A new €1 billion housing plan due to be unveiled by Cabinet today will aim to cut the cost of building homes, renovate more vacant properties and see a larger number of cost-rental apartments rolled out.
Minister for Housing Darragh O’Brien will bring a number of memos to Cabinet to expand vacant properties grants, provide subventions to builders where they develop cost-rental apartments, and cut the cost of building homes through waivers.
Ministers will also consider Irish Water connection fee refunds, while Taoiseach Leo Varadkar pledged that the various measures will bring down the cost of housing.
Mr O’Brien will firstly bring a memo to Cabinet on the existing Croí Cónaithe vacant property grant scheme. The grants will be expanded so that they are available to homes built before 2007. Under current rules, the grants are only applicable to homes built before 1993.
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The grant will also be expanded so that it is available for a rental property. It is currently only available for homes purchased for owner occupation. As part of the changes, a person could buy a property, get the grant, renovate it, and then rent it on the long-term rental market. The actual grant rates are also going to be revised amid recent criticism that the cost of building materials meant that the grant was not large enough to cover costs.
Under another memo, Mr O’Brien will detail plans to promote the construction of cost-rental properties. Cost-rental housing provides properties to rent at 25 per cent below the area’s market rate.
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A new cost-rental subvention scheme will provide funding of up to €150,000 per building. Developers and the Land Development Agency can avail of the subvention. The Government is targeting between 4,000 to 6,000 apartments under the scheme which will be available for a set period of time, between 2023 and 2027. The aim of the plan is to increase the supply of homes that are more affordable to renters.
A third memo will aim to bring down the cost of building homes, through a temporary development contribution waiver on new homes. The waiver on development fees, under which property developers contribute to the cost of providing public infrastructure and services, would be contingent on the home being completed within a defined period of time, in an effort to speed up supply. A source said the waiver will not impact on local authorities’ ability to fund infrastructure as they will be reimbursed directly from the Government.
The contributions are currently applied at varying rates for each local authority area. It is understood Ministers are also looking at Irish Water connection charge refund arrangements.
The cost-rental scheme will cost between €500 million and €750 million, while the development fee waiver scheme will cost more than €300 million.
On Monday, Taoiseach Leo Varadkar pledged that the Government would assume the costs of linking up public services like water and roads to new homes as part of the package.
“It will cost hundreds of millions of euro,” Mr Varadkar said on the sidelines of a wind energy conference in Belgium.
“At the moment, development levies fall on the developer and ultimately fall on the person buying the home,” he continued.
“We’re changing that now, so for the next couple of years the Government, the public, the taxpayer will cover the cost of that public infrastructure, and that will bring down the cost of housing and accelerate the amount of new homes being built.”
The infrastructure includes linking new housing estates or apartment blocks to the water, road network or footpath system. He denied that the move was a giveaway to property developers.
“I absolutely know it will be misrepresented that way and presented that way, I totally reject that presentation,” he said.
Mr Varadkar said it was “difficult to say for sure how many additional houses will be built” on top of already forecast rates of between 25,000 and 30,000 homes annually, but that the Government believed the measure would help it reach its target of 30,000 completions this year.
