Property sector briefing : March 2016
The First One Hundred Days in Housing
The volume of new homes delivered in 2017 and 2018 will ultimately be determined by
policy decisions made within the first 100 days of the new government.
Every year since 2009, fewer homes have been built than needed. This is the case for the
private rented sector, the owner-occupied sector and the social housing sector. This
sustained undersupply of housing has directly led to the increase in homelessness, rapid
increases in rents, a shortage of student and elderly accommodation and difficulties for
those wishing to purchase a new home as their family circumstances change.
During the lifetime of this government, maintaining Ireland’s recovery will be a significant
challenge. Ireland’s economic growth is predicated on maintaining a competitive economy
which is attractive to foreign investment as well as supporting the domestic economy.
During the last year, businesses and employers have warned of the risks to that
competitiveness, driven by rising costs of living, a lack of accommodation for their growing
workforce and an infrastructure which has been denied investment.
In recent months, the European Commission has warned of the negative consequences of
under-investment in the public capital programme to Ireland’s recovery. Housing is a
strategic part of Ireland’s physical, economic and social infrastructure and must be a priority
for the incoming government.
It is important for Ireland’s competitiveness and social cohesion that housing is affordable,
available across all tenures (i.e. owner-occupied, rented and social) and of high quality.
Property sector briefing
Leadership in housing delivery
The delivery of housing needs to be championed by the Taoiseach as a priority for the
whole of government.
Therefore Property Industry Ireland recommends that within the first 100 days, the
new government does the following:
1. Appoints, for the period of three years, a cabinet level minister with oversight
of housing, infrastructure and planning policy to report directly to the
Taoiseach.
2. Enacts emergency planning and development legislation, for the period of
three years, to fast-track new private and public housing developments
through the planning process.
3. Reviews the tax-base of property to make it sustainable, fair and equitable
across its entire life-cycle, including development levies, local property tax,
stamp duty and VAT.
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Property sector briefing
RECOMMENDATIONS
Cabinet Minister for Housing, Infrastructure and Planning
There are currently over twelve government departments and agencies with a role in setting
and enforcing housing policy in Ireland. They are listed below. Unlike many other countries,
Ireland does not have a dedicated cabinet minister for housing. As a result of this lack of
leadership, the delivery of housing has become simply one of over seventy different policy
remits given to the Department of Environment, Community and Local Government
(DECLG).
(A full list of the current DECLG responsibilities is given as an appendix to this submission.)
Conflict between policies of these agencies has resulted in the slowing down the delivery of
high quality affordable housing; further, a lack of housing and infrastructure, as the European
Commission notes, undermines the delivery of other broader macro-economic and social
policy goals.
Experience from the United Kingdom shows the benefit of the personal engagement of the
prime minister in overcoming blockages to housing policy. In Ireland, similar detailed
personal attention should be given by the Taoiseach, using his unique role to bring
together all policy-makers and acting as a “housing delivery champion.”
The Taoiseach should be supported by a cabinet-level minister with responsibility for
housing, infrastructure and planning to take a co-ordinating role in ensuring that policy in
each agency is aligned to deliver housing output. This does not mean reducing the power or
autonomy of any individual agency, but rather the minister should ensure that the State does
not act as an unnecessary barrier to the delivery of high-quality, affordable housing,
infrastructure or commercial property.
The focus of that minister must be on overcoming barriers within the political process which
are delaying the delivery of new, high quality, affordable housing.
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Property sector briefing
Housing Policy-Makers in Ireland
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Property sector briefing
Emergency Planning Reform
The planning system in Ireland is rigorous but it is also bureaucratic. Property Industry
Ireland recommends that DECLG introduces regulations or a ministerial directive (or
legislation if necessary) to speed the processing of planning applications by planning
authorities so that a grant or refusal of a proposal is given within eight weeks by the planning
authority and by An Bord Pleanála on appeal. This does not mean diluting the criteria for
which permission for development (i.e. planning permission) is granted but is intended to
give certainty to those who are making the application for new housing development.
Pre-planning consultation between planning authorities, project proposers and social
housing bodies is vital in order for new homes – whether intended for private or public
occupation – can proceed onto the construction stage of development. Property Industry
Ireland recommends that standardised Part V (social housing) requirements are produced by
DECLG so that all the social housing requirements of all new housing development projects
are based on the same interpretation of the regulation across all planning authorities.
It is vital that An Bord Pleanála maintains its independence, but that the minister could invite
the chairperson to put in place an internal mechanism to expedite and prioritise the
determination of multi-unit residential schemes.
Similarly, it is essential that planning authorities prioritise the holding of pre-application
discussions with prospective applicants for housing developments. Planning authorities
should be mandated to put in place a checking mechanism to reduce significantly the
national statistics of some 15% of all applications being invalidated at the outset.
Detailed guidance and feedback should be made available to prospective applicants to
facilitate the determination of an application without requests for further information. Such
requests should thereby become the exception, rather than the norm.
The minister should request from the chief executives of the planning authorities for a
programme to address the number of local area plans (LAPs) that have expired and
currently act as a impediment to the development of zoned land.
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Property sector briefing
Review of the Taxation of Property
Houses in Ireland are taxed at numerous points in their life-cycle, including at transaction
(stamp duty), construction (development levies and VAT), and since the introduction of the
Local Property Tax, during occupation. The bulk of the taxes levied on housing take place at
the development stage, with development levies and VAT constituting a large upfront cost to
be borne by the first buyers of new homes.
Property Industry Ireland recommends that government undertakes a complete review of
how and when property is taxed, recognising income to local authorities from the Local
Property Tax, and reducing the development-stage costs. PII also recommends the
reduction of VAT on housing to 9% for a time-limited period. These tax reductions would
make many new housing developments viable; further they would assist in creating a fair,
sustainable and transparent property tax system for the entire life-cycle of a home.
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Property sector briefing
PROPERTY SECTOR ANALYSIS
Homelessness and Social Housing
The structural failure in the Irish model of social housing became apparent as the recession
hit. Ireland simply needs a greater number of new social houses. Buying houses from the
existing housing stock for social housing is simply not a solution.
Keeping people in emergency bed and breakfast accommodation is extremely sub-optimal
and unfair. Not only is it absolutely poor value for money when compared to the delivery of a
new home, it also results in a myriad or longer-term social and health problems which are
never even factored into any cost-benefit analysis of the delivery of new social houses.
It is shocking that in a first-world economy such as ours, that this issue remains so
significant yet seemingly so lacking in sustainable government policy to address it.
Private financing for social housing is available. The debt and equity investment is available
to provide capital to solve this problem. Deliverable solutions have been presented to
government by a number of financial and charitable bodies to harness private financing in
the sector, but they have not been acted upon.
These deliverable solutions build on contractual structures that government is already signed
up to. They deliver off-balance sheet capital that is accessible at scale – immediately. All it
requires is a political champion to break down barriers and insist on joined-up thinking
across government departments to act on proposals already received which could unlock
this potential investment.
Within the existing social housing model, the new minister for housing should insist on a
nationwide standard interpretation of Part V of the Planning and Development Acts 2000 2015 to ensure that all planning authorities work consistently with housing providers,
approved housing bodies, developers and charities to deliver the right type and number of
social houses in the right area at the right time.
Social housing would be the main beneficiary of emergency legislation to ensure the fasttracking of new housing developments through the planning process.
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Property sector briefing
The Private Rented Sector
It is widely accepted that we need to increase the overall stock of housing in Ireland in order
to moderate rents.
That increase can – and should – be spread across a variety of tenures including social
housing, owner-occupation, affordable, and rented.
As the cohort of people renting their accommodation continues to grow, so the volume of
available housing stock must also grow. As house-prices have recovered, the negative
equity in which many landlords found themselves has eroded and many have taken the
opportunity to leave the sector. Work by the PRTB and others suggest that further increases
in house prices will lead to further exodus of landlords. It is likely that the houses they sell
will be purchased by owner-occupiers, further shrinking the stock of available homes for new
tenants.
There is a huge need to attract further private investors into the private rented sector in order
to increase the number of new homes for rent. Attracting investment, and retaining existing
investment, should be seen by government as analogous to attracting foreign direct
investment into any other sector.
Government policy in the fields of personal taxation and property taxation should focus on
making investment in the private rented sector attractive for professional investment over the
long-term.
Government should promote the development of a “build-and-retain” model of multi-family
property development, whereby a developer acts as the financier and developer of new
properties, and once constructed, becomes the landlord of properties which are privately
rented. Such a model has worked well in the USA and Europe in delivering a large volume of
new, purpose-built housing with professional management.
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Property sector briefing
Private, Owner-Occupied Housing
Any policy reform introduced by the new government must be cognisant of the impact of the
macro-prudential lending rules introduced by the Central Bank of Ireland in early-2015. The
Central Bank’s independence is hugely important and it is understood that the Bank will be
undertaking a review of its mortgage lending policy in mid-2016. However, government
needs to be aware of the current uncertainty caused to potential purchasers awaiting
potential reform of mortgage lending restrictions.
From the perspective of government, the Central Bank mortgage rules are already having an
impact on the nature of the type, location and cost of the supply of new housing. The current
loan-to-income rules are putting the purchase of property in Dublin beyond the reach of
many people on modest salaries; they are therefore buying homes outside of the capital,
thus leading to greater urban sprawl and commuting times. As the ESRI has noted,
government’s policy on spatial development, urban density and the location of new
businesses are likely to be hindered by this development.
The loan-to-value rules are also having an impact on home-ownership; as potential homeowners endeavour to raise the necessary deposit for a new home, they are remaining in
rented accommodation for an ever-longer period. This is putting further pressure on the
private rented sector and demand for social housing.
The new minister for housing should undertake an international review of policies which
have been developed to assist first-time buyers with good jobs but limited incomes to
achieve the goal of home-ownership. While PII does not advocate the introduction of grants
to support first-time buyers, government-led initiatives in the UK and some EU and US
States have been successful at supporting first-time buyers to raise the necessary deposit to
secure a mortgage.
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Property sector briefing
Economic Infrastructure
The European Commission has recently noted Ireland’s looming infrastructural deficits,
created as a result of a lack of investment. Investment in infrastructure must be a priority for
the new government.
Traditionally, local authorities have relied on development levies and grants from central
government to fund the delivery of local infrastructure. As the volume of new development
collapsed, so the pressure on central government to fund infrastructure increased. The
alternative has been to burden the first owners of new development with the full cost of the
provision of infrastructure; this simply undermines the viability of new development by adding
ultimately to the purchase price or rent.
In an era when local government now controls income from local property tax, commercial
property rates and development levies, Ireland needs a sustainable infrastructure
development policy. A fund should be delivered, from which local government can borrow on
a competitive basis, to fund site access and other public infrastructure systems which would
unlock potential development land.
The recent development contribution rebate for new housing schemes in Dublin and Cork
will make little impact on housing supply due to the ongoing non-viability of new
development in many areas. A more immediate and effective reform would be to reduce VAT
on new housing to 9% for the lifetime of the next government, or until the supply-demand
mismatch was eased.
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Property sector briefing
Commercial Property for Foreign and Domestic Investment
The demand for commercial property is changing. While retail and business parks suited the
businesses that grew up in the last century, the types of new business on which the Irish
economy will depend have very different needs. Ireland should develop the concept of a
“business park in a building”; promote co-working, hot-desking and start-up incubator space
in buildings that promote the types of clustering which Ireland’s FDI and domestic
businesses need.
Therefore, it is likely that IDA should focus on city centre locations for developing FDI office
space. In regional cities, the IDA is best positioned to fast-track the delivery of offices, and
could underwrite rents in areas where viability of new development is marginal. The types
and locations of property supported in this IDA “backstop” approach should reflect the needs
of the anticipated pipeline of FDI investment and ensure that businesses have the cuttingedge properties they need.
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Property sector briefing
APPENDIX : Policy remit of DECLG
Housing
 Building standards
 Housing policy
 Rental Accommodation Scheme
 Construction products
 Pyrite
 Unfinished housing developments
 Regulation of Approved Housing
Bodies
 Funding & delivery of social
housing
 Action on homelessness
Water
 Water charges
 Water Framework Directive
 Group water schemes and rural
water issues
 Drinking water quality
 Septic tanks
 Private wells
 Water Conservation Grant
 Lead in drinking water
Environment
 National climate change policy
 Noise complaints
 Smoky coal ban / tyres
 Environment Fund
 Local Agenda 21 Environmental
Partnership Fund
 Local Authority Grant Scheme
 Environmental Protection Agency
 Environment Council
 Oireachtas scrutiny of EU
legislation
 Compliance with EU legislation
 Genetically Modified Organisms
 Pollutant Release and Transfer
Registers
 North/South Ministerial Council
 British-Irish Council
 The Circular Economy
 Waste Enforcement Regional Lead
Authorities
Local Government
 Motor Tax
 Voting
 Local Authorities
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Public Libraries
Dog Control
Public Art
Burial Grounds Law
Local Government Income and
Expenditure
Local Property Tax
Financial Reports
Standards in Public Life
National Oversight and Audit
Commission
Local Government Audit Service
Public accountability
Financial audits
Value for Money audits
Community
 Fire and Emergency
 SICAP (2015-2017)
 LEADER 2014 – 2020
 Rural Recreation
 CEDRA
 Rural Charter
 Town and Village Renewal
Scheme
 Scheme to Support National
Organisations
 Social Partnership
 Seniors Alert Scheme
 Social Enterprise
 Dormant Accounts Fund
 Forum on Philanthropy and
Fundraising
 RAPID
 Tidy Towns
Planning
 Myplan.ie
 Development Contribution Rebate
Scheme
 Marine Planning – Foreshore
 National planning framework
 National Spatial Strategy
 Ireland's planning processes
 Ireland's planning structures
 Regional Assemblies
 Development Plans
 An Bord Pleanala review
 Met Éireann
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Property sector briefing
About Property Industry Ireland
Property Industry Ireland (PII) was founded in 2011 as a forum for debate and policy
development amongst businesses operating in the Irish construction and property sectors.
Working as the Ibec sector for the property industry, PII is a member-led representative
organisation which engages regularly with state agencies and policy-makers to drive
innovation in construction, property and the built environment. PII organises a calendar of
briefings, seminars and conferences on issues of relevance to the future of the sector.
Member firms represent the entire spectrum of the sector, including legal, financial and
accountancy practices, property and asset managers, developers and contractors, as well as
professional service providers such as planners, architects, engineers and surveyors.
In 2015, Property Industry Ireland became a sectoral association of Ibec, the leading business
representative organisation in Ireland.
Membership of PII is open to all businesses with an interest in the Irish property and
construction sectors.
Our mission
Through evidence-based research, we inform and influence property strategy in Ireland. Our
mission is to create a sustainable, property industry for the benefit of the people of Ireland.
What we do
We are an independent and inclusive representative organisation for all sectors of the Irish
property industry.
Our aims are to:
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Develop, propose and support national property strategy, policies and solutions to
problems
Create and maintain a central database for the industry that provides an evidencebased foundation for making decisions
Be the go-to organisation for government on all aspects of property
Work with all stakeholders in the industry to restore it to a sustainable position in the
economy
Support job creation and retention of professional industry capacity and skill
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Property sector briefing
PII Council:
Tom Phillips, Tom Phillips + Associates (Chairman)
Aidan O’Hogan, Property Byte Ltd.
Patricia O’Brien, PJ O’Driscoll & Sons, Solicitors
Tony Reddy, Reddy Architecture + Urbanism
Padraic Whelan, Deloitte
Michael O’Flynn, O’Flynn Group
Jim Gallagher, Lafferty
Cormac O’Rourke, Goodbody Stockbrokers
Mark FitzGerald, Sherry FitzGerald
Policy Committee Chairs:
Executive Committee – Michael O’Flynn, O’Flynn Group
Technical and Construction Issues – Jim Gallagher, Lafferty
Planning and Development – Tom Phillips, Tom Phillips + Associates
Funding Initiatives – Michele Connolly, KPMG Corporate Finance
Market Supply and Demand – Ivan Gaine, Sherry FitzGerald
Executive:
Peter Stafford, Director
David Howard, Policy Executive
Recent publications

The Property Industry – Rebuilding Ireland’s Economy (2011)
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Development of Infrastructure Bonds (2011)
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Real Estate Investment Trusts for Ireland (2012)
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Putting the Residential Property Market on a Sustainable Footing (2012)
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Planning a better future: a report on reform of the Irish Planning System (2012)
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Towards a National Property Strategy (2013)
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Delivering Ireland’s Property Needs (2014)
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A National Spatial and Development Plan for Ireland (2014)
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The Cost of Construction in Ireland: A European comparison (2014)
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Investing in Social Housing (2014)
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Housing Manifesto (2015)

Planning a Better Future: Planning legislation reform (2016: forthcoming)
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