Government asking Catholic Church for land to build housing on is farcical

Is there not something entirely farcical about the Government asking the Catholic Church for land to build housing on? Minister for Housing Darragh O'Brien has written to the Primate of All Ireland, Archbishop of Armagh Eamon Martin, seeking land and vacant property that could be used as part of the Government's new action plan on housing.

In his letter, he is said to have highlighted comments made by the archbishop and other clergy on the need for action to address the housing crisis.

The story might have passed as a Waterford Whispers spoof had it not appeared on the front page of The Irish Times last Monday.

So as controversy lingers about the level of church input into the proposed National Maternity Hospital on the St Vincent’s University Hospital campus, we’ve now added to the pageantry with an official request for church help on housing.

Was it the act of asking the church, the same institution that so successfully shirked its financial responsibility to abuse victims, that galled? It initially agreed to pay €128 million as part of the redress to victims, later upping it by €350 million when the 2009 Ryan report came out, though it hasn’t, as yet, paid this new amount. The final redress bill is expected to be €1.5 billion.

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Or was it simply the act of asking a private entity for land when the State is sitting on acres of it? In Dublin alone, local authorities and Nama are said to control half the zoned housing land in the city, enough to deliver 70,000 homes, three years’ supply at the current rate.

Is the Government planning to go to the GAA, the State’s other big landowner, with the same request or is this something to do with the church’s diminished public standing?

And why did this half-baked notion come on the eve of the Government’s masterplan to address the housing issue when it’s meant to be presenting us with a fully worked-out solution?

Sinn Féin was quick to seize the initiative, saying it smacked of desperation particularly given how much cash and property the church has failed to produce in the past.

There was zero mention of the approach as the Government launched its Housing For All document, which promises 300,000 homes by 2030, three days later.

Deals

The church sold a prime piece of real estate in Drumcondra in Dublin close to Croke Park to the GAA a few years ago, part of which was later sold to global property group Hines for €105 million.

Building development firm Lioncor last year paid out a reported €16 million to the order responsible for Blackrock College, the Holy Ghost or Spiritan congregation, for a plot of land adjoining the school at Cross Avenue, Blackrock.

Is the church likely to bypass these kind of deals and the money involved for less-preferential deals with the State?

The interplay between land and house prices is at the core of the crisis here. The Society of Chartered Surveyors Ireland (SCSI), the industry body that examines the cost of construction most closely, estimates that land is a significant component of the so-called “soft costs”of construction along with things like development levies, professional fees, VAT and developers’ margins.

In a 2020 report on the cost of delivering a typical three-bed housing unit in Dublin, it highlights that the cost-saving differential in the delivery of private housing compared with social housing can be within the €140,000-€160,000 range due to the nil cost attributed to land, levies, finance and developers’ margin.

This confirms that if the State was to build directly on its own land, the savings would be considerable. Land values have soared in recent years aided in part by Government planning regulations allowing for more high-density building.

This is how development companies make their money and how they can afford to sit on land without building for several years.

Funding

While Cairn Homes is being frustrated from building on the high-profile RTÉ site, which it bought in 2015, it won't be out of pocket despite the long lead-in time because of the appreciating land value at the core of the project.

The Government's Housing for All plan acknowledges the land element to an extent. It bolsters funding for the Land Development Agency (LDA), which is tasked with boosting housing supply on State-owned land, to €3.5 billion while giving it a role in activating dormant planning permissions.

A new system of “land-value sharing” will also force landowners to pay a proportion of the increased value of a holding – if the land is rezoned – to the State.

However, the number of affordable units the plan is proposing to build on State land for the sales market is relatively small, just 36,000 by 2030, which equates to 4,000 a year. And it’s not clear what constitutes affordable.

It also appears that a significant portion of these will be sold via the new shared equity scheme, which will effectively see the Government bridging the gap with a subvention and the buyer effectively taking out a second mortgage with the State.