Land value cap ‘will not cut house prices’
Dublin assistant city manager Brendan Kenny said land prices were not the sole contributor to expensive housing, adding that there were many developments of 300,000, or 500,000, houses where land was bought at low cost.
"It's sheer demand that's making house prices so high. There's still a huge gap between supply and demand," he claimed at the Irish Council for Social Housing conference, in Tralee.
Mr Kenny said we were well behind other European countries in relation to the provision of housing per head of population. A cap on the value of building land would be an obstacle to housing and would only put off developers.
"If we leave things alone for the next two years, the whole situation in relation to price and supply will stabilise. But if there's major intervention, it will slow down activity and we don't want to risk that," he said.
However, Minister for Housing and Urban Renewal Noel Ahern told 350 delegates that the Government was determined to tackle the issue of the cost of development land and affordable housing.
The All-Party Committee on the Constitution had been asked to look at the possibility of a cap on development land and the group's recommendations would be considered by the Government.
"Everything we've done up to now has ended up to the benefit of developers, more than builders.
"It doesn't make sense that a site could be a third, or half, of the value of a house in urban areas of Dublin and Cork. That's just crazy," said
Mr Ahern. He said statistics from other countries showed that land here had become too expensive, in spite of measures in recent years, lower interest rates and taxes and higher disposable incomes.
"We must take measures to ensure the people in the income category that had always bought their own houses can continue to do so.
"Otherwise, the number of people looking for social housing will rocket.
"That will be the price of doing nothing. It makes sense to take steps to help people buy their own houses," said the minister.
One of the main aims of the Government, he emphasised, was to deal with the cost of building land.
He said a Labour Party bill for a cap on prices "just jumps the gun" and was based on a 1970s' proposal that had been looked at several times and discarded by others.
Mr Ahern said the number of houses being build had grown enormously from 21,000 in the early 1990s, to 57,000 last year.
He referred to a European index which showed that Ireland, at 15 new houses per 1,000 population, was well ahead of most other countries, with Sweden being as low was one house per 1,000.
