No money paid out in State house building scheme

A State scheme to incentivise the construction of affordable homes has not paid out a single cent since its announcement in November 2015.

The Development Contribution Rebate Scheme was launched in December that year to stimulate residential construction at affordable prices.

Builders and developers could apply for a refund of development levies if they were building more than 50 units and selling them for less than €300,000 in Dublin and €250,000 in Cork- writes rte.ie

The scheme was limited to Dublin and Cork.

Development levies average between around €8,000 and €12,000 per home, depending on location and type. Developers could apply for a full refund if they sold affordable units in 2016 or 2017,meaning rebates ofon average, €500,000were available

At the time of its announcement by then housing minister Alan Kelly, the Department of Housing said there was a significant number of planning permissions in place for homes in Dublin and Cork, but that construction activity was not taking place.

In a statement, the department confirmed that since the launch in 2015, no payments have been made under the scheme.

It said there remains pending applications for 326 homes.

Architect and housing policy analyst, Mel Reynolds, said if the outstanding applications were successful it would amount to only a few hundred units.

"When this was announced a number of us who had been looking at accurate build outputs realised it was dead in the water. Very few people, if anyone, were building 50 units in any new developments.

"We knew at the start of last year it was having no effect."

Mr Reynolds is critical of the department's approach to the scheme, saying "the boulder is set in motion at the top of the hill and it’s just rolling down and nobody is in control. It is policy for policy's sake, which is most worrying."

The department conceded the take up has been "relatively low".

It added that the development contribution rebate scheme had been "overtaken" by the introduction of the Local Infrastructure Housing Activation Fund (LIHAF), although that is not specifically for affordable homes.

It says that further initiatives in relation to development contributions are being considered.

The Construction Industry Federation said it had lobbied for a reduction in development levies but that the department "didn't understand the market at the time."

Director General Tom Parlon said: "There were very few developments of 50 houses being built. They would have got a big take-up if they hadn't put any limit on the number of units.

"There are a lot of smaller builders around the country that would be anxious to get into the housing market and start building five or six houses. They are the backbone of the house building market."

Mr Parlon said the new, fast-track planning permission system for larger developments had led to a number of builds on the outskirts of Dublin where homes are for sale at in or around €300,000.

"Scale is an important factor," he added.

Read more news of Dublin on our site.

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