Development charges for home building in Cork cut by 50%

Move aims to stimulate growth in home building sector

Development charges on new houses and apartments in Cork City have been slashed by 50% in a bid to stimulate house building.

The charge per square metre has been reduced from €53.10 per square metre to €26.35sqm under a new development contributions scheme adopted by city councillors.

The scheme, which sets out the charges levied on all planning permissions to part-fund the provision of public infrastructure, will see:

• A 50% reduction to support housing supply;
• A reduction of 66% for manufacturing development;
• A reduction of 80% for agricultural developments.

The 50% rate cut applies to houses and apartments, including build-to-rent, but not to student accommodation or extensions to existing developments. It will apply only to developments that have not yet commenced.

The reductions on manufacturing and agricultural developments bring the city’s charges in line with charges which existed in the county, prior to the expansion of the city boundary.

While the move has been welcomed by some of the region’s largest developers, John Cleary Developments  — which has planning for a 25-storey apartment building on the city’s south quays — said the 50% reduction alone won’t be enough to make apartment developments viable in the city centre.

Submissions

Six submissions were made during the public consultation phase on the draft scheme — one from the Construction Industry Federation (CIF) and five on behalf of developers, including the JCD Group, O’Callaghan Properties, DCN Developments, Glenveagh Properties, and O’Flynn Construction.

The CIF welcomed the halving of charges on residential development but flagged concerns about the €9.98sqm charge on residential development within 1km of a railway line, describing it as "contrary to sustainable development initiatives" and "a disincentive to develop along the existing rail corridor".

O’Callaghan Properties asked for an increased reduction in charges in the city centre and docklands area to stimulate growth on brownfield sites but Ms Doherty said the scheme is designed to provide a stimulus for residential development specifically while still retaining the ability of the council to deliver identified infrastructure.

A request from the other three developers that developments in planning or already permitted can also benefit from the proposed rate reductions was ruled out on legal grounds.

Fine Gael councillor Des Cahill said the adoption of the new scheme proves that the council is serious about facilitating house building.

“The city is not going to put any undue cost barriers in the way of development,” he said.

“It’s over now to the government to follow suit. And if the government is serious about the 2040 targets, it should consider applying reduced VAT rates in geographic areas targeted for growth. It has to be considered if we are serious about counterbalancing growth in Dublin.”

It comes just weeks after the State’s planning watchdog, the Office of the Planning Regulator, said the city council needs to ensure that most new development is concentrated in existing built-up areas if ambitious targets for increased population and housing are to be achieved.