Written answers

Tuesday, 4 July 2017

Department of Housing, Planning, Community and Local Government

Housing Policy

Photo of Barry CowenBarry Cowen (Offaly, Fianna Fail)
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653. To ask the Minister for Housing, Planning, Community and Local Government the number of new dwellings which will be required each year over the coming 15 years based on headship rates and demographic projections and taking account of obsolescence, in view of under-supply of new housing compared to demand for the past number of years. [31084/17]

Photo of Eoghan MurphyEoghan Murphy (Dublin Bay South, Fine Gael)
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The Rebuilding Ireland Action Plan for Housing and Homelessness, which is available at the following link , is a multi-stranded, action-oriented approach to achieving the Government’s housing objectives, as set down in the Programme for a Partnership Government. At its heart, it aims to increase housing supply, across all tenures, to 25,000 homes per year by 2021. The 25,000 target was the Economic and Social Research Institute (ESRI) estimate of the housing requirement based on demographic change, household formation and a level of obsolescence of existing stock.

With regard to housing supply requirements over the coming 15 years and beyond, the new National Planning Framework (NPF), to be titled Ireland 2040: Our Plan, will address emerging trends such as a potential population increase of one million, more than a fifth of whom will be over 65 by 2040.

As was broadly indicated in the NPF Issues and Choices consultation paper published in February 2017, over 500,000 new homes will be required to support an additional projected population of one million people by 2040. The ESRI has undertaken demographic and econometric modelling work to inform the drafting of the NPF.  This work effectively provides a baseline ‘business as usual’ scenario as well as examining alternatives. Projected national housing supply requirements for the draft NPF have been determined based on headship rates, demographic projections and a rate of obsolescence.

Published data from Census 2016 has also become available since April 2017 and coupled with the work of ESRI, is informing the drafting process. As further planned data publications become available from Census 2016, they will be factored into policy considerations, as appropriate.  

An initial draft of the NPF is nearing completion for consideration and approval by Government with a view to publication as a draft for public consultation over the Summer period, running into September.  The NPF remains on schedule for completion by the end of this year.

Photo of Barry CowenBarry Cowen (Offaly, Fianna Fail)
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654. To ask the Minister for Housing, Planning, Community and Local Government the number of new dwellings his Department estimates that will need to be built per year before supply begins to have an impact on enhancing affordability on rental prices and house prices. [31085/17]

Photo of Barry CowenBarry Cowen (Offaly, Fianna Fail)
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655. To ask the Minister for Housing, Planning, Community and Local Government his views on whether new housing supply in the coming years will have a downward impact on house purchase prices and on renting prices as opposed to just having an effect on stemming the upward inflation in both house prices and rents; and if reversing the price level rises in both is a policy goal of his Department. [31086/17]

Photo of Eoghan MurphyEoghan Murphy (Dublin Bay South, Fine Gael)
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I propose to take Questions Nos. 654 and 655 together.

Fundamentally, it is the lack of supply, across all tenures of housing, that is widely accepted as being primarily responsible for driving the high levels of house price and rental inflation we have seen in recent years. Residential construction output reached unsustainably high levels, with peak output of 93,000 new homes in 2006, and  then dropped to 8,300 in 2013, including a large proportion of single houses.  As a result, the construction of starter and affordable homes at scale came to a virtual standstill.

The Government has made housing a top priority, bringing forward the range of measures under the Rebuilding Ireland Action Plan for Housing and Homelessness in July 2016. The overarching objective of Rebuilding Ireland is to increase overall housing supply to a more sustainable 25,000 homes per year by 2021. The 25,000 target was the ESRI estimate of the housing requirement based on demographic change, household formation and a level of obsolescence of existing stock. The longer-term objective is to create a functioning and sustainable housing system, where supply more closely meets housing demand over time.  

In order to directly influence and generate supply of new homes, Rebuilding Ireland contains a suite of actions that will increase housing construction and refurbishment, bringing forward the supply of thousands of extra homes. Under Pillar 2 of the Action Plan, 47,000 new social housing units will be delivered by 2021, supported by €5.35 billion in Exchequer funding. In terms of direct construction and refurbishment, 26,000 will be provided as part of the 2021 target.  So far, good progress has been made and there are now over 10,000 new homes in the social housing construction pipeline, details of which are available at the following link; .

Pillar 3 contains a set of actions targeted at increasing private housing supply. The €226m Local Infrastructure Housing Activation Fund has now been fully allocated and will fund key enabling infrastructure to open up 34 sites across 15 local authorities. The LIHAF funding has the capacity to encourage the supply of 23,000 new homes by 2021.

Also under this Pillar, the State land bank is being actively targeted for the provision of new homes in the immediate term. In April, the Rebuilding Ireland Map was published, containing details of over 2,000 hectares of land in public ownership, with the potential to deliver up to 50,000 new homes nationally. As set out in the Strategy for the Rental Sector, the commitment to bring forward an affordable rental scheme is being progressed through kick-starting  supply on such lands held by local authorities.

In practical terms, the development of these public lands will mean accelerating social housing delivery and securing more homes for sale and rent at lower and more affordable price points. Where local authorities have large sites in their ownership, there is a real opportunity to bring them forward for mixed tenure housing, at much more affordable price points, where the Council can directly influence the housing provision through the procurement process and development agreements. All local authorities have been requested to prepare Strategic Development and Management Plans for residential lands in their ownership to ensure they are brought forward for development at the earliest opportunity.

A key factor in terms of housing supply at scale, of both houses and apartments, is the cost of construction and the associated issue of viability. In this regard, a Working Group on housing delivery costs was established, led by my Department, to carry out a detailed analysis of housing delivery input costs with a view to identifying economies across a range of constituent areas such as finance, planning, design, land costs and levies. The Group comprises representation from all key public sector and industry stakeholders and is scheduled to complete its Report in the coming weeks.

Recent housing activity reports, available on www.rebuildingireland.ie, show that strong supply-side measures under Rebuilding Ireland are beginning to have a positive impact with all output indicators showing steep upward trends. However, it is crucial that we continue to focus on supply and particularly the supply of social and affordable homes at scale.

To this end, the Taoiseach signalled the Government’s intention to carry out a focused review of Rebuilding Ireland, as we approach the completion of the first year of its implementation.  This work is now under way, with an emphasis on strengthening the measures already in place  and identifying new initiatives that add value and raise ambition. As part of the review process, my Department will focus in particular on the broad issues of housing supply and affordability for different market segments, building on the measures already being advanced.

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