‘We need to find solutions for every person trying to access the housing market’
M easures to help ramp up new supply and reduce costs are on the way, Housing Minister Eoghan Murphy tells Paul Melia
DESPITE rocketing prices, Housing Minister Eoghan Murphy rejects any suggestion that buying a home is now solely the preserve of the rich.
“No, I don’t think so,” he says, but he admits there are serious problems.
“We have to keep affordability at the centre of everything we’re doing, whether it’s new supply or bringing homes in from vacancy. Next week I’ll be talking about affordability. In the Budget, there will be more measures. We’re going to keep on looking at this. We’re not going to keep on changing things, we’ll be improving where we can.”
The minister, who was appointed in June, is under pressure. While supply is returning – planning permissions are up, as is the number of homes under construction – prices and rental costs remain stubbornly high, and they’re rising.
While he refuses to be drawn on the Budget, he says measures will be announced next week to reduce the cost of building apartments, which developers appear loathe to build. That includes removing a requirement to provide car parking for each unit, which the construction industry claims adds up to €100,000 to the cost of each home.
“I’ve already flagged that [car spaces] is a ridiculous requirement in many parts of our cities where there’s excellent transport options, so we’ll be getting rid of that requirement,” he says.
He is also working on a model of providing affordable housing, using State-owned lands and across private sites, something that has been promised as far back as 2014.
It’s in part based on one developed by the Ó Cualann housing co-operative in Ballymun, which has delivered high-quality, three-bedroom homes for €170,000. Built on land previously owned by Dublin City Council, which provided sites for €1,000 each despite being valued at €30,000 on the open market, development levies amounting to some €8,000 each were also waived.
“We recognise we need to have affordability provisions brought back in when we talk about the delivery of housing,” the minister said. “If you look at the Ó Cualann model for co-operative housing, we need to look at how we can do that at scale. Everything about Ó Cualann worked. We need to do enough work here [in the department] so as other housing bodies or local authorities want to go with affordability, they have a central framework.”
Homes for affordable rent, typically at 80pc below market rates, will be delivered, he
‘We shouldn’t be afraid of having outside players if they’re doing things well to a high standard’
insists. He rejects claims the Government doesn’t want to interfere with the market.
“There’s been a massive interference with [the introduction of ] rent pressure zones. That’s unprecedented. We’re going to work a two-year change management plan so the Residential Tenancies Board is the regulator of the market.
“Our high rents are due to a lack of supply in the housing market. We need to find solutions for every person trying to access the housing market.
“We need to get people building to rent and that does require outside players because they have the experience. We shouldn’t be afraid of having outside players if they’re doing things well to a high standard.”
He also addresses criticisms of the €226m Local Infrastructure Housing Activation Fund (LIHAF), which will help fund services including roads and power. Applications for funding are currently being reviewed, but there has been criticism that affordable homes will not be delivered despite the massive State investment.
“I think what you’re going to have on the market in these places is affordable houses on almost all of the sites. I say almost all because I haven’t reviewed all of the sites yet. I know there are some difficulties and some harder cases around achieving affordable at the €300,000 to €340,000 mark, so there are some question marks about whether we can deliver that on some of the sites and we’re working to see if we can.”
He also addressed criticism that cash-rich developers, many of whom bought cheap sites during the downturn, were availing of the cash.
“It’s not their fault they benefited from cheap land. If I was on the private side, and the Government said it would fast-track infrastructure, I could see why they would want to get involved. There’s nothing wrong with the developer making a profit, but we need to make sure that they can do that and also provide accommodation at affordable prices.”
But he admits there has been
“some frustration” within Government circles with the construction sector, particularly around the issue of development levies and Vat. A levies rebate scheme was in place, but has not been widely availed of.
“I don’t want to give developers a kicking but there is a frustration in Government, and there was a frustration when Vat became the issue. We have €226m in LIHAF funding to fast-track the opening of sites, and that is essentially a waiver of development levies to get houses online. That’s going to work, and those types of things are the best way for the Government to achieve success using taxpayers’ money. Developers are taking that up, and if we can do a few more things around affordability, I think we will see more apartment building. There has been some frustration but we are working with them.”
Regulations around using commercial buildings for homes will be changed, most likely next month, and there will be incentives to build homes on infill sites in cities, which could include lower development levies.
He acknowledged that smaller builders were having problems accessing finance at competitive rates – something he believes will be addressed in the Budget. On constitutional property rights, he says at a time of crisis, the pendulum must swing back in favour of the public good.
“We have very strong property rights to protect the little guy. If you undermine that, the person who might get hurt is the person who shouldn’t. The balance of rights between public and private interests is fluid in how it’s interpreted. My view is if you’re in a time of crisis, maybe you’ve got to accept that it swings back in favour of the public interest and that’s what we’re trying to achieve around the vacancy stuff.
“Everyone’s interested in all these different aspects. I don’t want to talk about them until we’ve made a decision, otherwise it just looks like I’m flying kites.”