John McGahon (Fine Gael)
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Everyone in the House will be aware of how important the scheme to essentially pay for development levies through a waiver, introduced by the Government last April, was in boosting supply and construction, and in making sure there was no prohibitive cost for people trying to build their first home. I am talking predominantly about people in rural one-off housing, but the scheme is for anyone who is trying to build, whether it is apartment complexes or buildings in our rural communities. In County Louth, for example, the development levy cost is €11,600. That is a highly prohibitive cost to put on people at the same time as we see rising costs for building supplies, for example.

This scheme has worked very well. We have seen a huge increase in the number of commencements in the past 12 months as a result of it. As long ago as last September or October, only a couple of months after the scheme was introduced, Senators Cummins and Doherty started the process when they said in the House that perhaps the Government should try to extend this very good scheme in different ways. It should be extended right up to 2025 because that will then result in a very good boost in the number of people being able to build. That was brought home to me two or three months ago at a meeting on rural issues organised by my colleague in County Louth, Councillor Paula Butterly. The number one issue brought up at that meeting by families in rural County Louth was how successful the development waiver was and how unfair it will be, come April this year, when, like a cliff edge, the fee of €11,500 will be reintroduced in County Louth. That is why I wanted to try to bring the debate to the House.

This issue has been spoken about by a number of politicians, most recently by the now Taoiseach at the recent Fine Gael Ard-Fheis, when he said:

The waiver on development levies is working. It is making it cheaper to build and cheaper to buy. I want to work with my colleagues [in Government] to see if it can be extended.

That was said by Simon Harris only a few days ago. He made the same assessment in the Dáil when he was elected Taoiseach two days ago. I have no doubt that the momentum from the Government is moving in the direction of extending the scheme. In this Commencement debate, I am trying to impress upon the Government that we should get that announcement as soon as possible so a level of clarity is provided. If the scheme is not extended, that cliff edge will come towards the end of April.

The scheme has worked very well. I see that through my office at home in Dundalk, where many people, who are predominantly my age, are building for the first time. They are going through the entire process and are now worried about the prospect of an added cost of €11,000 being put on top of all their building requirements and building costs by the end of this month. It is crucial that we extend the scheme. It is a very good idea that has been proven to work, especially over the past 12 months, when we see how many commencements have started, particularly in rural one-off housing. I urge the Minister of State to take the message back to the Government that this is a good scheme, which has worked well, and that we desperately need to ensure it continues. We need to extend the waiver on development levies.

Joe O'Brien (Dublin Fingal, Green Party)
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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.

John McGahon (Fine Gael)
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That is an extremely positive message and I appreciate that the Minister of State has taken it to the House today. It is clear that the Minister is strongly considering extending the waiver. He is reviewing the waiver and has noticed and acknowledged that it has worked really well, reduced costs for people and means that people have decided not to sit on planning permissions for a year or two waiting for costs to come down. That is borne out in the data showing the number of commencements in the past 12 months. This is an excellent scheme which clearly helps with supply. Where I come from in County Louth, one of the biggest issues I deal with is planning and helping people who are my own age get planning permission. One of the reasons people did not initiate on the back of planning permission was that the development levies were prohibitive. We have now reduced those and people in my county are now building. We need to extend the waiver so more people can build in rural Ireland and to make sure it thrives.

Joe O'Brien (Dublin Fingal, Green Party)
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There is little doubt, as part of the package of measures introduced by Government under Housing for All, that the development contribution waiver and water connection charge refund schemes have been very effective in achieving their objective of influencing an immediate increase in housing commencement rates, which are now, as I said, at their highest level since records began in 2015. However, it is important to note that the schemes have been successful in achieving their objective due to their time-bound nature. Notwithstanding that, as I indicated, the Minister for housing is reviewing the schemes. Further to the ongoing analysis, he will bring forward proposals to extend the schemes for an additional time period if that is considered appropriate.

Eugene Murphy (Fianna Fail)
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I thank Senator McGahon for raising that important matter.