Reduced social housing quota set to lead to rise in building activity

Reduced social housing quota set to lead to rise in building activity

A significant increase in housebuilding is expected in coming months as builders take advantage of new, reduced requirements for the provision of social housing.

Minister for the Environment Alan Kelly has directed all local authorities to begin enforcing new regulations on developers that include a reduction in the quantity of social housing they must provide in any development of 10 dwellings or more.

Department sources say the changes will produce at least 4,000 extra units of social housing between now and 2020.

It is believed builders have been holding back on lodging commencement notices for new developments until this directive – which commences the revised part V obligations under the Urban Regeneration and Housing Act – was issued.

Under the revised Part V regulations, the requirement that developers set aside 20 per cent of all dwellings for social and affordable housing has been halved, to 10 per cent.

However, builders can no longer offer cash to local authorities in lieu of this obligation, or offer sites or land elsewhere, meaning on-site social housing in every new development of 10 or more dwellings is guaranteed.

In the preamble to the directive, Terry Sheridan, principal planning officer at the department, says the main purpose of the Act is “to assist in addressing the current housing supply situation and stimulate increased activity in the construction sector”.

The directive says: “From a housing supply perspective the indications are that pending the formal commencement of the new legislative provisions in the 2015 Act with regard to part V and development contributions, there has been some degree of holding back on the commencement of site by developers.

“Planning authorities are therefore requested to implement the new legislation without delay.”

The new arrangements are in force since Monday and apply also to “developments where houses have been commenced/ constructed but not yet sold”.

Mr Kelly said the new arrangements would see guaranteed delivery of social housing units.

“It should see about 4,000 additional social housing units by 2020, and had this policy been put in place during the construction boom, there would be about 10,000 more units of social housing in place now.”

The Construction Industry Federation said that although the reduction in the part V obligation was welcome, the regulations still imposed an obligation on new housebuyers to contribute to social housing.

“This is inequitable,” a CIF spokeswoman told The Irish Times.

“It has always been the policy of our industry that part V, the social and affordable housing obligations for housing developers, should have been replaced by a 1 per cent levy of sales of all residential property units, both new and second-hand.”

New guidelines were needed on the implementation of the legislation, she added.

The directive also calls on local authorities to begin preparatory work on a new vacant site levy, to be in force by 2019, to encourage owners to either develop the sites or sell them.

By January 1st, 2017, local authorities must establish a register of vacant sites in lands zoned for residential or regeneration use.

By June 1st, 2018, they must issue notices to owners of vacant sites that they will be liable for a levy of three per cent of its market value per year, in respect of 2018, with effect from January 1st, 2019, as long as the sites remain vacant.

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