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New ‘use it or lose it’ rule to speed up home building

The Government plans to introduce a ‘use it or lose it’ clause to planning permissions to force developers to build new homes.

Local authorities will be given powers to reduce the amount of time allowed to develop new estates if they believe builders are delaying construction works in the hope that prices will rise.

And the Coalition also plans to establish special task forces in Galway, Limerick, Waterford and Cork to identify issues around meeting growing housing demand.

In an interview with the Irish Independent, Housing Minister Paudie Coffey also announced a review of building regulations which require architects or other specialists to certify that houses are built to required standards. The rules are intended to avoid shoddy building across large-scale developments, but anecdotal evidence suggests they are adding up to €6,000 to the cost of a single unit, which affects people self-building their homes.

It comes as the National Housing Construction Index says there was a drop in construction starts after the regulations were introduced in March last year.

Mr Coffey said it was important that individuals should not have to bear enormous costs to comply with regulations which were designed to tackle shoddy works in larger estates, adding that the construction sector was a vital employer in rural areas.

He also said that local authorities have been asked to deal with planning applications as quickly as possible to get construction under way.

This is because despite a demand for 80,000 homes in the main urban areas across the State between now and the end of 2018, supply is not meeting demand, which is fuelling price rises.

Last year, just over 11,000 homes were built, of which almost half were one-off homes. Just under 13,500 homes were granted permission.

The Government plans to take a more focused approach to monitoring planning permissions to ensure construction works get under way in a timely fashion.

Most permissions are typically for five years, although they can be for longer durations for larger estates.

The new rules will require building to take place on a continuous basis, and not be delayed until the market rises.

“There will be a use it or lose it provision for all new planning permissions,” Mr Coffey said. “It’s a mechanism to encourage and create a more interactive approach for planning authorities.

“They can reduce the duration of permission if there is no obvious reason for not delivering. It will allow us to focus on other developments if people are not playing ball.”

The Government has announced a series of changes to planning laws, which are expected to be formally published after Easter, including a requirement that 10pc of all homes in a new development are provided for social housing.

Local authorities will purchase these homes, in effect meaning that 10pc of a new development will be sold before construction begins, which may make providing development finance more attractive to lenders.

Other changes include an annual vacant site tax of 3pc of the value of the land, to prevent land hoarding in areas with populations above 3,000 people, which can rise to 6pc.

“There are a number of key sites identified which are not being developed in Dublin,” Mr Coffey said.

“We are calling in the owners of these sites to see what their plans are, because they (the sites) are critical. What are the problems, why are they not being developed? Are there measures available to assist them?”

The Coalition also plans to reduce development levies where planning permission is in place, but where construction has not yet started.

This is designed to reduce costs for builders, but concerns have been raised by the Dublin Task Force on Housing – on which the regional task forces in Galway, Limerick, Cork and Waterford will be closely modelled – that it will result in the State footing the bill for key pieces of infrastructure, including roads and water schemes.

Mr Coffey said the changes were needed to meet demand and create a sustainable construction sector, while avoiding the “boom or bust” cycle which left thousands in negative equity and unable to move.

“We have a rising demand. Our demographic is rising, and we have a supply issue we need to address. There’s an opportunity as the economy begins to recover and (housing) demand increases to meet this in a sustainable way. It’s not going to be easy because there’s a lot of stakeholders to bring along with us,” he added.