The announcement yesterday evening by Minister for the Environment Alan Kelly that he is to reduce levies for construction and make changes to planning standards, will increase the supply of houses and lower construction costs significantly, according to the Construction Industry Federation (CIF).
Director General of the CIF Tom Parlon stated: “The removal of costs in terms of the levies for starter homes up to €300,000 will directly lower the input costs of construction as they add between €8,000- €10,000 per unit. The high cost of construction of a new home- in many cases a burden higher than the selling price- is making the building of new homes completely unviable. At the moment we are building in the region of 12,000 new housing units annually across the country, which is far short of the broadly agreed national amount needed of 25,000 units. So today’s announcement will go some way to enabling our members can get back out building, and provide the homes that are badly needed across the cities and country”.
The package agreed between Minister Kelly, and Minister for Finance Michael Noonan will specifically increase the number of apartments that are built in Dublin, via changes to the planning standards, which is expected to reduce construction costs by up to €20,000.
According to Parlon “The ‘harmonisation’ of these planning standards and the knock-on effective reduction in costs will bring building across all of the different local authorities back to a level playing field. Right now the Dublin City Council standards for example, increase the building of 100 new apartments by 22% when compared to the national guidelines produced by the Department of Environment, so this needs to change urgently.”
“These measures enable choice for renters in terms of what type and size accommodation they wish to avail of, and they have the potential to kick start the building of homes. This can be viewed as part of a broader policy from Government to increase construction outputs across the country. This is a great step in the right direction, but we also expect further action from Government on previously promised measures to further increase the supply of housing”.
“We are keen to see further details of how these new measures will be rolled out, and when, and we look forward to Cabinet approving these proposals when they meet next week”.