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Government expects 25,000 new homes built in 2021 - half by State or approved housing bodies

The shutdown of the industry slowed progress this year but it is unlikely further lockdowns would stop construction.

Image: Shutterstock

UP TO 20,000 new homes are expected to be completed by the end of 2020, despite disruption to the construction industry in the early part of the year due to the Covid-19 pandemic.

The Economic and Social Research Institute (ESRI) has said 33,000 new units per year are needed to keep up with population growth in the country.

That target will not be met this year, but the government has said between 17,000 and 18,000 homes will be completed.

Industry experts are more optimistic than that. Speaking to TheJournal.ie, Tom Parlon, director general of the Construction Industry Federation (CIF), said he expects close to 20,000 homes to be completed by the end of this year.

Though he said the initial shutdown of the industry in the first pandemic lockdown was “a big shock”, intensive work in the months afterwards kept many projects on track. 

He said a strategy to get construction employees back to work safely, as well as international evidence indicating low risk on sites, allowed the sector to re-open in May during Phase 1 of the government plan to ease the first lockdown restrictions. 

“Thankfully we got our act together quickly and we were able to look at other jurisdictions where construction had largely continued,” he said.

“We were grateful, we were the first big group to get back to work and that’s thanks to the discipline with the health and safety measures and the good procedures proposed and put in place.”

“When the lockdown came it did provide for essential services construction work on some housing projects and HSE hospital projects. Permission was also given for social hosing projects to start again,” he said.

We believe that by close of business on New Year’s Eve we’ll have completed close to 20,000 homes, there was a substantial kick-up recently, a lot of work has been done to get some projects finished before the end of the year.
The forecast for next year surpasses that, we’re looking towards 23,000. That’s provided there are no further big lockdowns that would stop construction.

Parlon said the industry has “adapted extremely well” to working during a pandemic, but the pre-Covid barriers still remain. 

“The biggest impediment on construction is planning. Planning delays are still a major issue. Also, the availability of services, the fact that there is a lack of water or waste water connections is stalling a massive number of projects,” he said.

Affordable homes

When it comes to affordable housing and providing appropriate accommodation to reduce the level of homelessness in the country Parlon said the sector will “build whatever”, but it is up to the State to put plans and funds in place. 

“These are policy decisions for government to make. In terms of one-beds clearly there is a need if you hear the likes of Peter McVerry, we obviously have a lot of homeless individuals – particularly in Dublin.”

Parlon said private developers have turned to models like co-living because – unlike single-unit apartment blocks – they make financial sense.

“It became a viable option because there was a viable financial plan for co-living. It’s difficult to have a viable financial plan for apartment blocks at the moment,” he said.

“Lots of finance consultancy firms have looked at the viability, taking all costs into account, looking at the rent available and so on, but the figures don’t add up. The industry is ready and available to build but if firms are not in a position to get financing for those projects they can’t happen.”

Recently Taoiseach Micheál Martin said 9,000 of the new homes built this year will be for public housing.

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Next year, 12,500 of the expected 25,000 new units will be public housing – either State builds of approved housing body builds. 

“That leaves 10,000 to 12,000 private sector houses being built. We all need to concentrate on the reality,” he said.

“It is grand to say we just want it all one way. Some people want cost rental, which is valid. I have great respect for the cost rental model, but there will have to be a mix in different sites.

Our party believes in social housing. That is why this year’s budget is historic. Very substantial funding is going to public housing. A record sum of €3.3 billion has been allocated for housing, but we need to get projects going. We need to get houses built as well.

Martin said €468 million in affordability measures will be spread out across the serviced sites fund, the local infrastructure activation fund, the Rebuilding Ireland home loan scheme and the Land Development Agency. 

Some €110 million has been provided for the affordable housing and cost-rental schemes and €435 million will go towards a new programme for funding the delivery of cost-rental homes.

“That will see funding made available to approved housing bodies in 2021. The new cost-rental equity loan will allow approved housing bodies to borrow up to 30% of the cost of cost-rental homes from the State and is modelled on, but completely separate from the successful capital advance leasing facility model for funding social housing,” he said,

“In addition, the Land Development Agency has indicated its intention to include a significant proportion of cost-rental homes on its portfolio of sites over the coming years. This will further increase the scale of this new sector.”

An affordable housing scheme forms part of the government’s objectives for 2021 and detailed preparation of the scheme was signed off on in September. This scheme will allow low and middle income workers to buy State subsidised homes.

The government allocated €75 million for the scheme in Budget 2021 to provide 2,000 affordable purchase homes, but has not indicated how many of these homes will be completed in 2021.

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