Housing crisis ‘holding us back as a country’ and ‘causing intergenerational division’ - Taoiseach

“A mixture of carrot and stick” can be used by the Government to ensure developers with residential planning permissions actually build homes, Taoiseach Leo Varadkar has said.

Acknowledging the housing situation was an emergency, Mr Varadkar said: “We need to turn the corner on housing, it is an emergency, it’s affecting people in so many different ways.

“It’s holding us back as a country, and it’s causing intergenerational division that I don’t like to see.

“It’s really going to be a case of let’s do everything, unless there’s a really good reason as to why we can’t,” he said.

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Mr Varadkar began his second term as Taoiseach pledging to go “all out” to address the housing crisis, comparing the response needed to the kind of action seen during the Covid-19 pandemic.

In a round-table interview with reporters, the Fine Gael leader has now expanded on what he meant and also on what measures can be applied to boost the supply of housing.

He said there were a lot of levers for increasing the supply of housing and “we just need to make sure that we use the right ones”.

He referenced grants, Government investment and tax measures as well as legislative actions like reform of the law to speed up the planning permission process.

Mr Varadkar said the Croí Cónaithe scheme for cities would help deliver more apartments. The scheme includes a viability fund to kick-start construction of developments that already have planning permission.

He said a lot of builders had said they were not able to proceed with apartment developments because it was not financially viable. Such claims would be examined but “if it is the truth, then Government needs to step in”.

There are about 70,000 planning permissions for new homes – mostly apartments – that are not being built “and I want to see them under construction”, he added.

On whether the Government can put pressure on developers with planning permissions to deliver homes, he said: “I think we can use a mixture of carrot and stick.”

He said programmes like Croí Cónaithe were “the carrot” and the Land Development Agency could do things like pre-purchase apartments and homes for social and affordable housing “that can be bankable and can help developers build”.

Other mechanisms were needed too, Mr Varadkar said, citing the planned Residential Zoned Land Tax (RZLT). Due to come into effect in 2024, the tax will see landowners faced with a tax of 3 per cent of the market value of land that is zoned for residential use but is not being developed.

He said there were no plans to increase the rate and, asked if it was a mistake to introduce it at 3 per cent, he replied: “I think we have to see how it works.”

On the refugee crisis Mr Varadkar said 60,000-70,000 people from Ukraine were already in Ireland and “there are going to be more”. He said “a lot of them are going to stay, they’re going to be here for the medium to long term and we will need to move to an approach next year that isn’t just about an emergency response… but is more about permanent housing solutions.”

He also said: “We have to look at it in the round, you know, there are people here for example, 5,000 people still living in direct provision, who have status. It’d be good if we could find a way to accommodate them to free up those places.

“And then also there are a lot of Irish people, Irish citizens and EU citizens who are on housing lists for a very long time. So we need to look at that in the round and make sure that we’re fair to everyone.”

He said Minister for Rural Development Heather Humphreys would bring a memo to Cabinet early in the new year on the planned €50 million community solidarity fund for places that have taken in refugees.

“We want to set aside a fund that can help those communities – not just for the benefit of the new arrivals, but for… the existing community as well.”

Mr Varadkar added: “If you think about parts of the north inner city, parts of Donegal, parts of Kerry, parts of north Clare where there’s been a big increase in the population, just by virtue of the fact that there are people from Ukraine and people seeking international protection.

“And we want to make sure that that’s recognised in some way.”