Matt Shanahan warns affordability threatens Housing for All goals
Matt Shanahan criticised the Housing for All Strategy, saying affordability is the principal threat to its targets on social and affordable housing. He pressed the minister on rising build costs, planning delays, rural policy and the calculation used for local authority support.
Main criticism
He told the minister that affordability is now the main issue and the chief headwind to delivering the plan's ambitions, including 90,000 social homes by 2030 and 54,000 affordable homes, arguing that supply pressures and labour shortages risk undermining delivery.
Cost drivers identified
He outlined specific cost pressures - rising supply chain costs, scarcity of skilled labour, higher wages and overheads, developer fees for water and electricity connections, professional services, insurance and finance charges. He highlighted materials pressures for timber, concrete and insulated panels, noting a claim that containers of these materials in Poland can cost up to 30% less than in Ireland. He also highlighted taxes and levies, saying VAT and developer levies can amount to about 25% of a new build cost, and suggested a possible retrospective tax credit for first-time buyers that would not fuel developer price escalation.
Planning, regeneration and CPOs
He urged greater emphasis on town, urban and rural regeneration to bring existing property back into use and asked how planning applications will be fast-tracked. He raised questions about handling objections, incentivising owners of listed buildings to develop, and whether compulsory purchase orders will be used and on what timescale to create new homes.
Rural housing and minimum density
He warned that uncertainty over rural planning guidelines and minimum density rules is affecting local development plans. He argued preferential planning for families building on their own lands should continue and be extended to nieces and nephews to prevent further erosion of rural communities, citing Ballyduff-Upper, Bally-Saggart, Dunhill and Clannay-Parr as examples of villages at risk.
Local authority purchase scheme and cost indexing
He criticised the department's use of a rolling 12-month average build cost to estimate supports for local authorities under the purchase scheme, saying rapid recent price movements—particularly in the southeast—mean councils such as Waterford may struggle to deliver without a second look at that analysis.
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The Minister of the Housing for All Strategy has outlined four main aims to support home ownership and increase affordability, eradicate homelessness, increase social housing delivery and support social inclusion, to increase the new housing supply and to address vacancy and make efficient use of existing stock. Your aspirations within the plan outlined 90,000 social homes by the end of 2030, and an average new-built component of over 9,500 social homes during that time, 54,000 affordable homes between now and 2030, with yearly targets for the provision of affordable housing, and a focus on new bills to provide social homes with the ending of long-term social housing leasing arrangements through the phasing out of new entrants. Beyond these targets, I would ask you, Minister, what are the headwinds to this policy? I believe that affordability is now the main issue and the main danger to your aspirations and to your department aspirations. The rising supply chain costs that may not proceed, and I do not believe they will ever go back to the pre-pandemic levels. The lack of skilled labour and new entrants to the labour market, which is causing a consequent rise in wages and overheads. The significant developer fees in terms of water and electricity connection, and the other build-cost movements that have escalated very quickly, the professional services, insurance, finance interest charges, and the embedded Irish building costs, supply costs, particularly materials of timber, concrete, and insulated panels. You might not be aware, Minister, but if you went and got a container of building materials largely of those three items in Poland, you would pay up to 30% less than our prices in Ireland today. And what about government's take of fees and taxes in the build costs? The figure, including VAT, developer levies and fees, can be up to 25% of a new build cost. Perhaps the department might devise a mechanism where a tax credit might be retrospectively awarded to first-time buyers to assist purchase, but in a time frame that would not lead to developer price escalation. I also outlined to you, Minister, the towns and urban and rural regeneration schemes getting existing property into habitable use, and this should be a primary goal of the policy. But how are we to fast-track planning applications and requirements? How are we going to deal with objections? How should we deal with listed buildings and still incentivise owners to develop? Or is the plan to CPO these properties, and if so, in what time frame will that deliver new home opportunities? In addition, I point out the rural planning guidelines and minimum density guidelines have not been confirmed in terms of the new plan, and local authorities nationally are now drafting their development plans in these areas. We need to see certainty regarding preferential planning to continue for families to avail on building on their own lands, and this should be extended to nieces and nephews, in my opinion. Many rural villages cannot avail of minimum density requirements, and if discretion is not offered in this area, the further erosion of rural communities will continue. I see areas in my own constituency like Ballyduff-Upper, Bally-Saggart, Dunhill, Clannay-Parr. They are not going to have new bills. If we cannot have a certain amount of one-off housing in those, those villages are dying on their feet at present. The local authority purchase scheme also, Minister, I point out to you, where the local authority proposes to take an equity share to be supported by a government affordable housing scheme. I understand that the department is using a rolling 12-month average build cost to estimate the support you will be providing to each local authority. Given the rapid change in building supply costs, I would ask your department officials to take a second look at this analysis, or otherwise authorities such as my own in Waterford will struggle to deliver on this policy, given the rapid recent price movements in the southeast construction sector. Go on. Go on. Go on. Go on. Go on.
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