Housing

What has changed?

  • The Department of Environment, Community and Local Government (DECLG) has been replaced with a Department of Housing, Planning and Local Government. Simon Coveney, TD has been appointed as Minister from Agriculture, Food and the Marine.
  • The most significant change is the elevation of housing and planning policy to a Cabinet Minister. Formerly these were dealt with by a Junior Minister in DECLG.
  • An Oireachtas Committee on Housing and Homelessness has been created and there will be a Cabinet Sub-Committee on Housing.
  • The Programme for Government commits to the publication of an action plan for housing within the first one hundred days.

 Positives for business

  • The creation of the new ministerial post, especially the linking of housing and planning at cabinet level.
  • The Action Plan for Housing; Construction 2020 – the last strategy for the sector – was widely seen as being aspirational rather than practical and resulted in only limited engagement between government and business.
  • There is an emphasis on engagement and collaboration with stakeholders.
  • Exploration of the reduction of VAT from 13.5% to 9% on new affordable homes.
  • Collaboration with the Central Bank on a Help to Build scheme for the private sector.
  • Incentives for refurbishment and change of use of existing vacant buildings from commercial to residential use.
  • Introduction of a town and village renewal scheme.
  • A "root-and-branch" review of the planning system to reduce uncertainty and delay.
  • Improved co-ordination in the supply of social housing between approved housing bodies and local authorities.
  • Reform of taxation relief for landlords who accept rent supplement and HAP tenants.
  • The development of a cost-rental model for the rented sector.
  • Re-prioritisation of the public capital programme towards unlocking development sites.
  • Expansion of the targeted capital contribution rebate system.
  • Review of the vacant site tax and an audit of land held by the public sector.
  • Support for mortgage holders who are in arrears.

 Outstanding issues and missed opportunities

  • There is an ongoing review of An Bord Pleanála which needs to be concluded as part of the “root and branch” review of planning policy.
  • The review of mortgage lending policy by the Central Bank of Ireland will be vital in the context of delivering new housing output.
  • The clear commitment to fiscal stability is more than welcome although it is apparent that room for sensible long term investment is limited by the fiscal rules. The government should seek for more flexibility in the EU fiscal rules ending the bias toward current over capital expenditure.
  • The addition of €4bn in expenditure to the existing capital plan is welcome, but it is significantly less than what will be needed over the coming years. Ibec believes that at least three times the addition amount would be required over the course of the plan to come close to meeting a 4% of GDP target.
  • If, as indicated, this expenditure is delayed until after a mid-2017 capital plan review it will be 2018 at the earliest that additional money can be allocated. In addition, given average timelines for large projects it could well be 2020 by the time any actual activity takes place.
  • The increase in expenditure would raise average capital spend as a proportion of GDP over the 2016 - 2021 period from 1.9% to 2.2% and well below the 3.1% which would be necessary to deliver on a target of 4% of GDP by 2021.

Contact Peter Stafford, housing policy at peter.stafford@ibec.ie
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