Call for urgent action to deliver affordable homes in Cork

Chamber CEO Conor Healy said that the cost of building apartments in Cork is so high that people cannot afford to rent or buy them.

Chamber CEO Conor Healy. Picture: Darragh Kane

Cork Chamber has called for urgent and significant Government action to help the private sector to deliver affordable apartments in Cork City.

Without a range of specific and targeted interventions, urban sprawl will continue, it has warned.

Chamber CEO Conor Healy said: “The reality is that the cost of building apartments is so high that people can’t afford to rent or buy them, therefore they cannot be built.

Government must act now, and take significant steps to enable the private sector to deliver."

Mr Healy made his comments following the decision by developer John Cleary to scrap his plans for a 25-storey 200-unit residential tower in Cork’s docklands because it was financially non-viable.

The Chamber said Mr Cleary’s decision confirms the findings in a report it published almost two years ago which warned about the affordability and viability of apartment-building in the city.

The study, which was commissioned by the Chamber and the Construction Industry Federation, found that the total costs of apartment development, including the normal costs of construction, land, profit, and risk, are not sufficient to provide apartments at affordable price levels to satisfy the demand in the local market, while at the same time providing competitive returns to a developer.

It showed that developers have to charge a minimum of €2,500 per month for a two-bed apartment or attach a sales price between €389,000 and €486,000 if apartments are to be viable for rent and owner-occupation.

Last weekend, Mr Cleary confirmed that he has scrapped plans for a residential tower earmarked for the former Sextant pub site after a financial review found that the cost of delivering the project is 15% higher than the anticipated value on completion, making the project unworkable.

The demolition of The Sextant Bar, Cork,  to make way for a 25-storey residential 'build to rent' scheme. Picture: Larry Cummins

The review also found that the rents required to make it financially viable would have had to rise an average of 21% from current levels to as much as €2,800 per month for a two-bed unit. 

Mr Cleary said that was just not sustainable in the Cork market, and he has sought planning from Cork City Council for a 16-storey office block on the site instead.

Mr Healy said while funds such as the Urban Regeneration and Development Fund, announced by the Taoiseach a few months ago, are hugely welcome, they do not impact on planning permissions held today or the numbers of apartments being delivered tomorrow.

“Steps, such as the time-bound removal of Vat for high-density apartment construction in urban areas must be implemented, or our urban spaces will know no new living community," he said.