Coalition showdown looming over need to revise housing targets

With thousands more homes needed, Fine Gael wants to get building

FINE Gael ministers want to almost double the Coalition’s annual housing targets, setting the stage for a showdown with their Fianna Fáil partners and senior civil servants.

It comes as the Government’s target to build 29,000 new homes this year came in for renewed criticism this week from opposition parties and industry figures who believe the bar should be set much higher.

Previous research carried out by the academic Ronan Lyons indicates the country requires between 48,000 and 62,000 new homes every year.

Details of a study by the Housing Commission published this week also found Ireland may need up to 62,000 homes built annually until 2050 to meet demand, almost double the 33,000 annual target in Housing Minster Darragh O’Brien’s Housing for All strategy.

Senior Fine Gael ministers who spoke to the Irish Mail on Sunday this weekend said they also want the Government’s housing targets to be far more ‘ambitious’. One party Cabinet member said: ‘I don’t think we and Fianna Fáil are a million miles apart on where we want to set our targets.

‘We need to get more ambitious’

Media coverage seems to have missed what the targets are now; 29,000 houses are to be built this next year, and it will ramp up to 40,000 by end of decade, that’s what gives us an average of 33,000 up to 2030. But we need to get more ambitious. Some within Fianna Fáil get captured by the civil service, and that is where the opposition to more ambitious targets lies.

‘We wouldn’t disagree with the Ronan Lyons’ analysis that we need to ramp up to 48,000 to 62,000 on average between now and 2050. The question is how?’

The difficulty in significantly scaling up house building targets is starkly underlined in a briefing document that was prepared last month for Paschal Donohoe as he took up his new role as Minister for Public Expenditure.

In it, officials warned the Government will even struggle to meet its current target of building 29,000 new homes this year.

The document – seen by the MoS – states: ‘Achieving the overall delivery target of 29,000 new units will be challenging as there are emerging signs of headwinds relating to high construction costs, capacity constraints, rising interest rates and supply chain disruptions.’

Minister Donohoe’s civil servants warned: ‘The growth in completions has been driven by private sector delivery, as social and affordable housing delivery targets have struggled to be achieved. The reliance on private sector delivery is a vulnerability particularly as the outlook for 2023 delivery has started to shift downward.’

Officials also warned the delivery of much-needed social housing this year will be ‘challenging’.

The briefing added: ‘The number of new-build social housing units is growing, with 5,200 units delivered in 2021, however delivery remains challenging and the target of 9,000 new-build social housing units will not be achieved in 2022. Approximately 6,500 new social housing units will be delivered this year [2022], 2,500 units below target.’

Despite the challenges, Fine Gael ministers believe their Fianna Fáil Cabinet colleagues are inclined to be ‘overinfluenced’ by the ‘conservatism’ of the civil service.

One Fine Gael minister said: ‘Civil servants won’t want targets though that they believe are unachievable.

‘There is always this dilemma; if you have a higher target, you are more likely to miss it which is defined as “failure”. But is it a failure even if it means more homes being built than if the target was lower? No, the targets have to be far higher.’

Raising the targets in the Housing for All plan are likely to cause tensions within the Coalition. However, Fianna Fáil leader and Tánaiste, Micheál Martin, has accepted completion rates will have to be higher, partly due to the ongoing influx of Ukrainian refugees.

Speaking at an event on housing supply last month, Mr Lyons, Trinity College Dublin associate professor in economics, said the Government needs to be delivering between 48,000 to 62,000 homes a year to meet current demand.

Mr Varadkar has also previously indicated more than the Government’s current target would be needed to address the chronic housing shortage. In his address to the Fine Gael Ard Fhéis in June 2021, Mr Varadkar set a target of up to 40,000 homes to be built every year to reach a target of 70% home ownership by the end of the decade.

At the time he said the dream of owning a home is ‘out of reach for far too many’ and ‘must again become a reality’.

The significant increase in targets now being sought by Fine Gael ministers is broadly in line with what their Sinn Féin rivals have been calling for. Attacking the Government’s current targets in the Dáil, Sinn Féin finance spokesman Pearse Doherty said: ‘It needs to be between 42,000 and 62,000 every single year.’

‘The targets have to be far higher’