Construction Industry Federation in Cork call for urgent action on Cork Housing crisis

CIF Regional Director, Conor O’Connell, has stated that “recent reports from daft.ie that show an increase of 13.5% in rents in a 3 month period, illustrate the growing crisis in the Cork Region in relation to housing supply.”

“Housing is an essential item of infrastructure for society as a whole and for the success of the Cork economy” he continued.

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The construction industry is being hampered in delivering much needed housing infrastructure for Cork by a multitude of problems that have been created over the last number of years, including a lack of development finance, a lack of serviced and zoned land, increased regulatory costs and the dysfunctional planning system. These issues are exacerbated by the fact the first time buyers are finding it increasingly difficult to comply with the Central Bank Regulations.

Conor O’Connell stated that “The issue of costs is one area that can be immediately addressed by the Government to ensure that proposed housing developments can become viable again.  It is estimated that 36% of the cost of any house goes back to the Government in various levies and other forms of taxation.  Costs need to be reduced immediately as this is the one area within the immediate control of the Government.  VAT, development contribution scheme charges, bonds and other charges and levies alone could amount to €50,000 per unit for a standard 3 bed semi-detached house.  Other regulatory cost add to this taxation burden for anyone wishing to commence construction.”

“The Minister’s announcements last week regarding new housing measures contain some welcome principles, but little detail, and a number of measures which will not have the desired impact.  The principle of a rebate for Development Contributions is very welcome; but the proposal that it would apply for schemes in excess of 50 units only is inappropriate.  There are many key sites around the City and County that could comfortably accommodate fewer than 50 homes.  The problem is, these are unviable by virtue of the mismatch between the cost of construction and the spend available to would-be purchasers.”

The review of apartment standards, and the proposed establishment of a national set of guidelines, are most welcome.  Under current arrangements, apartments are simply unviable, and therefore are not being delivered.

“If we are serious about addressing the growing crisis in housing supply, which is having dramatic effects on the rental market, on society as a whole and on inward investment then immediate measures must be introduced to tackle the cost structures within the industry and all the other factors that are limiting the supply of housing.  Residential units can be and will be supplied by the private sector once development restrictions on the industry are addressed.”

www.cif.ie