The Department of the Environment last night rejected a claim by the Irish Home Builders' Association that private house-buyers will have to pay up to 24 per cent extra to cover the cost of the Government's social housing plan.
The IHBA said the Planning and Development Bill would mean that up to 20 per cent of individual housing sites would be transferred as a condition of planning permissions to county councils for "social and affordable" housing, with the builder compensated on the basis of the existing use and not the market value of the land.
The Government's proposals, the IHBA said, would mean that the cost of the confiscated development land would therefore have to be borne by the private house-buyer so that the "social and affordable" housing would be cheaper.
The IHBA claim came yesterday as the Minister for the Environment, Mr Dempsey, announced he is to appoint consultants to develop a model housing strategy to assist local authorities in preparing for and implementing their housing strategies under Part V of the Planning and Development Bill.
The consultants will also be asked to make amendments to guidelines that have been drafted by the Department of the Environment dealing with the implementation of Part V of the Bill and to prepare a step-by-step guide illustrating how the guidelines are used to develop the model strategy.
The Department placed an advertisement in national newspapers inviting applications from consultants to carry out the study.
A spokesman for the Minister said last night that house prices in the present seller's market were determined by how much the builder could get on the market and bore little or no relationship to the costs of providing the house.
"Indeed there is no evidence to suggest that the price of houses is in any way being kept at a reasonable price by the members of the IHBA in the absence of the proposed measures." he said.
"The proposals in the planning Bill, on the other hand, should moderate the huge increase in the value of land that is conferred by zoning for residential development because developers will have to factor the requirement to reserve a quota at existing use value into what they have prepared to pay for the land."