War on Ukraine to impact housing but Housing Minister insists Ireland will meet its targets

The war in Ukraine may have an impact on Ireland's ability to meet its housing commitments, the Government has said, although the minister with responsibility insists this year's targets are not in doubt.

The latest quarterly progress report of the Government's Housing For All plan says that while "good progress has been made through the quarter and early indicators are positive", the war in Ukraine could cause problems for homebuilding.

The report notes that there are challenges ahead "with the war in Ukraine leading to a number of risks. On one hand, it has led to significant inflationary pressures, supply chain disruption and instability, all of which pose challenges in delivering the plan. On the other hand, our commitment to welcome those fleeing Ukraine leads to an immediate need for accommodation and a longer-term requirement for additional housing.

The report states that: "Planning is also underway to ensure that more suitable accommodation is provided in the medium to longer term, with a cross-sectoral and cross-departmental housing taskforce having been established to address this issue. A range of solutions are being evaluated, including the expansion and acceleration of measures in Housing for All designed to make optimal use of existing stock. 

Solutions based on the construction of modular homes, at pace, on specific State lands are also under consideration. 

"All options are being explored in an effort to meet the emerging need while maintaining our existing commitment to support the provision of social, affordable and private houses for sale and rent."

The report, released this morning, adds that the war "has also exacerbated inflationary pressures, with rising energy and material costs impacting many sectors, including construction, leading to significant overall increases in the cost of building programmes".

"Supply chains have been disrupted, leading to uncertainty in both availability and cost of materials such as steel and timber. Overall, this has introduced a level of uncertainty into the housing market."

However, despite the rising costs, Housing Minister Darragh O'Brien said this year's targets are not in doubt. "It's not in doubt. We have built a very strong pipeline. Last year actually we produced about 1,300 more social homes than we had done in 2020 and that was even in a very difficult year with Covid,” he said, adding that the situation would need to be “watched very carefully”.

“We have to watch this very carefully, of course, and you know, there will be further challenges to delivery. But this year, our pipeline is strong, we're targeting about 9,000 new build social homes, and just around 4000 affordable homes. This isn't going to be easy. No one's no one's suggesting that it is. But thankfully that we we have shown that we've been able to adapt and be agile.”

Housing For All sets a target of 24,600 homes to be built this year and the progress report is bullish on meeting that, pointing out that commencement notices for over 33,000 homes in the 12 months to February were received and almost 43,000 units were granted planning permission in 2021.

Housing For All delays

However, of the 20 actions due for delivery this quarter, just 12 have been fully completed. Among those delayed are the First Home Scheme, the Government's shared-equity home purchase scheme. The much-discussed scheme will see first-time buyers offered up to 20% of the purchase price of a newly built home as an equity stake.

The document says that a company established by the Department of Housing is in discussions with a third party over the administration and day-to-day running of the scheme.

"It is anticipated that the scheme website will go live to begin the communications process in May 2022. It is planned that the scheme will open for formal applications and equity support will be deployed from the fund by end of Q2, 2022."

An overhaul of the differential rents system, which sees local authority tenants pay different rents across the country, has also been delayed. This, the document says, is due to the "emerging cost-of-living challenges in recent months".

Also delayed is the introduction of the Croí Cónaithe (Cities) Fund as well as a plan for state departments and agencies to review the property they hold and place them on the market if they are not required and may be suitable for residential housing and a national rightsizing policy.

 

Credit: Paul Hossford Irish Examiner