A housing budget

Budget 2022 has made a series of pointed commitments to underpin and implement the Housing for All strategy and complementing funding provisions made in the recently published National Development Plan. Stephen Purcell of our Future Analytics team inspects the new measures.

Indeed, it is not insignificant that a €20 billion, 5-year investment programme is being deployed (Exchequer, Land Development Agency and Housing Finance Agency provisions) to exact change and tackle the housing crisis in a meaningful manner. There will be nearly 50% greater funding allocated to the Department of Housing, Local Government and Heritage compared to three years ago, such is the enormity of the challenges facing society with respect to the Irish housing crisis.

The proactive delivery of social and affordable housing is central to the Government’s ambitions, with a commitment to support the delivery of some 9,000 new build social housing units in 2022 and, by 2025, an average of 4,000 new affordable purchase homes, together with 2,000 new affordable cost rental homes and 9,500 new build social homes.

Land Development Agency

The Land Development Agency [LDA] is poised to play a central role in delivering on the Government’s housing ambitions.

Under the Housing for All strategy, it was confirmed that the LDA (together with Local Authorities and AHBs) will deliver a significant quantum of Affordable Purchase and “Cost Rental” homes. The Strategy committed to Government increasing the funding available to the LDA so that affordable housing developments can be realised at scale on public lands.

Budget 2022 has confirmed capital housing funding of over €4 billion as indicated in the Housing for All strategy. The LDA, in combination with the Housing Finance Agency, will see €1.5 billion in funding, supplemented with €2.6 billion Exchequer monies. When the current housing funding of €1.4 billion is factored in, the combined result is presented as the largest investment in housing in a single year by any Government.

Zoned Land tax

The introduction of a Zoned Land tax will seek to target land which has the benefit of being zoned for residential or a mix of uses but has remained undeveloped. It will essentially replace the Vacant Site levy, and a 2-year lead-in is proposed for land zoned prior to January 2022, with a 3-year lead-in proposed for land zoned after January 2022. The tax is set to be 3% of the market value of the land which, when compared to the 7% model applied in the current Vacant Site levy, has been met with mixed reaction (the Vacant Site levy was 3% when first introduced). As is the case with such interventions, the ‘devil is in the detail’ and it remains to be seen how factors such as the deliverability of zoned sites (for example based on servicing or other infrastructure constraints) will be reflected. The Vacant Site levy will remain in place in the interim.

Town and village renewal

Town and village renewal is to be supported with a €50 million starter fund to kick-start “Croí Cónaithe”, a novel initiative within the Housing for All strategy which targets potentially “quick wins” by helping to service site and refurbish properties – thus providing a viable opportunity to strengthen the population base in these settlements – and seeking to improve levels of private ownership apartment developments in city centre locations (which typically sees a more efficient use of well located sites by achieving an appropriate density commensurate with the quality of infrastructure, including social, serving such locations). Whether the Living City Initiative and Bringing Back Homes model could be extended beyond the end of next year, thereby providing an established platform to reintroduce occupancy of vacant buildings, remains to be seen, perhaps as a complement to the ambitions of Croí Cónaithe. 

Eradicating homelessness

A range of housing programmes will be supported through Budget 2022. Of course, one of the core priorities within the Housing for All strategy is to end homelessness by 2030. Homeless services will be bolstered with a €194 million allocation in 2022, enhancing efforts to move those experiencing homelessness into secure accommodation and to prevention strategies to eradicate persons falling into homelessness. €676 million has been assigned to supporting a selection of affordability measures, including the aforementioned 4,000+ new affordable purchase and cost rental homes committed to being delivered in 2022.

Strategic planning/Supporting critical infrastructure delivery

Investment in infrastructure and services is a pre-requisite for a thriving economy, and the commitments made across childcare, education and healthcare are welcomed. At a strategic/forward planning scale, it is notable that Budget 2022 confirms that €1.6 billion will be invested in water services in the year ahead, a small but positive step towards upgrading the water network throughout the country, and unlocking capacity for well-located, zoned sites to come forward for development, supplying badly needed housing in a timely manner. By 2025, €6 billion is being invested through Irish Water to strengthen the sustainability of the infrastructure within the national water network.

From a transport planning perspective, there is particular consideration of public transport priorities within the National Development Plan 2021-2030. Ongoing investment commitments are to be supplemented through Budget 2022 such that a combined €3.4 billion will go towards a host of projects. While MetroLink has long been a feature in national transport planning policy and successive statutory development plans for the Dublin Region, the project should move towards an application for consent in the near term, while the widely debated bus network reform project, BusConnects, and the DART+ project all remain committed investments for Government. €1.4 billion has been assigned to enable commencement of major road schemes outlined within the National Development Plan, while monies are also being invested in initiatives like a Youth Travel Card as an intervention seeking to realise modal shift in transport use. Momentum continues to grow with regard to carbon reduction initiatives and support for electric vehicle take-up, although wider infrastructural/network delivery requires concerted efforts and investment going forward.

Get in touch

If you have any queries on the housing and planning measures announced in Budget 2022, please contact Stephen Purcell of our Future Analytics team. We'd be delighted to hear from you.

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