€10bn needed to ease problems in affordable housing

OVER €10 billion must be invested in social and affordable housing over the next eight years to tackle the problems in this end of the market, a new economic report has recommended.

This money is needed to build 73,000 low-cost houses to close the increasing gap between supply and demand, according to the National Economic and Social Council (NESC).

The State, in partnership with voluntary housing groups and private enterprise, must build the houses at a cost of at least €1.4bn a year up to 2012, the NESC report on Housing in Ireland: Performance and Policy states.

NESC director Rory O’Donnell said this is only one of a range of measures they are recommending to tackle the major affordability and inequality problems in the housing market. Other measures include:

A special saving packages to help first-time buyers get on the housing ladder - this could take the form of the popular SSIAs or provide tax relief on savings.

A tax on second homes because they drive up the cost of homes for first-time buyers and a review of all tax incentives for property investment.

New tax incentive schemes to get builders to provide more affordable rental property, where breaks similar to the Section 23 schemes would be provided along with a guarantee of fixed, low rents.

The NESC report is also recommending a better integration of transport and housing planning. “This is currently a major obstacle to a sufficient number of houses being built because local authorities are reluctant to give planning on density there is not a sufficient transport network to meet the needs,” Mr O’Donnell said.

Cork County Council is an example of how this integrated planning can work because they insisted on the Cork-Midleton railway line being re-opened before they gave the go-ahead for extensive building in East Cork, said Mr O’Donnell.

Taoiseach Bertie Ahern said the report provides thoughtful and well-researched analysis of the housing issues and challenges for the future. He said the Government will carefully consider the conclusions and recommendations of the report, with a number of other proposals in relation to housing.

The Government was awaiting the publication of this report as well as the Goodbody report on allegations of land hoarding before making any final decision on how to tackle the current housing crisis.

A Cabinet decision on this will not be made until the New Year.

Meanwhile, the National Youth Council of Ireland (NYCI) welcomed the report but said the State should give young people a loan to get a house deposit for their first home.

Green Party Housing spokesman Ciaran Cuffe said he was glad the Council believes 73,000 social housing units are needed because the Government is only providing a fraction of that amount.