Chamber calls for housing crisis action
If the Government doesn’t act immediately, developments like the Cork Docklands Plan will remain a completely unrealistic pipedream.
That’s according to Cork Chamber CEO Conor Healy who said if the Government is serious about the National Planning Framework and Ireland 2040, it must adopt effective measure as soon as possible.
Speaking to the Cork Independent, Mr Healy said there are many examples of other European countries who have faced similar challenges where prompt government intervention has had a positive effect.
“The issue here isn't a lack of ambition; there's significant ambition on behalf of the market to develop apartments. Over the last number of years, approximately 25,000 units have been approved planning permission. However, less than 3,000 of these have been completed,” he said.
Mr Healy’s comments come following the publication of research from Cork Chamber, the Construction Industry Fedaration (CIF) Southern Region and KPMG-Future Analytics which states that tax and funding-based interventions must be put in place to stimulate the development of apartments.
According to the report, if the Cork Docklands Plan, which aims to accommodate 25,000 people and 29,000 jobs, was to go ahead under the current tax environment, it would result in significant financial loss.
“You can't have 25,000 living there if you don't start building accommodation. Unless we have high density apartment development in the docklands, there is no chance we are going to see anywhere that level of population,” he said.
Research commissioned by the Cork Chamber and CIF in 2019 found that the high cost of apartment delivery in Cork city resulted in a sales and rental prices far above what an average buyer or renter would be able to afford.
However, there have been no private, large-scale apartment developments in Cork since 2008 and now Cork Chamber is calling on the Government to act before it’s too late.
“The measures that we are proposing are intended to improve the financial viability of building apartments. There is evidence that these types of measures can and will have an impact. From our perspective it's a win-win,” said Mr Healy.
The recommendations proposed to the Government include reducing VAT on residential construction to five per cent and the creation and implementation of an Urban Housing Investment Fund.
The report also suggests the Government implements a minimum tax depreciation of four per cent per annum for apartment developments.
“We can't afford to wait any longer if we are to see progress. It will take political leadership and strength but the Government has all the tools with which to make change,” concluded Mr Healy.