Policy Forum Ireland Seminar on “Priorities for the housing sector in Ireland”

Speech by Minister of State Damien English TD
at
Policy Forum Ireland Keynote Seminar on
“Priorities for the housing sector in Ireland:
Examining the challenges in social and private

housing following Rebuilding Ireland”

Wednesday 29 March 2017
9am
The future of housing policy in Ireland: implementing the Rebuilding Ireland action plan

Check Against Delivery
Introductory Remarks
I would like to thank the Policy Forum Ireland for inviting me to participate in today’s event.

Housing is a top priority for this Government and getting housing right is a key objective in terms of our future. In particular, we need to increase supply across the spectrum – social, affordable, private, rental and purchase.
   
We have a strong Action Plan in Rebuilding Ireland and Minister Coveney and I are absolutely committed to its effective delivery.

I’m happy to have this opportunity today to outline progress across the five pillars of the Action Plan and future priorities.

Background
It is just over eight months since the launch of Rebuilding Ireland and today we have an opportunity to reflect on some of the things we’ve done thus far, while acknowledging that more needs to be done and is being done.
     
While housing supply is the core problem we face, the Action Plan is not simply about bricks and mortar.
 
The aim has to be to build strong communities, quality properties and to meet the diverse and dynamic housing needs of people more effectively than before.

We need to rethink the manner in which housing is provided and Rebuilding Ireland sets the context for reforming our approaches.  

The public expects us to work together to ensure that affordable, quality and accessible housing across all tenure types is available for all who need it and it is in that spirit that I join you here today.

Indeed, it was through a process of engagement that the Government devised Rebuilding Ireland building on the work of the special Oireachtas Committee on Housing.

I believe that such a partnership approach continues to be critically important during the implementation phase.  
Economic and Construction Industry Outlook
Ireland’s recovery from the sharpest economic contraction in its history is now firmly established.

The ESRI’s latest economic projections forecast a baseline sustainable growth rate for the Irish economy of 3% per annum between now and 2025.

Depending on the final form that BREXIT takes, this baseline scenario may vary upwards or downwards but should remain positive.

With GDP continuing to grow at over 3% per annum and with over two million people in employment, as unemployment has fallen to 6.67%, there is now every reason to be confident about the prospects for further economic growth.
National Planning Framework
You can’t talk about the future of housing without making reference to the new National Planning Framework which is currently being developed as a 20 year strategy for spatial development in Ireland.

We need to plan ahead for a radically different Ireland of 2040 including-

·        A national population increase of around 1 million people;

·        More than one-fifth of Ireland’s total population being over 65;

·        More than 500,000 additional people at work;

·        500,000 homes needing locations much closer to services and amenities; and

·        rebuilding community and commercial life in the hearts of our cities and towns and protecting the many qualities of our rural communities.

The development of a Housing State Land Supply Management Strategy is a critical component of the NPF.

A comprehensive public consultation process was put in place and hundreds of submissions have been received.
The views obtained will help shape a draft NPF which is likely to be submitted to Government in the autumn.
Rebuilding Ireland – Action Plan
Rebuilding Ireland is fundamentally about increasing supply.

Our overall target is to increase total housing output to 25,000 homes per year by 2021, effectively doubling the output of 12,600 homes recorded in 2015 prior to the Rebuilding Ireland.  

Around 15,000 dwellings were completed in 2016 and connected by the ESB to the grid. This is an 18% increase in completions year on year. Of these, 6,289 are in the Greater Dublin Area (4,234 in Dublin) and 8,643 in the rest of the country.

This year we expect output to reach 18,000 homes.

We use ESB connections as an overall proxy for housing completions and have done since the 70’s so it’s an important longitudinal comparator. However, the ESB figures are not the only data we use.

We have detailed information on homelessness, social housing delivery and need and on private planning permissions and construction directly from local authorities and we use these data sources to inform policy.  

Overall, while housing supply is increasing, the mix of supply is still a concern in terms of meeting the broad spectrum of current and future demand, particularly in Dublin and other cities.
For example, of the 15,000 in 2016, 42% were one-off dwellings while only 15% were apartments in our cities, 8% were apartments in Dublin, where the need is greatest and less than 1% were apartments in Cork.

In summary, we are beginning to move in the right direction but the supply shortage continues to put pressure on the entire housing system. The supply mix is still off kilter, with too great a proportion of one off housing and not enough apartments in our cities.

We have published all the data and progress reports on the Rebuilding Ireland website. There are detailed quarterly reports on the website outlining specific progress on each action, under every pillar, including actions under the Strategy for the Rental Sector.

You’ll be glad to hear I won’t bring you through every action this morning just some of the highlights.

Homelessness and Social Housing
Addressing homelessness is a top priority for Government. We have a target on ending the use of hotels and increasing the supply of social housing is the way we are going to achieve this.  

The key focus is to deliver an additional 47,000 social homes by local authorities and approved housing bodies through construction, refurbishment, acquisition and leasing.
Additionally, the Housing Assistance Payment will help us accommodate households in the rental sector.

Last year, nearly 18,400 social housing supports were provided from a housing budget provision of €935 million which was expended in full.  This included nearly 5,300 homes built, refurbished and acquired and some 12,000 Housing Assistance Payment tenancies.
     
A full schedule of the pipeline of social housing projects and a report, setting out the position at end 2016, has been published by the Department last month.  It shows over 500 projects, involving the construction of over 8,400 units, at various stages in the process, and the up-to-date position will be published quarterly.

The Government has put the funding of €5.3 billion and other resources in place and local authorities and Approved Housing Bodies have seriously ramped up their operations and delivery pipeline.  

Building More Homes
Of course we also need more homes for people that don’t qualify for social housing. In terms of the wider housing market the objective is to double housing output to deliver over 25,000 units per annum on average by 2021.

The ambition is that far more of these units will be mixed tenure and available at more affordable prices.
There’s a huge amount of work going on here to help get key large scale sites moving through: providing infrastructure funding, financing and planning reforms.  
 
In many ways this is the central cornerstone pillar of Rebuilding Ireland where the Government is using all the levers available, working with local authorities and builders, to get idle sites delivering affordable, mixed tenure housing at scale.

Mixed Tenure Housing on State Lands
First of all we need to make sure that we deliver housing where the State has most levers.

We are at an advanced stage of mapping over 700 State-owned lands for residential development purposes; this is a vital initial step in the new State Housing Land Management Strategy I mentioned earlier.

The next step is to ensure that there is a strong plan to mobilise the most suitable local authority and State sites.

In this regard, O’Devaney Gardens; Oscar Traenor Road; St. Michaels Estate and Corkagh/Grange are good examples in Dublin.

There are opportunities here for local authorities, landowners and developers to innovate and deliver quality product, at affordable prices and at scale, 3,000 homes in total.
Dublin City and South Dublin County Council are doing just that for these sites supported by my Department.

Overcoming Infrastructural Deficits
The Dublin Housing Supply Taskforce identified infrastructural barriers to housing and in order to get sites moving as quickly as possible.

Rebuilding Ireland has put in place a €226 million Local Infrastructure Housing Activation Fund, better known as LIHAF.

This investment will open up lands to deliver up to 20,000 homes by 2019.  
 
The announcement yesterday of the successful sites means that the necessary planning, design and enabling works will now begin in earnest.

We are taking a joined up policy approach and the Corkagh site in South Dublin will receive LIHAF funding for a road and pumping station that will open up that site for a JV of 1,000 new homes in a great location between the Naas Road and the railway line. This same approach will be repeated across the Country.

Rental Sector Strategy
The Strategy for the Rental Sector, published last December, provides a road map for the development of a badly needed stable, strong and viable rental sector. This will become a real long term choice for people and families.
The Strategy is centred around the the four critical areas of security, supply, standards and services.

The rental sector took the brunt of the unmet demand in recent years and rents increased to unsustainable levels so we needed to help those people and families.

Therefore, a key measure has been the introduction of Rent Pressure Zones, in the four Dublin local authority areas, in Cork city, and in a further 12 designated areas.

This means that rent increases are capped at 4% per annum for the next three years for approximately 55% of tenancies nationally.  

When we examined the rental market, the demand for student accommodation was identified as a particular pressure point.

We therefore targeted the production of purpose-built student accommodation in key urban areas.
 
As I mentioned earlier, there is huge scope for more apartments to be built for the Rental market particularly in our cities and this is a key focus of our attention at present.

I’d be interested in your thoughts on how we can accelerate the delivery of build-to-rent apartment developments in particular.

Utilising Existing Homes
We are also anxious to get the most out of the housing stock we have. In social housing we have targeted this for a number of years now bringing around 7,000 homes back into use over the last 3 years.

More broadly, preliminary results from Census 2016 indicate that there are just under 200,000 vacant dwellings nationwide, representing approximately 10% of the overall national housing stock.

A Vacant Housing Re-Use Strategy being prepared by the Housing Agency, working with the Department and other stakeholders, is well advanced.

One of the things we need to do is understand that 200,000 figure much better and target the real opportunities in places where demand is highest.

In the meantime, we have put in place a variety of schemes aimed at getting thousands of empty homes back into use.

The Repair and Leasing Scheme launched with funding of €140m over 5 years to allow Local Authorities and Approved Housing Bodies to bring up to 3,500 vacant private houses into social housing use by 2021.  

An investment fund of €32m is available in 2017 which will enable 800 vacant properties to be brought back into use as new homes for families on Local Authority waiting lists.
A Buy and Renew Initiative is also being introduced, with €25m in funding for 2017, which will enable local authorities and Approved Housing Bodies to purchase and remediate private housing units for social housing use.  

This will secure 150 homes for social housing purposes in 2017.

Importantly, a lot of the problem vacant units are not houses but commercial properties.  We are therefore looking at how Planning and Building Control arrangements can be adapted to facilitate and streamline the conversion of unused commercial properties into residential units.
 
Budget 2017
The level of ambition evident across the five pillars of the Rebuilding Ireland Action Plan has been fully supported by Budget 2017.  

Increased and additional housing-related current and capital funding streams, are complemented by a comprehensive package of housing market supports.

The tax rebate for first time buyers is proving to be a game changer in stimulating demand for new homes as it assists buyers in meeting their deposit requirements and gives confidence to builders that homes put on the market will sell.
 
All in all, the Government is allocating €1.3 billion to housing programmes this year, a transformational 39% increase over 2016.
 This investment will see the housing needs of over 21,000 households being met in 2017 and the early signs in terms of spend and output are very positive.

Conclusion
In conclusion, we are now very much in the implementation phase of the Rebuilding Ireland programme and people expect to see improved delivery of private, rented and social housing.

All in all, I think the record shows that the Government has a strong and comprehensive plan and that the interventions and actions taken are beginning to work.

I have no doubt that the further actions on LIHAF; Vacant Housing and State land management will also have a major impact. But in housing there is no quick fix and bringing on the increased supply will take time.

Finally, I hope you enjoy the forum and will take the opportunity to network and discuss how we can work together to overcome the housing problems we face and achieve the objectives set out under Rebuilding Ireland.

THANK YOU

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