Developers must accept homes for people on average wage need to be built

It’s time developers realised homes need to be built for people who earn around the average wage, suggests Paul Mills.

I cannot understand why housing planning applications are not flooding the local authority’s’ offices or why housing construction isn’t booming.

It seems to an outsider as if builders have no interest in the works and are looking for reasons they cannot satisfy the demand. Housing is one of the biggest issues for the Government. So what’s going on?

It was reported in this paper this week that the construction industry is warning of another housing bubble.

This warning comes in the middle of a housing shortage crisis up and down the country and an increase in homelessness. So the only thing that can be causing the bubble is the lack of housing.

If there is, a bubble, as long as they catch it on the upside, would be very convenient.

The construction industry also wants to reduce the length of apprenticeships, simpler planning laws, accelerated infrastructure, as well as Vat reductions. It has also asked for a less green space, ideally less than 10%.

These are demands the industry demands repeatedly. The Government has in the past appeased such demands. It makes sense though that there should be a review of apprenticeships given that some of the trades do not need three or four years to be fully trained.

Yes, we need more expeditious planning laws and ones that allow for a rapid resolution of planning objections.

What we do not need is the approach that Government, builders and developers, and the professions took that meant building guidelines and fire safety laws were not correctly applied over the last decade. What we need is more accountability and clear lines of responsibility.

Unfortunately, any reduction in the Vat rate, alongside the existing Government financial incentives to home buyers, only lead to higher house prices and increased profits for developers.

The issue of the profitability of building homes was brought to our attention by a report prepared for the Department of Housing.

The builders say they need a margin of between 10% and 12% to be viable. Most companies would kill to have that margin.

The report said builders could not make money in building affordable apartments on sale prices of up to €320,000.

It’s time developers realised homes need to be built for people who earn around the average wage.

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