Martin Daly warns traditional construction will not meet housing targets

Minister, as we know, housing production is the number one priority for this government and is reflected in the programme for government. Ireland's housing need is real and we need to consider all methods of construction to deliver on the targets that we have set out in the programme for government. We have to increase housing supply, improve sustainability and boost construction productivity. A recent report by the National Economic and Social Council published last autumn, which was welcomed by the government, was the first critical review of modern methods of construction in a landscape in Ireland. The report was welcomed by the industry, also welcomed by government. It looked as a template for the forward planning for modern methods of construction, but specifically here today I'm asking about modular housing. It's coming at a crucial time because it's clear to me that the traditional method of construction will not meet the targets that we have set out, the ambitious targets we have set out in the programme for government. So we need to involve all aspects and foster all areas of construction in Ireland, not just on-site but off-site. One of the strengths of the report is that it has adopted the UK's seven category of modern method of construction definition framework, which is going to bring much-needed clarity on what constitutes modern methods of construction in Ireland. We've got a hundred off-site manufacturing companies operating in this country, with 27 of them providing complete housing solutions. In my own constituency, there's a company called Lydan Designs. They have 40 people recruited into their manufacturing facility. Master carpenters, plumbers, electricians, architects, engineers. They've taken on eight apprentices out of the local school starting in September. So this is a vibrant company with an investment in the region of 10 million euros, most of it from their own resources and from private equity, with very little support from the state. But their problems, and they have built schools for the Department of Education in St. Flannans, in Burr, and they're in the process of constructing a national school in Kildare. But their problems are really crystallised in what has been identified in this report. So, because modular housing is a disruption of the traditional methods of construction, it's going to require a different approach. They mentioned institutional leadership, that's us. Standards and innovation, that's us, and the building industry. Ambitious targets, that's us. Innovative finance, that must be us, because it is a different financial model that is required for modular housing. Much of the finance has to be front-loaded. You can't set up supply lines without predictability and consistency. You must have multi-annual planning, and I'm talking about the Department of Education in this respect, but also in the housing sector. We really do need to review our relationship with this modular construction in Ireland, so that we can bring on smaller Irish companies, indigenous companies, especially in this climate, who are offering the high-quality jobs in provincial towns throughout Ireland. And to finish up, I spoke last night at the Parliamentary Party meeting, and another deputy from Fianna Fáil from another part of the country identified the exact same issues around modular housing and its ability to get a foothold into the provision of housing in Ireland. Thank you, Deputy Daly. Thank you, Deputy Daly. Minister. And obviously, thank you, Deputy, for raising this issue and providing me with the opportunity to update the House on this important matter. Modern methods of construction are a key measure to support the delivery of housing and under the Housing for All in the Programme for Government, and it has the potential to boost productivity, increase efficiency, and improve sustainability in the construction sector. Modern methods of construction is the term used to describe a range of compliant manufacturing and innovative construction, including modular systems as alternatives to traditional construction. The Department of Housing and Local Government and the Government's commitment to modern methods of construction has been clearly outlined in the new Programme for Government, including binding targets for its use in at least 25% of all state-backed housing, and an innovation fund via the Ireland Strategic Investment Fund. Initiatives already in place under the Housing for All to promote modern methods of construction include the Accelerated Social Housing Delivery Programme, the Roadmap for Increased Adoption of Modern Methods of Construction in Public Housing, the Construct Innovate Technology Centre, and the National Demonstration Park. The Build Digital Project, the Build to Innovate Initiative, and the development of standardised approaches to the design of housing and training for industry and public sector professionals. In December 2022, the Minister for Housing and Local Government and Heritage approved funding of £94 million to address legacy land debt. This funding was contingent on local authorities committing to the early development of a housing proposal that would commence construction in 2023 or no later than 2024 and utilise, obviously, modern methods of construction. A total of 26 sites received funding as part of an Accelerated Social Housing Delivery Programme. This programme has been led by the Department of Housing, Local Government and Heritage and will see the delivery by 13 local authorities of at least 1,500 social homes using modern methods of construction, right across approximately 36 sites. It's intended to expand the use of the design and build procurement approach to enable the greater use of modern methods of construction in social and affordable housing delivery. Separately, the Department is engaging with Wexford Local Authority with regards to piloting a number of three-dimensional modular units which are expected to tender in the first half of 2025. A standardised design approach is key in facilitating the ease of adoption of modern methods of construction. To support this standardised approach, the Department has identified a number of designs from the Design Manual for Quality Housing which have been adjusted to allow for ease of delivery utilising different forms of modern methods of construction including three-dimensional modular systems. Thank you very much. Deputy Daly, please. So, one of the unfortunate phenomena in the past number of years has been the conflation of, in people's minds, the public's minds of prefabricated housing and modular housing. High-quality modular housing are a permanent housing solution. Prefabricated models like the prefabs that were provided for the Ukrainian refugees which were both expensive and poor rating in terms of BER rating C. These modern modular housing are permanent solutions and are extremely energy efficient. By setting up a supply line and manufacturing line you can actually manufacture houses for 12 months of the year every single day of the week. And that is the beauty of it. You can produce one of these homes five times more quickly than producing an on-site house. Now, internationally, I've looked at some of the research and there are obstructions pushed in the way of modular housing. Traditional building companies are slow to adopt the idea of modular housing. It's seen as a threat or a disruption to traditional building supply. And so we do have to look at the provision of modular housing or off-site housing construction in a different light. And I'm going to focus in my last few seconds on the financial aspect of this. In a time where we are under threat from tariffs from Trump, in a time where we need to really be counterintuitive and invest in our economy, especially our indigenous industries and especially where there's a dentifiable need to provide homes, we really need to look at a different relationship between the state, both the Department of Housing, the Department of Education, the OPW, with the modular construction industry. And the financial model is different. It needs to be front-loaded. There has to be cash flow because people are employed on-site on a continuous basis. Thank you. Minister. Thank you again, Deputy. And just to, again, just outline that the government approved new housing targets up to 2030 of 303,000 homes are expected to be delivered in that period from 2025 to 2030. That's equating to an average of approximately 50,500 homes, building up to 60,000 in 2030. To meet those very ambitious targets, it's necessary to utilise many different ways of delivery and modern methods of construction are a key pillar in that housing delivery programme. This year, the Accelerated Social Housing Delivery Programme and the government initiatives described will continue to support the delivery of housing using modern methods of construction. In addition, under the programme for government, further initiatives will also be implemented to support the key pillar which accelerates the delivery of quality housing. And I take on board all your comments in relation to modular as well.