Our recent survey has highlighted the key issues facing Ireland’s social housing supply. The findings come at a critical juncture, with housing set to be a pivotal issue in the upcoming general election.
Nearly half (48%) of the 250 professionals surveyed believe that planning reform would have the biggest impact on accelerating social housing delivery. The new Planning and Development Act, signed into law in October, could be a crucial step forward.
Janet Cafferky, Built Environment Partner, commented: “Planning delays are stalling crucial housing projects across the country. The new planning laws could be a driver of change, streamlining the approval process and helping projects reach the market faster. With more efficient approvals, and a bridging of the viability gap, housing bodies and developers can work together to meet Ireland’s housing needs at a realistic pace.”
Almost two-thirds (64%) of respondents said balancing viability and affordability is the biggest challenge in social housing development. High construction and financing costs are placing immense pressure on developers to keep projects financially feasible while offering affordable rents.
Karol Fox, Financial Services Partner, said: “Social, affordable and cost rental development continues to face challenges. While the forward fund model eliminates financing costs for developers and the forward sale model assists developers secure upfront financing, without further support, viability remains tough. Addressing this will be critical in helping the sector meet Ireland’s urgent housing demands.”
These innovative financing structures have gained popularity in recent years. In forward fund models, housing bodies acquire sites before construction begins and make stage payments during development. Forward sale arrangements involve purchasing completed units from developers, reducing risk for housing providers.
Karol Fox added: “The Irish Government has introduced numerous initiatives to address cost rental and affordable housing in recent years with over 50% of new housing units in Ireland now benefitting at some point from government funding. However, while these schemes are beneficial, the timing and structure of certain schemes could be adjusted to make them more developer-friendly and increase participation.
For example, with the Secure Tenancy Affordable Rental (STAR) investment scheme and the Crói Cónaithe programme, making funding available earlier in the build process could reduce the financial burden on developers and enhance project viability."
The survey also highlighted the importance of continued investment in the Land Development Agency (LDA) and Approved Housing Bodies (AHBs). Close to six in ten respondents (57%) said this was the most effective means of increasing social housing supply.
Paul Bassett, Built Environment Partner, said: “The LDA and AHBs bring both public funding and industry experience. Their collaborative models reduce exit risks for developers, making large-scale projects more attractive and feasible. Public investment here is key to delivering affordable housing at the scale needed to meet demand.”
He added: "Access to competitive financing rates enables AHBs to undertake larger projects with lower financing costs. This is essential for delivering affordable units to those who need them most.”
Read more about our survey findings on Business Plus or Irish Legal News. For more information and expert advice on any of the topics covered here, please contact a member of our Built Environment team.
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