address this issue, the Government's action plan on housing, Housing for All, has set average annual delivery targets of 33,000 homes per year over the period to 2030. This target is currently being reviewed. It has been noted over a period of time that a certain proportion of planning permissions for housing developments were not being activated at the rate envisaged, which has negatively impacted delivery and jeopardised the achievement of our targets. Increasing housing construction costs, including both labour and material costs arising from global supply issues, as well as other related viability issues, were the primary factors in this regard.

Arising from this scenario, on 25 April 2023 the Government approved additional measures under the Housing for All action plan to incentivise the activation of increased housing supply, while also addressing costs and viability issues faced by the construction sector. These measures included the introduction of temporary time-limited arrangements for the waiving of local authority section 48 development contributions and the refunding of Uisce Éireann water and wastewater connection charges. These newest schemes apply for one year to all permitted residential development, including scheme housing and rural housing, which commences on site between 25 April 2023 and 24 April 2024, with the works being required to be completed no later than 31 December 2025. This end date is intended to facilitate large schemes to be speedily brought forward and progressed, while also incentivising their completion as quickly as possible within a reasonable timeframe and delivering urgent housing supply.

Based on commencement notice data on residential construction starts, 32,801 homes were commenced in 2023 as against 26,957 in 2022, representing an increase of 22% over 2022. This trend has continued positively into 2024, with the latest commencement notice data indicating that works on a further 7,056 homes were commenced in January and February of this year, representing a 71% increase for those two months compared with the same period in 2023.These commencement rates for 2023, and for the first two months of this year, are at the highest levels since records began in 2015.

The temporary time-limited nature of the waiver and refund schemes has undoubtedly been a positive factor in influencing the speedier activation of planning permissions by developers since they were introduced last year, including planning permissions that have been granted for a number of years and were not activated. The schemes have also assisted in enhancing the viability of developments and incentivising the bringing forward of developments that might not otherwise have been financially viable. The Minister for housing, Deputy Darragh O'Brien, is reviewing the waiver and rebate schemes to assess if their extension is justified and can bring further benefit. Further to the ongoing analysis, the Minister will bring forward proposals to Government to extend the two schemes for an additional period if that is considered appropriate.