37 minute read
Fingal County Council: Energy efficiency in social housing
Making social housing stock more energy efficient and cost effective for Fingal residents
After nearly two years of upheaval in the world had seemingly come to an end, no one could have predicted that 2022 would quickly usher in new economic turmoil and an unpredictable future for many.
War in Ukraine, growing inflation and an energy crisis were taking hold, pushing households from one challenge to another and bringing financial stress and unease as people looked at rising bills, including those from heating their homes.
Among the much-needed packages to help reduce the impact of higher prices being felt announced in the Budget this month, the increased funding to help improve the energy efficiency of more houses across the country is a welcome commitment. Whilst the more immediate short-term measures such as electricity credits and a fuel allowance payment boost will help those in need, it is the desire to seek a solution in the long run which we are especially keen to help progress further, particularly where there is a focus on supporting residential retrofits.
The decision to continue a countrywide retrofitting programme of this magnitude is to be commended. It is a tangible intervention that can help tackle several key underlying problems, including improving the energy efficiency of housing stock. Fingal County Council happily stepped up under last year’s pilot programme which has tapped into the significant level of central funding available that allows local authorities like ourselves to focus on upgrading our stock with energy efficient measures and provide energy efficient heating systems.
Over a four-month period in that first pilot phase, we successfully managed to retrofit the 65 council properties we had been allocated funding for, moving their BER rating to a B2 or higher level. That not only makes them much warmer and healthier for residents, but also helps reduce their energy usage and costs.
Orla Harte, Chief Architectural Technician at Fingal and the project lead on the Retrofit Programme explains: “This is a 10-year programme that will see us upgrade some 25 per cent of our housing stock to a B2 BER standard. As part of that we are carrying out a variety of works to each home in order to achieve that higher rating. Some of these could include triple-glazed windows, LED lighting, rewiring, external doors, PV panels on roofs, installation of heat pumps, an upgrade of external wall and attic insulation, and the upgrade of heating controls. Importantly, this work is all carried out with residents still living in their homes.”
The council teams involved – and our contractors doing the actual retrofitting work – learnt much during the 2021 pilot and this has been helpful as we have gone about delivery of our 2022 targets. Whilst we had been allocated funding for retrofitting 81 homes, given the nature of the approach we have taken we have managed to complete in the region of 100 properties. With the availability of additional funding to progress the rollout further in 2023, we hope to be in a position to carry out energy upgrade works to some 200 homes across the county.
Fingal’s Director of Housing, Robert Burns, says: “The Government’s ongoing commitment to prioritising retrofit works in housing stock means we are able to make some big gains, both environmentally and financially. We are taking a whole-house approach rather than doing this in a piecemeal way, which
allows us to deliver a long-term investment that not only improves the energy efficiency of older homes but also helps residents reduce their energy bills at a time when many are feeling the pinch.
“This really is positive undertaking, and we want to start scaling up significantly moving forward, especially given how the Council’s teams have been able to establish an approach that can smoothly roll out from one allocated site to the next. In doing so, we have worked with tenants, contractors, and project partners in a collaborative way to help remove barriers and achieve meaningful progress as we carried out delivery of the programme. Striving to continuously improve our approach is something which we believe will help streamline the delivery, not only in Fingal, but nationally.”
Along with improving overall comfort levels for households and easing some of the angst when it comes to prioritising what their money goes towards, energy efficiency remains at the core of what we are delivering. That includes making homes less draughty, easier and more efficient to heat, and using renewable technology such as PVs to reduce the strain on existing services.
In the majority of upgrades we have done, that has meant ensuring that heat loss has been addressed. Estimates suggest that in winter a poorly insulated home could potentially lose up to 35 per cent of its internal warmth through the ceilings, another 25 per cent through the walls and up to 20 per cent through the floor and windows. With such a waste of heat from these, insulation and draughtproofing were a clear priority. So, in addition to the installation of low-energy loss front doors and triple glazed windows in a large number of homes in our retrofit programme, a great effort was put towards adding insulation. While this can be an expensive task to undertake in existing buildings, we felt that the longterm benefit for households – and ultimately the Council – significantly outweighed any short-term cost.
Where upgrades to the building fabric are a vital – but unseen – measure, it is the more noticeable additions such as roofs with integrated solar panels or air-source heat pumps which many will associate with the retrofit rollout. Heat pumps are now a common sight thanks to legislation around new builds, and as they are a proven technology that work exceptionally well, the economic viability of installing these is unquestionable.
Mayor of Fingal, Howard Mahony, believes what has been achieved recently is a positive step forward and hopes that the programme can kick-on. He says: “Transforming public housing stock so that it is helping reduce emissions is a challenge that Fingal has readily embraced. In doing so, we are not only helping improve the environment, but also helping residents across the county to save money at a time when there is a spike in bills that can sometimes be overwhelming.”
As our retrofit programme continues, there is certainly interest from communities in the county to see when they too may benefit from upgrade effort. Meanwhile, the feedback we have had from residents who have had retrofits is encouraging, with a feel-good factor on the environment being reported, electricity usage dropping by almost a half in some cases, others welcoming a better quality of life and a general amazement at having a constant supply of hot water.
However, this is the start of a bigger process. The Dublin Energy Masterplan –developed by Codema – has identified that residential properties are the highest source of emissions and if we are to meet the 2050 net zero emissions target, we need to find better ways to work together. Social and economic benefits from the proposals of the Dublin Region Energy Masterplan will be health benefits from an improvement in local air pollution and air quality as well as direct and indirect local employment generated. There will be a reduction in energy bills for residents and businesses, as well as warmer homes, a reduction of fuel poverty and importantly a muchdecreased reliance on fuel imports.
The underlying tenet of a retrofitting programme is a no brainer for us in Fingal, even more so now as the cost of living continues to rise for many of our residents. What is more the programme is also helping us move towards net-zero targets and protect the environment at a time when it is vitally important to do so. We hope that we can now quickly replicate the success we have had thus far, particularly if we can also help streamline the system along the way.
Robert Burns, Director of Housing, Fingal County Council
W: www.fingal.ie
Record homeless figures tell story of a missed opportunity
Having reached over 10,000 for the first time in 2019, the number of homeless people in Ireland was reduced throughout the course of the Covid-19 pandemic, but 2022 has seen a regression, with record high amounts of people accessing emergency accommodation recorded in the consecutive months of July and August.
Having peaked at 10,448 total people accessing emergency accommodation in November 2019 during the pre-Covid era, numbers fell to a low of 7,991 in May 2021 over the course of the pandemic. However, this figure was still higher than any homelessness figure recorded in Ireland prior to June 2017.
Stats for 2022 show a failure to grasp the opportunity that the Covid pandemic had opened up: the chance to fight the record numbers of homelessness that predated the pandemic and ensure that the onceunthinkable figure of 10,000 homeless people in the State once again became unthinkable. The figure was breached again for the first time since the onset of the pandemic in April 2022, when 10,049 people, including 2,944 children, were recorded as having accessed emergency accommodation.
Figures have only worsened since then, rising to 10,325 (including 3,028 children) in May, 10.492 (3,071 children) in June, a record 10,568 (3,137 children), and, again, a record 10,805 (3,220 children) in August. As always with these government figures, it must be remembered that what is being collated here is the number of people accessing emergency accommodation, meaning that the true number of homeless people, when the ‘hidden homeless’ and rough sleepers are factored in, was almost certainly above 11,000 in August 2020.
The data across the months in 2022 where over 10,000 homeless people have been recorded show that the majority of homeless adults are in the 25-44 age group, with 53 per cent of
Total homelessness in Ireland, July 2014-August 2022
12,000
10,000
8,000
6,000
4,000
2,000
0
Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19
Adults Children
Source: Department of Housing, Local Government and Heritage
Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22
the homeless adults in April belonging to that cohort, and 54 per cent in May, June, July, and August also falling within the age bracket. Second was the 45-64 age group, which recorded a 27 per cent proportion of homeless adults in each of these months.
As the year progressed, a miniscule change was recorded in the gender balance of the homeless adults. Having accounted for 65 per cent of the adult homeless population in April, May, and June, males accounted for 64 per cent of homeless adults in July and August.
As expected, the regional balance of the homeless population is heavily skewed towards Dublin. In April, 70.2 per cent of the 7,105 homeless adults and 73.1 per cent of the 1,308 homeless families were recorded in the county; in May, these figures stood at 70.9 per cent of 7,297 adults and 71.2 per cent of 1,366 families; in June, 70.9 per cent of the 7,421 adults were in Dublin, along with 71.5 per cent of the 1,385 homeless families; July saw 70.1 per cent of the 7,431 homeless adults in Dublin and 71.4 per cent of the 1,423 families; and August saw 70.2 per cent of 7,585 homeless adults and 71.9 per cent of 1,483 homeless families in the county. According to the 2022 census, the population of the State is 5,123,536, and the county of Dublin’s is 1,450,701, meaning that a city home to 28.3 per cent of the State’s total population is home to a consistent level of almost three quarters of its homeless population.
6,000
Homeless population breakdown in all 2022 months to record 10,000+ total homeless
5,000
4,000
3,000
2,000
1,000
0
Adult males Adult females Families 18-24 25-44 45-64 65+ In Dublin
April May June July August
Delivering cost rental and Project Tosaigh
Minister for Housing, Local Government and Heritage Darragh O’Brien TD; Tim Lucey, Chief Executive, Cork County Council; Phelim O’Neill, LDA; and John O’Flynn, O’Flynn Group, against a backdrop of the building activity at Clonmore, Ballyviniter, Mallow, County Cork.
The Land Development Agency (LDA) is a key channel for the development of cost rental housing with a mission to unlock state land and make more efficient use of it to deliver largescale affordable housing projects.
The LDA is currently active on 12 sites around the country and has launched an initiative to work with the private sector (Project Tosaigh) to acquire as yet unbuilt homes for cost rental and affordable purchase to accelerate the short-term delivery of a further 5,000 homes, catalysing their development. supply of new affordable housing is our interaction and collaboration with partners across the public sector. From identifying sites, through to the public consultation, master-planning and development phases, our aims will be achieved with close cooperation with city and county councils, approved housing bodies, the Department of Housing, and the range of state agencies who provide land for much-needed development.
Shanganagh, Shankill, County Dublin
The LDA in partnership with Dún Laoghaire-Rathdown County Council, has commenced construction on the largest public housing scheme in the State in recent years at Shanganagh in Shankill, County Dublin
Shanganagh is an important milestone in progressing Housing for All, delivering on the LDA’s mission to unlock state land to deliver large-scale affordable housing projects around the country.
The first homes will be available by the end of 2024. The homes at Shanganagh will be 100 per cent affordable, with 51 per cent cost rental (306 homes), 15 per cent affordable purchase (91 homes) and 34 per cent social housing (200 homes). The development will offer a mix of accommodation suitable for single people, couples, and families with 99 of the new homes to have three bedrooms.
LDA affordable homes: First affordable purchase scheme
Aside from the development of sites on State-owned land, the LDA is progressing Project Tosaigh, a unique initiative to deliver 5,000 new homes by unlocking land in private ownership that has full planning permission but where delivery has stalled due to financing and other constraints. The process is progressing well, and we are delighted to have just launched our first scheme in partnership with Cork County Council.
Clonmore, Ballyviniter, Mallow, County Cork
The Land Development Agency (LDA) is to make available 95 affordable purchase homes under its Project Tosaigh initiative, through which the Agency expects to source almost 1,000 homes nationwide by year-end as part of its first phase.
The new homes are located in Clonmore, Ballyviniter, Mallow, in a joint project with Cork County Council, which will manage the application process with prospective buyers and the well-known developers the O’Flynn Group.
Prices will start from €260,0001 for three-bed semi-detached houses and €280,0002 for four-bed semi-detached houses, with buyers able to get support for up to 25 per cent of the cost through the Government’s affordable housing fund, under Housing for All. The application process for the first tranche of 38 homes will open on 24 October with 22 of the homes ready to be occupied in 2022 and the balance to be completed in 2023.
Clonmore is located on the northern side of Mallow town centre, within easy walking distance of a wide range of amenities and just 2km from the main N20 Cork to Limerick road. The homes, built by the O’Flynn Group, include a mix of 24 three-bedroom semi-detached houses, 71 four-bedroom semidetached houses with private gardens set in a landscaped family friendly estate.
Peartree Crossing: Image from new draft masterplan proposed for lands at a digital hub in Dublin 8.
Pear Tree Crossing at Digital Hub, Dublin 8
The LDA has taken the lead role for the master planning of these lands in a first, key step in the redevelopment of these key State lands in Dublin City Centre to provide new mixed tenure affordable homes, accommodation for enterprise and commerce combined with amenity, cultural, community and open spaces that would realise tangible, social, economic and community benefits to be integrated into The Liberties.
St Kevin’s, Cork
The Land Development Agency (LDA) was delighted to welcome the Minister for Housing to the site of the former St Kevin’s Hospital in Cork city as enabling works begin. The development will regenerate an unused and derelict piece of State land to deliver much needed social and affordable housing for Cork. We hope to complete the tender process for the appointment of a main contractor by the end of this year, with the first homes available in 2024. Planning permission was approved for the construction of 265 homes, an enterprise centre and crèche facilities at the former St Kevin’s Hospital site in Shanakiel, Cork.
About the LDA
The Land Development Agency (LDA) was created in September 2018 with the purpose of improving the supply of affordable homes for individuals and families through the development of State and other land to deliver long-term sustainable solutions. The LDA has a national focus and is advancing schemes throughout Ireland
The LDA is underpinned by the Land Development Agency Act 2021, which gives us a statutory footing to pursue our goals. The Government has set ambitious targets under Housing For All, and we are pleased to be able to make a contribution to those targets, particularly when it comes to cost-rental as a new form of tenure in the State.
In the medium term the LDA have set its own target of delivering 1,500 homes per year, this will position us as one of the largest housebuilders in the country and the only one of that scale delivering 100 per cent affordable housing.
The LDA has also recently made significant progress on its longer-term pipeline with the submission of four planning applications (Dundrum, Balbriggan, Skerries and Naas) that will, if approved, deliver over 2,300 homes in schemes that will be 100 per cent affordable and social housing.
W: www.lda.ie
Housing: A national or local crisis?
Housing for All was applauded and welcomed by stakeholders as a response to a nation’s housing crisis, but is it really a crisis for all or only those that need housing and those specifically tasked with responding to that need? John Hannigan, CEO of Circle Voluntary Housing Association.
Maybe if we are all asking the same question, maybe, just maybe we can shift through opinion and get to the nub of the issue. So many people suggest that we have a crisis and yet we have so many new homes, for sale, for affordable and social housing, that are being voted against; land not being rezoned to enable the building of new homes and planning permissions lying idle, it is obviously not a national crisis for everyone.
How many appeals or observations are open within An Board Pleanála at this present time? While this is not the question being posed to you, a brief look at the website confirms a large number, a snapshot yes, but each of those appeals or observations is a block on an attempt to build or supply housing in this country, why? Not a simple answer, that much can be conceded, but if the country is facing a national crisis why are so many solutions and their progression being blocked?
Is it a national crisis? There is that question again. To answer a question with a question first, does every area need social and affordable housing? If not then it is not a national crisis, it is a local one; it is my back yard, my community and my crisis, my problem, not a national one. If I come from an affluent area, do I need social or affordable housing in that area to remain in the community I was raised in, or would it be preferable to move further afield so as not to taint that area with my need for housing? Surely my need, my community, should support my need for housing or is that my crisis, my problem and not the community’s, therefore not the nation’s?
I take a walk around my county, my area and I see land everywhere, I see a lot of housing, surely some social and affordable housing too and I acknowledge that each of those is a home to someone who needed it; for that family, their housing crisis was resolved. What about the areas not so affluent? Do these have a need for more social and affordable housing? If there is already a bank of social and affordable housing in this area will the community still want to live in that community, close to family and friends?
If there is land available, should we not build on it or can there be too much social and affordable housing? This is something that I am hearing more and more, “there is already too much (particularly) social housing in that area, we do not need more”. Can this really be the case?
So many questions which beg opinion and reach into the heart of the crisis we are in, but the one question I leave you with is the one I started with, is this a crisis for those who need a home and those tasked to respond or is it a crisis for this nation which needs a unified response?
In my role as CEO for a large Approved Housing Body, I am tasked with providing homes for those in housing need. Circle Voluntary Housing Association has been doing that since 2003. Now, more than ever, I am hearing the “too much social” phrase being used to stop development. Concerns about too many unemployed people in one area, not enough diversity of housing and not enough housing for first-time buyers. The truth is that there will never be too much housing in Ireland. We have an underutilisation of land right across our country, maybe not in Dublin but in nearly every other part of our land. Until we see supply increased by at least double, consistently for the next 10 years, we cannot have too many homes being built, for social, affordable, or first-time buyers.
If this is considered to be a national crisis, and I believe it is, should we not create an all-party process that finds a way of addressing the issues causing the crisis. Unfortunately, it is a complex issue, there is no one solution and the potential solutions have many other unforeseen consequences, but should that stop us at least trying?
It will take five to 10 years for us to work our way out of our current predicament, this is not good enough for the mother, father and their children living in the one room in the bed and breakfast allocated by the relevant local authority (where they may have been for five years already), or the individual person trying to exit rough sleeping and homelessness, or the Garda or nurse or trainee doctor or teacher (all of whom earn less than the highest threshold for social housing) who want to live in their own community or just find a house to call their home.
My call is for all those involved in finding solutions for the national and local housing crisis, to come together and to work to shorten this time in the name of the citizens of Ireland. Put aside party, ideological differences and work to change how we approach this very serious human disaster that we are in.
T: 01 4072110 E: developmentteam@circlevha.ie W: www.circlevha.ie
2023 mooted as right to housing referendum date
Minister for Housing, Local Government and Heritage Darragh O’Brien TD has indicated that a referendum on a constitutional right to housing could be held in the early part of 2023.
O’Brien, who it was confirmed will retain his cabinet role in the upcoming December reshuffle, has been attempting a number of initiatives to curtail the housing crisis, including Housing for All and the establishment of the Housing Commission.
Article eight of the European Convention of Human Rights states that “everyone has the right to respect for his private and family life, his home and his correspondence”. This argument has been used by those in favour of constitutional reform to argue that the non-provision of housing is in contrast to the European values to which Ireland holds itself.
The Articles between 40 and 44 enshrine constitutional rights to the citizens of the State, which cover civil liberties such as freedom of expression, freedom of association, and freedom of religion. Economic rights are not provided for as a state guarantee in Ireland.
The Taoiseach has stated that government intervention on rent prices would be unconstitutional, but a constitutional right to housing would invariably involve a level of state intervention in the housing market, whether these are publicly owned or with price caps on rents. Additionally, during the Covid-19 level five restrictions, the Government banned tenancy evictions and has banned evictions again until April.
The Irish Council for Human Rights argues that the “unconstitutional” argument of which the Taoiseach, among others, has made is disproven by the nature of a provision within Article 42, which obliges the Government to “supply the place” of parents who cannot or will not look after their children. In other words, the State already possesses the power to provide housing for citizens as long as they are children.
The Housing Commission, established earlier this year, includes a subcommittee chaired by Ailbhe O’Neill which aims to lay the groundwork for a referendum in 2023. It further completed a public consultation on holding a referendum which closed for submissions on 2 September this year.
The subcommittee meets every month and gathers the opinions and viewpoints of members of the general public, as well as experts in the housing sector.
Home for Good, representing Ireland’s leading homeless charities, published its submission for the proposed constitutional amendment:
1. “The State recognises, and shall vindicate, the right of all persons to have access to adequate housing.”
2. “The State shall, through legislative and other measures, provide for the realisation of this right within its available resources.”
They further state: “The fundamental problem is not that our Constitution sets out strong property rights. The fundamental problem is that the Constitution fails to set out what is meant by the ‘common good’ against which those rights are intended to be balanced and does not expressly protect the right to housing.
“Those in need of housing reform are left to rely on something that has been given no place, no words in the Constitution. It allows our legislators to shy away from doing what is right.
“This is not good enough. This is not what the people of Ireland want. We seek that the necessary words are spelt out clearly and unambiguously.”
There have been numerous attempts in the Dáil to introduce an amendment or piece of legislation which guarantees a right to housing. The latest of these, the 39th Amendment of the Constitution (Right to Housing) Bill 2020, introduced by People Before Profit TD Richard Boyd Barrett, is currently at committee stage in the Dáil.
Sustainability to the fore in new residential developments
Ken MacDonald
Hooke and MacDonald, a market leader in the Irish residential market, state that sustainable real estate is a stand-out feature within today's international real estate industry and that investors and stakeholders are becoming increasingly motivated to acquire properties that have sustainable characteristics, writes Ken MacDonald, Managing Director.
Considering the fact that buildings generate almost 40 per cent of energy consumption globally, with 28 per cent coming from the operations of buildings themselves, most investors around the world are committing to more sustainable practices than previously.
Irish building standards and statutory requirements related to them have been evolving over the last 10 years and this has improved the quality and sustainable characteristics of new residential developments. The housing energy efficiency regulations for new housing that are in force in Ireland are applicable to both new homes and major renovations of existing properties. The European Energy Performance of Buildings Directive (EPBD) introduced new building standards through amendments to Part L of the Building Regulations.
Investor attitudes and demand
Sustainability and the wider ESG agenda are increasingly front and centre of investment considerations and decisions and is a key priority for regulators, policymakers, investors, and asset managers. Many international companies have appointed sustainability managers and sustainability teams to run a wide range of strategies to comply with their ESG policies and investment mandates which will play an internal role in the evolution of ESG within the asset management industry.
The feedback that Hooke and MacDonald have had from fund managers is that many of the institutional funds are putting money aside for ESG only assets. There is more of a mandate to invest in ESG credential buildings or buildings to be refurbished to hit those credentials. Asset owners, such as pension funds, are increasingly demanding sustainable investing strategies from their asset managers and this ultimately forms an important part of investors underwriting and due diligence assessment.
One of the most globally recognised identifiers of green buildings is through LEED Certification (Leadership in Energy and Environmental Design). LEED provides a framework for healthy, highly efficient and cost-saving green buildings. There are different levels of certification, including a basic certification level, then silver, gold, and platinum levels. Some of the features of a building which are analysed include the following:
• building locations away from environmentally sensitive areas;
• access to public transport;
• access to bicycle storage;
• efficient use of energy, water, and other resources;
• use of renewable energy, such as solar energy;
• pollution and waste reduction measures, and facilitation of re-use and recycling;
• use of materials that are non-toxic, ethical, and sustainable;
• consideration of the environment in design, construction, and operation;
• consideration of the quality of life of occupants in design, construction, and operation; and
• a design that enables adaptation to a changing environment.
Economic benefits:
• gain competitive edge;
• attract tenants;
• manage performance;
• meets ESG goals; and
• cost effective.
Health benefits:
• happier occupants;
• healthier spaces with cleaner air;
• indoor environmental quality;
• reduce pollution;
• reduce energy and carbon emissions; and
• it is worth noting that LEED certification dominates BREEAM certification in markets globally, except for in Britain.
From Hooke and MacDonald’s experience of managing over 3,000 apartments and houses for institutional investors there is an increasing focus on being able to monitor and report on sustainability and ESG performance over the life of the assets. The GRESB approach is being sought after by a number of investors at this stage.
Sustainability and the Irish market
The Irish development community has evolved very positively in terms of sustainable development and the newer buildings being produced are of a very high quality, with a strong focus on energy efficiency and promoting sustainable usage of utilities. This approach is from developers and also their architects and other design team members, who are very focused on sustainable development, and they are ensuring that these traits are being designed into new schemes.
Purchasers of houses and apartments in Ireland, are becoming more cognisant of the sustainable characteristics and energy efficiency. Buyers’ perception of sustainability has rapidly moved away from just the cost saving on their heating but towards the overall quality of their living environment. This can be seen across all consumer groups, with first time buyers who are generally younger, reviewing the savings they will achieve over the course of their mortgage based on a more sustainable build, while in comparison the older population may factor in the health benefits such as the air quality aiding the reduction of respiratory conditions which can be caused by dampness in older homes.
The future
The demand for efficient buildings is growing exponentially. With financial, environmental, and social incentives in place the built environment will continue to transform. The following trends are being seen in some markets:
• investor shift towards energy efficiency and emissions regulation accelerating; • margin discounts offered by active green lenders accretive to overall fund performance;
• green buildings being able to exhibit lower systematic risk through more stable income; and
• potential for yield compression and increased asset liquidity.
Material sustainability issues are becoming increasingly relevant in the future in terms of capital values and liquidity. When buying a property today that is designed, delivered, operated, and monitored to the highest standards then you can have confidence that if you ever go to sell that property or have it valued you will be in a good position; and it will perform better than a property that does not have sustainable characteristics as an intrinsic part of its nature.
Dealing with purchasers, including investors, over recent months and from research internationally, Hooke and MacDonald have found that there is an increasing appetite for properties that can illustrate sustainability and ESG as a high priority. The Irish construction industry is very well positioned in terms of developing sustainable buildings and having a focus on energy efficiency and is actively embracing the concept.
T: 086 256 3851 E: ken@hmd.ie W: www.hmd.ie
A study by the Economic Social Research Institute (ESRI) has found that homeownership for people aged 25-34 has declined from 60 per cent to under 30 per cent between the Celtic Tiger era of 2005 and 2015, and has predicted challenges for the current generation of renters in getting onto the housing ladder.
The report has revealed further challenges for the younger generations as they retire in the future, namely that homeownership has traditionally sheltered pensioners from additional expenses, and that if the ‘renter generation’ remains unable to access homeownership through their lives, then it will rapidly increase the pressure on the pensions system. Ownership traditionally provides a ‘double dividend’ of reduced expenses and lowering housing costs.
The continued requirement to cover housing costs for renters in retirement can be seen as an additional vulnerability in terms of retirement income adequacy in Ireland, over and above the general concern of sufficient pension income.
Additionally, research by the CSO and Eurostat has found that, over the last decade, homeownership levels have been decreasing more rapidly in Ireland than the EU average, although there has been decline throughout the EU, demonstrating that this is not a problem unique to Ireland. The ESRI has, however, found that homes in the State are overvalued by 7 per cent.
Tenure shares Ireland
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
1991 2002 2006
2011 Own Outright Other Renter Local Authority Renter
Source: CSO Census of Population, various years. 2016
Generational divide in homeownership
Homeownership rates are roughly 10 percentage points lower (approximately 80 per cent) for those currently aged 55-64 and 45-54 when compared with current retirees (approximately 90 per cent), the report states that “this differential is unlikely to close substantially for these groups given their position in the lifecycle”.
The report recommends a reform of the pension system (both public and private) outlining the outdated nature of the current system which is geared towards pensioners who have traditionally been able to pay off a mortgage on a bought home. It outlines that, since projections show that homeownership will be lower for future generations, that consideration should be given toward this when it comes to future policy formulation.
It further critiques the Government’s current housing policies as being “uncertain” as to whether it will increase the levels of homeownership in the State, although it does acknowledge “there is certainly time for policies to influence the outcomes of this research from both a housing tenure and income support perspective”.
The report further emphasises the divide in poverty between younger people and older people in the State, and that the nature of the housing model in Ireland means that houses will only continue to become more expensive.
“Given future demographic projections and associated sustainability challenges, it is unlikely the State will also be able to fully carry the cost burden for the challenge of higher housing costs in retirement. Therefore, developing a policy strategy which mixes lifetime incentives to accumulate retirement assets during employment with an adequate safety net is most likely to be required,” the report states.
Given that homeownership declines as generations get younger, and that the population is continuing to grow in the State, it is difficult to envisage where the end to this problem comes from. Housing for All has the stated objective of providing affordable, high quality housing for every citizen in the State.
Whilst building has increased since the implementation of Housing for All, many of these homes have been acquired by wealthy property developers, thus emphasising the generational divide between the renter generation and the older population who have been able to own their own homes.
Ireland lagging behind in the construction of apartment schemes
For years, various experts have held that the answer to housing supply shortages in cities lies with apartment construction. Certainly, where limited space exists, building up instead of out is difficult to argue with, write Paddy Smyth, Partner – Real Estate and Joanna Bannon, Senior Associate – Real Estate at Fieldfisher
In continental Europe, the vast majority of urban populations reside in apartments. Predominant features of European apartments are location, convenience, and amenities. Residents generally have access to amenities such as crèches, playgrounds, gyms, green areas, and car park facilities, all in proximity to shops and public transport.
The SCSI Cost of Apartment Delivery report, published in January 2021, provides figures on the cost of delivering various categories of apartments to the Irish market. The report indicates that apartments are more expensive to develop compared to houses, and that the viability of a project depends on the sale value exceeding the total development cost. In most instances, the cost of building apartments is greater than the market value of a unit attainable by owner-occupiers. The report highlights that the construction of buy-to-rent schemes are more viable than buy-to-sell developments, partially due to reduced amenities for the latter type.
Additional factors influencing unit price include hard building costs driven by structural features of apartments, followed by building regulations and energy rating regulations. The feasibility of such projects also becomes more complex and costly due to the (essential) requirement that multi-unit developments be more heavily regulated than housing developments, as well as the need to secure sufficient levels of funding. There is a pressing need to address these issues which are causing a low output of apartments in Ireland to the owner-occupier market.
An introduction to the scheme
On 10 May 2022, the Department of Housing, Local Government and Heritage published an outline of the Croí Cónaithe (Cities) Scheme. The scheme, seen as necessary under the Government’s Housing for All plan, is a fund which aims to support the construction and sale of apartments to owner-occupiers. The scheme involves use of the funds to bridge the cost of development and bringing to market of each unit, and the market sale price. It is argued it will encourage compact growth in vibrant, liveable cities in addition to reducing vacancy and dereliction.
The Department estimate some 70,000 planning permissions remain uncommenced across Dublin, Cork, Limerick, Galway and Waterford as a direct result of the viability gap. The Scheme will benefit from a €450 million fund earmarked for the Croí Cónaithe (Cities) Scheme and an additional €50 million for Croí Cónaithe (Towns) Scheme, a separate scheme providing grants between €30,000 to €50,000 for refurbishment of derelict properties.
It is proposed that the funding support be payable at the point of final conveyance to the eligible owner-occupier. It is further proposed that the Scheme will be managed and administered by the Housing Agency on behalf of the Department.
Development eligibility
The Department outlines the following criteria for development eligibility:
1. Located within Dublin, Cork,
Limerick, Galway, or Waterford;
2. Four storeys or higher and minimum net density of 35 dwellings per hectare;
3. Close to public transport and amenities;
4. Must be sold to owner-occupiers;
5. Demonstrable viability gap; and
6. Development has full grant of planning approval but must not have commenced construction at time of submission (an exemption for multiphased developments exists).
Should a development meet this criteria, it will be ranked based on date of delivery, quality of development, density and delivery cost per apartment in addition to core services and amenities. Proposals will then be subject to detailed due diligence and an open book assessment to ensure that the funding support provided feeds through in reduced acquisition cost for the ultimate owner-occupier. The requirement of open-book accounting may be challenging for financed developments where the financial details are required by banks to be kept confidential.
Eligibility of purchasers and costs
It is intended that eligible developments will be available openly to any purchaser(s) to live in themselves, or to jointly purchase one of the designated apartments under the scheme with the expressed intention of occupying the apartment as their normal place of residence. The purchaser will be required to provide a statutory declaration to this effect and will only be entitled to one apartment supported by the scheme. Individual unit market prices will be determined following the due diligence process and both delivery costs and market values will be assessed by independent quantity surveyors and valuers appointed by the Housing Agency. While the level of funding will be dependent on the viability gap for each apartment, this will be calculated and fixed closer to the date of delivery. The Government anticipates maximum funding for each apartment to be in the region of €120,000 with exceptions of an additional maximum of 20 per cent in regional cities where market prices result in a larger viability gap.
Conclusion
The scheme is a welcome initiative, providing workable solutions to some of the key barriers currently depressing construction of build-to-sell apartments. It will not only contribute to the increase of the housing supply but will have an important role in shifting society's perception of apartment living. If implemented efficiently it should assist in re-balancing city centre demographics, making them affordable places to live for all sections of society. Good planning and meeting amenity requirements in the proximity of developments will play an important role in winning society's approval and will directly contribute to creating sustainable communities in our urban areas.
T: 01 8280 684 E: joanna.bannon@fieldfisher.com W: www.fieldfisher.com
