Housing for All progress report

Housing for All ‘on track’ for 2022 targets

With 17,000 new homes having been delivered since the official beginning of the Housing for All programme in September 2021, the Government’s Q2 2022 progress report for the programme states that it is “on track to deliver the 2022 target of 24,600 new homes”, although only 53 per cent of measures due for the quarter were fully delivered.

Of the 213 actions due for implementation under the Housing for All plan, 156 of these have been delivered or progressed, with a total of 30 measures due for delivery in Q2 2022. However, 16 of these, 53 per cent, were delivered on schedule, leaving 14 measures delayed, although the Government notes in its progress report that “significant progress has been made on the majority of these”. This marks a fall in the rate of delivery for the quarter when compared to Q1 2022, when 13 out of 20 measures due for delivery, 60 per cent, were delivered. It must be noted that of the 30 measures due for completion, 12 of these had been carried over from previous quarters in which their implementation was not achieved, with quarters three and four of 2021 having had delivery rates of 91 per cent and 68 per cent respectively.

Among the actions that have been delayed in Q2 2022 are:

• the provision of additional resources to the Residential Tenancies Board (RTB) in order to make trained RTB facilitators available to intervene at the early stages of disputes, initially due in Q2 2022, now revised to Q4 2022;

• the preparation and publication of standards guidelines for the development and refurbishment of emergency accommodation, initially due for Q2 2022, now revised to Q3 2022;

Delivery of Housing for All actions by quarter

Quarter Total actions due Total actions completed or progressed Actions due in quarter Actions completed or progressed in quarter Delivery rate

Q3 2021 213 Not given (plan commenced in Q3 2021) 11 10 91%

Q4 2021

Q1 2022 213

213 123 65

135 20 44 68%

13 60%

Q2 2022 213 156 30 16 53%

• the provision of support to the Dublin Region Homeless Executive to pilot a scheme to convert local authority and AHB-owned emergency accommodation into own-door permanent social housing, initially due for Q2 2022, now revised to Q4 2022;

• the finalisation of a health care model for people experiencing homelessness, initially due for Q2 2022, now revised to Q3 2022;

• legislation for the increase of borrowing capacity of the Housing Finance Agency to €12 billion, initially due for Q2 2022, now revised to Q4 2022; and

• the retrofitting of 2,400 social homes, initially due for Q4 2021, now revised to Q4 2022.

Among the highlights of successful implementation pointed to by the Government is the launch of the €50 million Croí Cónaithe (Towns) Fund that “will support bringing vacant and underused buildings in our towns and villages back into residential use”. The fund will be delivered through local authorities who will provide grant support to those seeking to turn a formerly vacant house or building into a permanent home, “furthering the aim to create town centres that function as viable, vibrant and attractive locations for people to live, work, and visit”. Originally intended for launch in Q4 2021, the scheme will provide grants of up to €30,000 will be available for refurbishment of the building, which will include the conversion of buildings that were not previously used as homes. A further maximum top-up grant of €20,000 will be available for buildings that are derelict.

A further highlight pointed to by government is the establishment of the First Home Shared Equity Scheme, an “affordability measure” that will allow “approximately 8,000 households to bridge an existing affordability gap by providing buyers with part of the purchase price for their home, in return for the scheme taking an equity stake in the purchased home”. The €400 million scheme is being supported by the Government and participating mortgage lenders, with the maximum stake the scheme will take in a given home to be 30 per cent, or 20 per cent if the buyer avails of the Government’s Help to Buy incentive.

Housing delivery

The progress report also includes details of new housing completions, with it said that 17,000 homes have been delivered since the launch of Housing for All in Q3 2021. The plan aims for the delivery of 312,750 homes between 2022 and 2030, an average of 33,000 homes per year. As 2022 is the first year of the plan and Ireland is still recovering from the record low numbers of houses constructed per annum seen in the 2010s, the target for 2022 is a total of 24,600 homes.

To this end, Q1 2022 saw the completion of 5,669 homes, the commencement of 6,977 homes and planning permissions for a further 8,463 homes were granted. The completion figures show a 44.5 per cent increase from the 3,923 homes that were completed in Q1 4

Housing completions by type, per quarter, 2011-2022

2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2

Single house Scheme house Apartment All house types 9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

(Source: CSO)

2021, although this comparison must of course be caveated with mention of the fact that Covid-19 restrictions were still in place in 2021. The figures are also, however, a 15.1 per cent increase on Q1 2020, the last pre-pandemic quarter where construction was unaffected. 1,109 new social homes were among those delivered in Q1 2022, including 639 new builds.

“According to analysis carried out”, the report states that Housing for All’s delivery targets for 2022 “will be met”. While a simple multiplication of Q1 completion data obviously brings up a figure short of 24,600, two things need to be borne in mind: delivery under Housing for All does not only include the provision of new builds, although this is the bulk of delivery, but also the acquisition of existing housing and the provision of it through social housing, and Central Statistics Office (CSO) data shows a clear pre-Covid trend of Q1 recording the lowest completion total of the year. Every year in the period 2013-2019 saw Q1 record the lowest total of completions in its given year, a trend returned to in 2021, although again this must be caveated with the acknowledgment of Covid restrictions in that particular quarter.

CSO data for completions in 2022 differs slightly from the Housing for All progress report, with total new home completions in Q1 2022 recorded as 5,662 rather than 5,669. However, in keeping with government predictions and with the aforementioned trend of the ramping up of construction volume throughout the year, the CSO’s completions data for Q2 2022 shows a total of 7,654 homes, a 35 per cent quarterly increase and a 53 per cent year-on-year increase from Q2 2021.

CSO data also shows an annual increase of 2 per cent in the total number of dwellings granted planning permission in Q2 2022, a total of 11,374 units, comprising of 60 per cent apartments. However, worryingly, the CSO’s Build and Construction Index found output to be down 4.5 per cent in Q2 2022 on a quarterly basis, although it had still increased by 3.2 per cent on an annual basis. The residential building sector recorded a quarterly decline of 2.9 per cent in its seasonally adjusted output, and a 15.2 annual increase.

Housing for All is a plan that seeks to address not only Ireland’s housing provision crisis, but also its housing price crisis, and on that basis the CSO’s data for July 2022 will have made for grim reading for the Government: July 2022 saw the Residential Property Price Index exceed its peak value recorded in April 2007 by 0.8 per cent, with the median price for a residential price recorded at €295,000.

While the Government’s predictions are most likely accurate in that the 2022 targets for Housing for All will be reached, the figures tell the other side of the story: there is much still to be done.

Planning permissions continue to rise but unused permissions a challenge

As Ireland still battles to make up the ground in housing supply after years of underactivity, the number of planning permissions granted rose in Q2 2022, although concern abounds surrounding the estimated 70,000 to 80,000 residential units with permission that have not yet commenced construction.

While Ireland’s planning permission system is often portrayed as cumbersome and a barrier towards the development of the volume of residential units needed to address Ireland’s housing crisis, figures provided by the Government suggest that a more pressing issue is a widespread failure to commence construction on units for which permission has already been granted.

The Government’s Housing Supply Clearing House Measure document, published in June 2022, states that there is an estimated 70,000 to 80,000 residential units with planning permission in the State that have not yet commenced, including 40,000 in Dublin, equivalent to four years of housing supply in the city. A key focus within Housing for All, the document states, is thus “to ensure that these permissions are activated as quickly as possible and this requires tackling barriers to development, including the question of viability which has been observed to be one of the key issues holding up apartment development”. Central to concerns around the development of apartments has been rapidly inflating costs, specifically of materials, that were inflating before Covid-19 and the Russian invasion of Ukraine but have since been exacerbated by both. A study by consultants Mitchell McDermott, published in March 2022, estimated the cost of construction of a mid-range two-bed apartment to now stand at €219,000, rising to €440,000 when all costs are taken into account, a 14 per cent rise since 2020. The report predicted the price to rise by a further 3 per cent, €6,000, in 2022.

Recent figures released by the Department of Housing, Local Government and Heritage showed that 29,343 commencement notices had been received between the beginning of July 2021 and the end of June 2022, a 7.6 per cent increase on the period of July 2020 to June 2021.

The latest planning permissions for dwelling units data released by the Central Statistics Office (CSO) for the second quarter of 2022 also show an increase, albeit a less pronounced one. The number of permissions granted in Q2 2022 (11,374) showed a 2 per cent increase from the same quarter in 2021, although complaints about the difficulty of developing apartments are possibly being borne out in the numbers, with a 5.8 per cent decrease recorded in the apartment permissions approved in Q2 2022, a decrease that is made up for by a 16.6 per cent increase in house permissions.

The accumulated data for the first six months of 2022 show the same trend, with house permissions rising by 32.2 per cent, but apartment permissions falling by 4.7 per cent, meaning a total rise in dwelling permissions of 9.5 per cent. Previous criticisms of Irish housing have centred on an oversupply of houses and undersupply of apartments to suit a population that is now single for longer, living in cities in larger proportions, and having smaller families. For those attempting to address this long-standing issue, these numbers will come as a worry.