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Joint Committee on Housing, Local Government and Heritage debate -
Thursday, 20 Jan 2022

Land Development Agency: Chairman Designate

Today, we are to engage with the chairman designate of the Land Development Agency, LDA. I welcome to today's meeting Mr. Cormac O'Rourke, chairman designate of the LDA, and Mr. John Coleman, chief executive officer of the LDA. The opening statement furnished by the agency has been circulated. Standing Order 96 provides that the committee has the power to require that the chairperson designate of a body or agency under the aegis of a Department shall, prior to his or her appointment, attend before the committee to discuss his or her strategic priorities for the role. Today's meeting will be considered to have discharged that requirement.

Members are reminded of the constitutional requirement that they must be physically present within the confines of the place where the Parliament has chosen to sit, namely, Leinster House, to participate in public meetings. Members attending remotely from within the Leinster House complex are protected by absolute privilege in respect of their contributions to today's meeting. This means they will have an absolute defence against any defamation action for anything they say at the meeting. For witnesses attending remotely, there are some limitations to parliamentary privilege. As such, they may not benefit from the same level of immunity from legal proceedings as a person who is physically present within the Leinster House complex. Members and witnesses are expected not to abuse the privilege they enjoy, and it is my duty as Chair to ensure that this privilege is not abused. Therefore, if their statements are potentially defamatory in respect of an identifiable person or entity, they will be directed to discontinue their remarks, and it is imperative that they comply with any such direction. Members and witnesses are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I thank Mr. O'Rourke for sending his opening statement in advance. I invite him to make his opening statement.

Mr. Cormac O'Rourke

Ba mhaith liom buíochas a ghabháil leis an gcoiste as cuireadh a thabhairt dom tráthnóna inniu. I am honoured to have been nominated as chair of the LDA by the Minister for Housing, Planning and Local Government, Deputy Darragh O'Brien. I thank the Chairman and committee members for their time this afternoon. As requested, I will make a short initial presentation outlining my background and the LDA's future plans. I am joined today by the LDA's chief executive, Mr. John Coleman. We will be happy to answer the committee's questions to the best of our ability.

I grew up in Dublin and was educated in Scoil Lorcáin and Coláiste Eoin. Is gaelscoileanna iad an dá cheann. Más mian le baill an choiste ceisteanna a chur orm as Gaeilge, déanfaidh mé mo dhícheall iad a fhreagairt as Gaeilge. Both of my parents were civil servants. I studied engineering and business in UCD, graduating with a BE in 1980 and a master’s degree in industrial engineering and business in 1985. I joined the ESB from college and worked for five years as a steam and gas turbine engineer. I received training in Switzerland and the UK. I then ran a section that performed economic analysis, efficiency and repair–replace studies on ESB power stations.

In late 1987, I moved to KBC Bank NV's Irish subsidiary. I worked initially in corporate banking and international aircraft finance. In the early 1990s, I was appointed head of KBC's project finance operations in Europe, the Middle East and Africa, with teams in Dublin and Brussels. The team specialised in lending for infrastructure, energy and telecommunications.

In 2000, I returned to ESB International as investment director and worked on major electricity projects in Northern Ireland, Spain and Poland, where the ESB was the investor. I am fortunate to have worked for a major semi-State company that has a highly sophisticated approach to developing infrastructure projects, both in Ireland and abroad, on behalf of its shareholder, the Irish Government.

In 2003, I moved to Goodbody Corporate Finance. Since then, I have spent the majority of my time advising semi-State companies in the infrastructure and energy sectors. I have also been involved in raising finance for those clients, for example, a 30-year bond for Dublin Port to fund its long-term development plans. This is one of the few examples in the public domain. I have also provided advice to several approved housing bodies and other interested parties on social housing.

I had the privilege of being chair of Transport Infrastructure Ireland, TII, and its precursor organisations for nine years. My term in that role finished in November last year.

TII has been a success because it has a very strong and capable management team and impressive work ethic. Above all, it has an extremely strong commitment to public service. I hope that some of TII's approach can be of benefit to the LDA over the coming years. In particular, I regard TII's very strong partnerships with the local authorities as a model to be followed. I am encouraged by the relationships that have developed between the LDA and local authorities to date. The LDA needs to work in close association and partnership with local authorities on larger sites that can yield significant numbers of social, affordable and cost-rental homes in the coming years. The Land Development Agency Act supports this relationship building by seeing the LDA as a service provider to local authorities.

As the committee is aware, it has long been the practice of chairs of semi-State bodies not to comment on Government policy. The committee will understand that I am constrained accordingly in what I can say where this might impinge on Government policy.

The LDA will take a central role in creating large-scale public housing — both cost-rental and affordable-purchase — for qualifying families and individuals. This is clearly laid out in the Act and in the Government's Housing for All strategy. The LDA's working assumption is that cost-rental accommodation will account for approximately 75% of homes built, but this is subject to future discussions with both local authorities and the Government on the housing needs in different areas.

The main focus for the LDA in the coming year will be on delivery. Construction will start on two key sites, Shanganagh, County Dublin, and St. Kevin's, Cork, but it will take some time to be complete. As these and other projects continue, the LDA is progressing with Project Tosaigh, an initiative to activate land with planning permission that is not currently going to construction or is not being delivered quickly enough. The proposal is to accelerate the provision of public housing, both cost rental and affordable purchase, on this private land. The LDA has had strong expressions of interest from the industry with respect to a significant number of affordable houses right across the country. As initial proposals in this project are currently being assessed, it would not be appropriate to comment further on it. Overall, our ambition is to deliver 5,000 affordable homes through Project Tosaigh over the next four years.

Our medium-term plans are to develop ten State-owned sites, which are listed in appendix 1 of our written submission. These sites should deliver approximately 5,200 homes, subject to planning permission and Government approval. The expected mix of housing to be delivered on these sites is approximately 80% apartments and 20% housing.

The LDA and Housing For All have also identified a number of sites that will follow those initial sites, which are also listed.

One of the key roles of the LDA is to act as an active land manager, assembling large-scale strategic areas that can be serviced and delivered coherently over the longer term. This was identified some years ago by the National Economic and Social Council, NESC. This approach has been adopted successfully in a number of other European countries, particularly in Scandinavia. Again, I have listed in my submitted statement the proposed sites for strategic area treatment.

The LDA approach to this activity is to get the agreement of landowners, be they State bodies or private sector, to create master plans for public housing and community services. The agency recently published a master plan for the Colbert Station area of Limerick, for example, and intends to do the same for other areas, including lands earmarked for transfer to the agency in the Government’s Housing For All strategy.

The LDA is currently engaging with the Government on some of the policy drivers of affordability, which include land purchase, taxation and levies. The items that are within the agency’s control include construction margins, financing costs and other fees, which we are also seeking to address. As the committee will be aware, construction costs account for roughly 50% of the total cost of a house or apartment. This in turn is split roughly half and half between labour and materials. A McKinsey study, published in 2017, made clear that construction productivity in the OECD had only increased by 1% a year over the previous 20 years. This is out of line with other sectors of the economy. I believe that the issue of poor productivity in the construction of housing arises from the fact that builders continue to execute a traditional site-based approach. In the medium term the LDA will look to encourage standardisation and modular construction. This should speed up construction, improve quality, provide better working conditions for workers, and generate houses that are more sustainable at lower cost. Construction cost inflation has been a very real phenomenon in recent years. The State, including the LDA, will need strategies to mitigate these risks over time.

It is a matter for the Oireachtas to determine how planning is organised and regulated. From my work at Transport Infrastructure Ireland, TII, I am only too aware of the long delays that public infrastructure has suffered in the planning system for many years. Delays to the granting of planning, whether due to system delays or on foot of judicial review, are not without cost. For example, these delays can deny housing to those who sorely need it. I welcome the Government’s review of planning legislation that is being carried out by the Attorney General.

The LDA legislation has recently partially commenced. The LDA defined activity company, DAC, has been set up. Transferring the work of the agency to the new legal entity is under way. I have commenced discussions with the Department about using the Public Appointments Service to seek additional directors for the agency.

Go raibh maith agaibh as an gcuireadh seo a thabhairt dúinn. Déanfaidh mé féin agus an t-ardfheidhmeannach ár ndícheall bhur gceisteanna a fhreagairt chomh cuimsitheach agus is féidir linn.

I thank Mr. O'Rourke. The witnesses will be aware that the work of the LDA is of great importance and interest to the committee. The committee spent a lot of time on the Land Development Agency Bill last year, and the Affordable Housing Bill, which brings cost rental into legislation for the first time ever. Many of us have worked long on this to see it in legislation. Mr. Coleman had said previously that the LDA would concentrate on cost rental, and I am glad to see that reiterated in the submission to us. It is an area we are keen to discuss during the meeting.

Will now move on to members and the questions they may have.

I confirm to the Chairman that I am attending this meeting from within the confines of Leinster House 2000. Comhghairdeas do Chormac on his illustrious career to date, and also on his appointment as chairman of the LDA. Mr. O'Rourke is very welcome to the committee and it is great that is Mr. John Coleman back again also. Mr. Coleman engaged with our committee last year and helped us in our pre-legislative scrutiny of the Land Development Agency Bill. This is incredibly important legislation for the State.

We have very big ambitions. When I say "we", I do not just talk about us in the Oireachtas committee; the country has huge ambitions for the Land Development Agency to deliver affordable and sustainable homes into the future. The big immediate issue is the supply of affordable homes and the fact that the LDA is going to leverage State-owned lands to reduce costs to deliver real affordability for people. It is very exciting and very important, not just from an economic perspective but, most importantly, from a social perspective.

I have noted the sites listed by Mr. O'Rourke in his opening statement, and they are familiar to us. During the past 22 months of Covid, construction was affected and inflation has risen dramatically. While it is encouraging that there has been a 42% increase reported in house building commencements what we really need is a massive increase in the commencement of affordable homes being built on State-owned land so that we really deliver affordability to people.

Of the 10,000 or so units between State-owned lands and Project Tosaigh that have been mentioned in the appendix to Mr. O'Rourke's statement, I would appreciate if the witnesses could talk to the committee about how these projects will be progressed. I am hoping they will progress in parallel as opposed to sequentially. As we exit Covid I am hoping that the LDA can look at accelerating the delivery of affordable homes in the next years. I appreciate that this is a big ask when we are still in the pandemic but this is where I believe we need to be focusing our attention.

Mr. Cormac O'Rourke

I thank the Senator. It is very much our intention to proceed in parallel. Over the next four years we hope to deliver approximately 3,000 houses on State-owned land and approximately 5,000 under Project Tosaigh. That is the intention. We will also try to progress with some of the bigger-scale master plans. Rather than me trying to recall the briefing, which the chief executive has kindly given to me, perhaps Mr. Coleman would like to add to that.

Mr. John Coleman

I thank Mr. O'Rourke, and I thank the Senator for her question. There is not much more to say to add to what Mr. O'Rourke said. We are progressing everything in parallel. We have organised ourselves and built a staffing infrastructure internally, comprising of mainly property professionals, to drive on with the project management and the development management of the schemes. The active sites are at various stages of advancement, ranging from projects where we have design teams appointed to bring forward planning applications, all the way through to where we are about to get ready to go on site on a number of schemes and we are putting out for procurement to contractors. What all the projects have in common is that they are directed towards direct delivery by the LDA engaging building contractors to build them as social and affordable homes.

With regard to the pipeline sites, the outline there is a slightly longer term but they will continually feed the pipeline. The strategic areas are longer term again, which would have infrastructural channel challenges, but they go to the core of the agency as a land assembly body to bring forward coherent large-scale lands that can be developed over the longer term. We have a good balance between short, medium and longer term pipelines. Project Tosaigh is very important because it accelerates and expands our delivery, and it targets sites that are ready to go but are not being brought forward quickly enough for development. Our ambition there is to bring those sites forward in a way that delivers exclusively affordable housing on them. I hope this addresses the Senator's question.

Go raibh maith agat.

I will move on to the Sinn Féin slot. I call Deputy Ó Broin.

I confirm that I am in Leinster House. First of all, I wish Mr. O'Rourke good luck in his new role. Notwithstanding Sinn Féin's very strong criticisms of both the legislative and policy underpinnings of the LDA, we genuinely wish him very well in the very challenging job that he has ahead. We look forward to working with him. I suspect his chief executive quietly breathed a sigh of relief when he read the section of his remarks on public policy and his adherence to the more traditional approach to not commenting on matters of public policy. His predecessor had a very creative, if not colourful, interpretation of that convention. I suspect it will make board meetings perhaps slightly duller, but possibly more productive. We will wait to see how that goes.

I wish to express one disagreement with Mr. O'Rourke's opening remarks. Planning is not a problem in housing. It is fundamentally different from some of the large and environmentally challenging infrastructure projects that he has dealt with previously. There is active planning permission for over 80,000 residential units passed, approved and ready to go. Many of those permissions are some years old, including through strategic housing development, SHD. While there has been an increase in judicial reviews in the past two years because of the controversial strategic housing development, that is because of bad planning applications, not because of delays in the planning process. Thankfully, the Planning and Development (Amendment) (Large-scale Residential Development) Act 2021 now has timelines on all aspects of the planning process for large-scale residential developments; therefore, it will not be a problem into the future.

A key interest of all of us is how many units the LDA will produce, when it will produce them, and what the price will be to rent or buy. Every time Mr. O'Rourke or Mr. Coleman comes to us, we will want much detailed information on that front. My questions are in that context. Can Mr. O'Rourke or Mr. Coleman give us an update on delivery timelines and prices? First of all, with the two short-term plans in Shanganagh and St. Kevin's, when will homes be delivered, by year and how many? What will be the prices to rent and, in particular, to buy?

On Project Tosaigh, I do not see how the LDA can deliver 5,000 homes over four years if they are not already under construction. Therefore, to deliver that target, the LDA will have to purchase turnkey properties that are already built and therefore be in competition with approved housing bodies, AHBs, local authorities, the Housing Agency under Croí Cónaithe, as well as institutional investors and private buyers. I am not asking for comments on individual applications. Can Mr. O'Rourke or Mr. Coleman give the committee any reassurance that the LDA will not be in the market for turnkey properties and it will be giving genuine additionality? If so, how it will meet that target?

Would they also be willing to give a commitment, with respect of the medium-term plans, to furnish this committee with a quarterly pipeline report? We get similar reports from the Department on its social housing so we can track delivery in terms of projects.

Finally, with respect of active land management, Mr. O'Rourke rightfully referenced the NESC report. Of course, the NESC report recommended very strong compulsory purchase order, CPO, powers. He will know the value of those from much of his previous work. He does not have those currently - he has meagre CPO powers for ransom strips. How will he be able to deliver the crucial active land management function - the thing many of us want him to do - in the absence of having the CPO powers that NESC recommended?

Mr. Cormac O'Rourke

I thank the Deputy for his good wishes. First of all, on the timeline, we would hope to be on-site this year on both Shanganagh and St. Kevin's. I have never seen a site of either scale delivered in less than 24 months. Given the current shortage of certain crafts, it may take a little bit longer.

On price, we are in the middle of evaluating tenders so I cannot answer that question at the moment.

On the Deputy's point on competing with the AHBs, I would absolutely agree with him that if we are in competition with the AHBs, as local authorities we will have failed in our mandate. It is not our intention to compete with them and to compete on turnkey properties. We want to activate sites that are currently not going to construction. As the Deputy knows, the construction of housing is much quicker than the construction of apartments. It can be as little as 18 to 20 weeks in the case of modular construction. Our focus with Project Tosaigh is on additional housing and we are currently looking at how to ensure we are not in competition with that.

We will take away the Deputy's idea for a quarterly report. It is a good idea. Let us see how we can service the committee by providing regular updates and see how appropriate that one is.

I would have learned in my time at TII that CPOs are the last resort. In relation to land acquisition, we will be trying to do it by agreement. Let us try to do that both with local authorities and-----

Can I just cut across Mr. O'Rourke? I agree with Mr. O'Rourke that CPOs should be a last resort. However, surely his previous experience shows that getting agreement is often easier when the threat of CPO is in his back pocket than when he does not have the threat there at all. My argument is not for more CPOs, but to give him that bit of a stick to make the carrot work more efficiently.

Mr. Cormac O'Rourke

It does. However, drawing on the experience in TII, the row was generally not about the principle of whether we could have the land; the row was about the price. If we can agree to the principle of acquisition, putting in place procedures to come to an agreement on price is probably a better place to be than just slapping a CPO on people. Compulsion is probably not the best way to go. We will only know this as we get further into it. Clearly, if it becomes an issue, we will approach the Minister with it.

We will now move to the Fine Gael slot. Who from Fine Gael wishes to take that? I will move to the Green Party's slot. I call Deputy Duffy.

Can the Chair hear me?

Yes, we hear Deputy Duffy loud and clear.

I confirm that I am on the Leinster House campus. Firstly, I congratulate Mr. O'Rourke. I thank him and Mr. Coleman for coming in to brief us today. Their positions in the LDA are extremely important with respect of the delivery of public housing in our country and may the road rise to meet the agency's agenda.

I have a number of questions. It is great to hear up front that cost rental is a priority in the delivery of public homes. Mr. O'Rourke said it is 75% at the minute, which sounds excellent. That is something the Green Party has been fighting for, so I am very happy to hear that. The original projection of the LDA was 150,000 homes. Is that still the target it is aiming for?

My second question relates to the membership of the LDA. I have kind of asked Mr. Coleman this before. The old board's membership did not contain anybody who had a sustainable design or urban design background. That is troubling for me. There are a number of people on it who have a social background, but in the context of urban design, and sustainable urban design at that, is there somebody coming on that?

On the terms of reference of the LDA, will exemplar sustainable urban design measures be implemented? I understand the LDA procured sustainable urban design strategies for Galway from the Royal Institute of the Architects of Ireland, RIAI. Is there any traction with those? Will they be folded into Mr. O'Rourke's vision for the LDA? We have been talking about this as a party, and there is not an exemplar in Ireland of a sustainable urban area. We have Cloughjordan as an ecovillage, but it would be very good if the LDA could procure a sustainable urban site, develop that out and then use it as an example going forward. Are those LDA projects and ideas being moved forward?

Mr. Cormac O'Rourke

The 150,000 target is not achievable in the long term. A realistic target for us is, in terms of direct construction, is perhaps about 2,000 houses per year. That would make us the largest single provider of housing. We can substantially contribute to the kind of target the 150,000 was trying to get at with our larger master-planning whereby we are enabling social housing and other providers.

On the membership of the new body in its new legal form, as the Deputy knows that is really a matter for the Minister in that under the Act he will be appointing new directors once the Public Appointments Service has done its business. I would certainly be in favour of increasing the expertise in both sustainability and urban design. We had the benefit of that kind of input in TII.

On exemplar designs, I will have to pass that over to Mr. Coleman. Before that, I am very much in favour, as I was in TII, of the concept of compact design and 15-minute cities. That is where we need to go with sustainability. People need to be able to live, work and have some of their recreation within a 15-minute cycle or walk. We must break the cycle of cars. Some of my predecessors in TII coined the phrase "getting people out of their cars" in the context of the Luas. It is as relevant today as it was back then.

Perhaps Mr. Coleman will update the committee on exemplar designs.

Mr. John Coleman

As Mr. O'Rourke touched on, sustainability is non-optional. I think everyone is clear on that and it is certainly our view. We have staff dedicated to this broad area. We have an urban design and sustainability manager on our staff who is a current member and former chair of the Royal Institute of the Architects of Ireland sustainability task force. It is something we take very seriously and something we are willing to resource up. At a strategic level we have a number of performance objectives to support sustainable delivery, including the formal adoption of the home performance index, an independently-certified sustainability assessment by the Irish Green Building Council. That is something we use to measure all our developments. We have various other policies we are adopting from a sustainability perspective and that we are embedding into the governance of the agency on an ongoing basis as well. It is a priority for us.

On actual examples and exemplars, I often think about the LDA in two ways, that is, the nearer-term delivery of construction projects and then the longer-term land assembly mandate we have. I will give two examples that can be exemplars for the LDA. The first is our largest development, which we are working on in partnership with Dún Laoghaire-Rathdown County Council, at Shanganagh. It is currently on track to be the largest passive house-standard development in Europe. That is a very significant statement of intent.

On the larger scale, the Deputy may be familiar with a land assembly project we are working on in partnership with CIÉ, Limerick City and County Council and the HSE at Colbert Station, Limerick. It embraces sustainable design principles and pushes a move away from car-oriented transport modes to relying on public transport and other independent modes of transport such as cycling and walking. Again, it is adopting this 15-minute city approach where we have a good life-work proposition where long commutes are not necessary. Thus, that longer-term piece of the LDA's mandate is firmly pointed towards sustainable design principles. Not only is that just nice for me to say, but it is actual policy at the LDA and something embedded into our governance structure.

That is great. I thank Mr. O'Rourke and Mr. Coleman.

I think Deputy Higgins is now back from her Dáil duties so I will go back to the Fine Gael slot. Perhaps she is not online yet. I will move to the Independent slot and Deputy O'Donoghue.

I thank the Chairman and confirm I am in the building. I congratulate Mr. O'Rourke on his new role. I look forward to working with him. I thank Mr. Coleman for attending as well. During Mr. O'Rourke's opening statement, I was listening to his vast knowledge of the different industries he has been involved in throughout his career. He said at the start that he is from Dublin, that he grew up there, that his parents were from Dublin and he mentioned the Civil Service and all the different agencies he has worked with. I will give him my background. I am from County Limerick. My father was a farmer and my mother a farmer and a housewife. I am a building contractor and have been in building since the early 1980s. I have been self-employed for the last 30 years. I was elected a county councillor. I was a councillor for six years representing County Limerick. I am currently a Deputy for Limerick County.

Not one thing the LDA is announcing today has anything to do with the area I represent. I welcome the project at Colbert Station in Limerick. As I said, it is Limerick. However, earlier we talked about sustainability and affordability for everyone, including in Limerick. If we use the 15-minute rule the LDA is adopting it will bring in Adare, Croom and Patrickswell but it takes out Bruff, Newcastle West, Abbeyfeale, Hospital, Knocklong and Kilmallock. I could keep going. It takes out every part of the rest of the county. My job as a Deputy is to build the towns and villages in County Limerick and to make it sustainable so we can have businesses that are sustainable. When the businesses are sustainable we have housing that is sustainable. I have been saying since I was elected that the infrastructure in the counties is not there. Building of houses in the county is stopped by the lack of water and sewerage services. The LDA stands for city projects only. It does not stand for people outside the city unless they are within 15 minutes.

If we look at the geography of Limerick and where the city is based, it is closer to County Clare. We can go to the Mitchelstown border, then on to the County Kerry border and we are bordering County Cork. The 15-minute rule takes out at least two thirds, if not more, of County Limerick, which I represent. I want sustainability and I want investment in the city. However, I want investment in the county as well. Take Newcastle West. There are 3,500 to 4,000 people there and there is no sustainability for them because the LDA is using its 15-minute rule. Croom is excelling. It is within 15 minutes of Limerick. However, when I look at the likes of Bruff, Kilmallock and Hospital and all the way back to Ballylanders and I come all the way across the borders to Hospital, Kilfinane and then across into Dromcolliher, Newcastle West, Abbeyfeale and Glin, there is nothing. There is no investment because all investment and funding is being put into cities.

Not everyone is from the city. I have grown up in the county, I am an employer in the county, I live in the county and my family live and are all employed in the county. Where is the equality in the plan from the LDA to spend outside of city projects? Even in the larger towns, where is the vision for all included in equality, for all counties, not only cities. Will Mr. O'Rourke address some of that please?

Mr. Cormac O'Rourke

I thank the Deputy. As he knows the LDA is a Government entity given a mandate by Government. We are very much policy takers, not policymakers. I agree that infrastructure in rural Ireland in places is significantly deficient. The mandate the LDA has been given is for scale projects on State land and most of that is in the cities.

I do not agree. Much of the State land is within our counties, and in our larger towns and villages there is State land, except that the Government through its councils has been trying to sell off the land so that it shows we do not have as much public land as people are saying. There is adequate land within the counties but there is a lack of infrastructure. I look forward to working with Mr. O'Rourke and I welcome everything he is doing, but with all the vast experience he has, we need to change the policies from the point of view of Government, and it is people like him who, with his experience and although not a policy changer, is a person of great wisdom from the years of experience he has given to Transport Infrastructure Ireland, TII, and all across that, which travels to all the counties. It means we have to change mindsets of people that there is living outside cities. There are large towns such as Newcastle West and Kilmallock and other areas that can become sustainable for agencies such as the LDA to invest in to create sustainability for areas that would be 15 minutes from such towns. For example, in the case of Newcastle West it would bring in towns such as Abbeyfeale. Fifteen minutes from Kilmallock would bring in such places as Hospital, Kilfinane and all those areas. That is where I am looking for sustainability.

I look for the vision of people in the position of the witnesses to bring that message to the Government and show it that there can be sustainable pockets outside the cities where they create hubs into which other areas up to 15 minutes away can feed into. If the infrastructure is created in those large towns, that will benefit the villages, and then there will be the transport infrastructure whereby you can travel between cities and large towns, which gives a full mapping of all our counties. That is what I am asking for: a vision outside of the cities. People like Mr. O'Rourke and Mr. Coleman can give examples of this to Government. I will appreciate any help they can give us in the counties. I understand where they are coming from in terms of their portfolio in the cities.

Mr. Cormac O'Rourke

I look forward to discussing with the Deputy and seeing how we might work with him in the future.

I confirm I am in the Leinster House complex. I wish Mr. O'Rourke well in his new role. In regard to the experience in other countries in terms of compulsory purchase orders, it is very much that it facilitates a speedy negotiation of a fair price. It is an extra tool to do that. I would encourage Mr. O'Rourke to keep that under review and to come back to us on that.

On Project Tosaigh, in regard to Mr. O'Rourke's comments on that, am I to take it that we are talking about projects that are about the delivery of traditional houses and not apartments? If he is talking the speedy delivery through traditional houses, does that include duplexes or what is the situation there?

In regard to cost rental and the working assumption of the 75%, Mr. O'Rourke might explain to us where that working assumption is coming from. I appreciate the need for local input in regard to local housing needs assessments, but how solid is that as a working assumption? Much of what we have been told in recent years about the Land Development Agency has evolved a good deal, so how concrete as an overall working assumption is that?

What is the working assumption in regard to the other 25%? Is it that it will all be social housing or are we looking at affordable purchase as well? Can he rule it out such that there will not be any private, full market price homes? Is that the working assumption on it?

In regard to Project Tosaigh and the 5,000 affordable homes, is the 75% cost rental applied to those or are we talking about affordable purchase in that regard? On the medium-term plans, the 5,200 homes and the breakdown of 80% apartments and 20% traditional housing, is the assumption that cost rental and tenure mix will apply equally across those different types of build? Is there going to be a concentration or a favour towards apartments or whatever? Mr. O'Rourke might let us know about that.

In 2018, and Deputy Duffy referred to this previously, the LDA was talking about 150,000 homes over 20 years. The target is now getting up to 2,000, so that would be 40,000 over 20 years. There is a substantial gap in that. Can we have elaboration on whether the larger number was always about master plans and not direct delivery? Certainly the impression many people took was that it was going to be about direct delivery. Can we have clarification on that? How quickly does Mr. O'Rourke think he can get to that target of 2,000 a year? Does he have a date in mind how quickly he can get to that position?

Mr. Cormac O'Rourke

There is quite a lot to go through there. The cost rental split is based initially on what we see in regard to each of the sites we have in development. It is very much a preliminary number. We will be very much guided by the housing needs assessment of the local authorities. As the Deputy knows, the local authorities are the housing authority within their own areas. We will be looking to them and their housing needs assessments in those areas for guidance as to the appropriate mix of housing types and tenure mix.

What we see for the LDA is very much cost rental and affordable purchase. We do not see a role for ourselves in delivering housing for private sale. That is the mandate as I understand it. As the Deputy alluded to earlier, if Government wants to change that, it can, but that is our mandate as we understand it at the moment. There are clearly caveats and complications to that. The caveat is that some of our sites have Part V obligations. For others of our sites, where we are working very closely with the local authority, there will be substantially more social provision than would be required under Part V. It is not a one-size-fits-all. It is a site-by-site analysis, so we will be working with them. It is fair to say the policy of tenure mix is one we very much support.

In regard to the mix of apartments and houses the issue there is site specific. What is the appropriate mix on any given site?

On the Deputy's question about when we expect to hit a run rate of 2,000, I suspect three to four years' time is our current plan. Back in 2018, at that time the LDA had no staff, no legislation, no plans and no mandate. It is something that has evolved over time.

I very much welcome the fact our mandate is clear and focused entirely on cost rental and affordable purchase.

I ask for clarification here. The general assumption is that the other 25% would be 10% social housing in respect of the Part V obligations and then 15% affordable purchase except where it is a local authority site and the local authority requires higher than 10% social housing. Is that the general approach?

Mr. Cormac O'Rourke

Yes. What we are trying to do is engage with the local authorities who have been doing this since the foundation of the State, for 100 years. The Land Development Agency, LDA, has only come into existence over the past two years. It makes sense for us to engage with local authorities as to the appropriate mix on any site, particularly where it is a local authority site. We have to have a great regard for what a local authority in that case sees as the appropriate mix on that site.

I am going to stay on that theme a little longer by following up on Deputy O’Callaghan’s questions. I also had a concern about what Mr. O’Rourke said in his initial opening statement, that he is engaged with cost rental and affordable purchase and the social aspect is essentially being left to the local authorities. First, the minimum requirement for Part V for local authorities was broader when it came to social provision on private sites. As a State company, which the LDA is, capitalised by the State where the intention is to bring State lands together for the provision of housing, I do not believe it should be looking at the bare minimum when looking at Part V. I am quite concerned about the statements Mr O’Rourke has made in response to Deputy O’Callaghan’s question.

To clarify, Housing for All has affordable purchase and cost rental only. For 2022, this year, it is 4,100 houses, for 2023 it is 5,500, and for 2024 it is 6,400. That is in addition to the social provision of 9,000, 9,100 and 9,300 over the next ten years. The ten sites that the LDA has pulled together equate to 5,500. It seems to me from the very outset there is mismatch between the Government targets included in Housing for All and the mechanisms it is giving to be able to deliver those. Will the LDA confirm that 4,100 of the cost rental and affordable purchase provision will be delivered or even in train this year? If not, where is the other side of that figure to be made up or does the LDA have any indications of that?

I have another question on the land bank database. Of the ten sites listed here, Deputy O’Donoghue makes a very good point that they are all in high-density urban areas. The LDA has created this State land bank. What is going to happen with that database? Is it anticipated that other lands will be added to those ten sites or are discussions ongoing around that?

I will finish on a slightly off-piste point but it is in response to the talk here of the LDA creating sustainable 15-minute cities. While sustainable development has to be at the very heart of what we do, I have a small concern in the talk about the 15-minute city. There are a couple of urban economists, such as Ed Glaeser, who have criticised that concept because it can actually lead to segregation. I ask that the LDA bear that in mind. Creating sustainable communities with housing and infrastructure is very important but it is also important, in particular in cities, that people are not put into silos.

As a follow-up to that, what plans does the LDA have for accompanying infrastructure on the sites it is developing? I will give a particular example of that. Donore Avenue is one of the big sites that the LDA has. A presentation was made to the area yesterday and there is going to be a public meeting on it tomorrow. A couple of things need to be delivered for Donore Avenue. One is going to be a pitch for the local community and there are other things like crèches. The history of these sites and large-scale developments is that often the housing is built, and then whoever develops the housing just walks away. That supporting infrastructure is not there or put in place. I understand the LDA is involved in pulling the land together and is doing the land management aspect of it, but how can we be guaranteed from a local community perspective, when engaging with players such as the LDA and local authorities, that the supporting infrastructure will be put in place? I sometimes feel these promises are made and then the players involved walk away and there is no follow-up to create real sustainable communities in areas of disadvantage.

Mr. Cormac O'Rourke

I will answer the Senator by saying that perhaps I did not make myself as clear as I might have done. If we look at Shanganagh, the social housing component on that is 30%. The Part V element is something we will work on with the local authority. In some cases, like Shanganagh, we are going to try to make the overall provision of public housing more efficient by procuring in a single contract or a number of contracts that are complementary to each other. We are trying to use economies of scale to provide both social and affordable housing.

I go back, however, to the point that the LDA’s role in the long term is on affordable housing and that it does not have a role in social housing except insofar as the Act allows, which is the provision of services to local authorities. The LDA is very much subservient to the local authority in the provision of those social houses. That is a model I am very familiar with from Transport Infrastructure Ireland, TII. The local authority is the road authority and TII is the service provider. I see the LDA's role in exactly the same way. The local authority is the housing authority and is focused on social housing. Our job is for affordable housing.

The land bank database is part of our obligations under the Act. We will keep working on it. Any lands that are transferred to us, we will work on in accordance with the instructions. The benefit of the land bank database is to highlight what lands are in State ownership. That has real merit both as a service to public representatives and to other policymakers where they can bring that to the attention of Government.

On the Housing for All output and affordable homes, it does not envisage that the LDA will deliver all of those. We will grow to a position where we are delivering between a third and a half of the houses. There is affordable house provision envisaged for other entities such as the local authorities, the approved housing bodies, AHBs, and under Part V obligations. The Senator may appreciate I am only reading myself into this so I am by no means an expert and it will take some time.

On the Senator’s point in respect of sustainable housing and 15-minute cities, I would be equally uncomfortable if that was to lead to the kind of segregation she talks about. That is not what we are about. The LDA is about public service and is not about segregation or matters that would be deeply offensive to me personally.

I welcome the chairman designate, Mr. O'Rourke, congratulate him on his new position and wish him the very best as he embarks on his journey to help address the housing deficiency in our country. I note his previous experience and am especially taken by his experience in Transport Infrastructure Ireland, which will be very valuable to him in this role. We all know and agree we need to build homes but it is equally important that we deliver those homes hand in hand with infrastructure. I hope Mr. O'Rourke will bring that experience and insight into his new role.

My first question is on the delivery of 5,000 affordable homes in four years, which has been set out as one of the key goals. The Land Development Agency has identified key sites, some of which already have boots on the ground and others that are in the pipeline. How is the overall project or vision managed, monitored and measured? I am keen for that to be done in a public and transparent way. I would welcome Mr. O'Rourke's views on how output will be looked at. We have different sites. He will report to the Minister and also to this committee regularly. However, if there were a depository, if you like, that members of the public could visit to see how the LDA is progressing on sites and what the status is of different sites, it would be valuable and of interest and would make sure all of us hold the LDA and the Minister to account on the delivery of these much-needed homes.

I have another question on the database of sites, which has also been dealt with by previous speakers. We have all noted the prevalence of certain sites and geographical areas. I am conscious there may be some counties where the LDA will not have a pipeline of affordable homes. I would like to hear Mr. O'Rourke's insight into how that will be rectified. Obviously, the LDA will have a higher level of interest in areas in which there is a higher percentage of affordable output. However, how do we make sure we bring affordability to counties and areas that are not on the current list? The LDA will have first refusal on State lands. How will that work and how will priorities be identified?

My final question is on cost inflation in building. Mr. O'Rourke addressed this in his opening statement, but it is important we get a handle on it. How does the LDA intend to offset inflation in the cost of delivering homes to ensure that cost is absorbed as much as possible and, more importantly, is not transferred on, and that all homes on LDA sites continue to be affordable, despite inflation in the market?

Mr. Cormac O'Rourke

We hope to deliver approximately 3,000 homes on our existing sites and 5,000 homes in Project Tosaigh. That output should be reported. It is an interesting idea and we will certainly look at whether we can provide a public-facing information portal. Our desire is to be as open and transparent as we can. The only caveat I will enter is that we do not want to be in a position where we prejudice the position of the State with regard to commercial matters. However, we will try, as TII did in my time, to be as open and transparent as possible and we will meet as many people as we can reasonably fit in.

With regard to the counties where there is no pipeline, some counties will benefit from working with us, others will not need our assistance and in some counties the scale will be best dealt with in another way. What we are trying to do is build a delivery capability which delivers at scale. That is what we are trying to build our organisation around, which does not always lend itself to smaller scale operations. We cannot be all things to all people. It is something about which I would need to think further.

As I hope I made clear in some of my earlier remarks, we will work as closely as we can with the local authorities because, ultimately, much of the information repository that we need to act effectively exists in them. Would Mr. Coleman like to add anything to that?

Mr. John Coleman

As Mr. O'Rourke outlined, we are trying to concentrate on where we can maximise impact. As we continue to mine and identify sites available for development focused on towns and cities with populations greater than 10,000 people, we can expand our reach over the months and years ahead, once we can find opportunities that deliver on a certain scale. Project Tosaigh, as the process evolves, will also facilitate that flexibility. We will maintain an open mind on that piece.

Mr. Cormac O'Rourke

I have a final point on cost inflation. I wish we could control inflation, but that is certainly well beyond my powers. There are certain things we can do to try to keep costs down in the LDA, which will come about by maximising competition between construction companies. There are also certain other large areas which are not within our control but the control of Government policy. We will look to the Government to work with us and try to help us to drive down the cost of houses. That is something on which we will continue to engage with the Government. It is beyond my scope to comment on Government policy in public, but that does not mean we do not make representations in the background. We do that, and we have some ideas about how it might feed through to reduce cost of housing.

I will move to the second Sinn Féin slot, which Deputy Gould will take.

I wish Mr. O'Rourke all the best and I look forward to working with him. The first point I will make is on the St. Kevin's Hospital site in my constituency. I have been advocating for development on this site for ten years or more and I welcome its development. It is about time because it has been lying idle for decades. I also welcome that housing on the site will be 100% social and affordable, which is very important, because there is a huge need for social and affordable housing in my constituency.

In Mr. O'Rourke's introduction, he did not mention social housing. It look me months of back and forth with the LDA, and of submitting questions and freedom of information requests to find out the breakdown. Is it correct that the breakdown of housing on the St. Kevin's Hospital site will be 90% affordable, with only 10% social? Will Mr. O'Rourke confirm that? With regard to the comments he made earlier about working with local authorities, I would be shocked if Cork County Council only went for 10% social housing on that site, considering the need for social housing in Cork.

Planning permission was granted for the St. Kevin's Hospital site last April. It is now eight months later and the tender for the enabling works is only going out now. Originally, that site was to be completed in 2023. Listening to Mr. O'Rourke, it sounds like, at best, it will be 2024. We have a huge housing crisis in Cork. We need houses and apartments delivered now. I have a few other questions, but I ask Mr. O'Rourke to answer those initial questions first.

Mr. Cormac O'Rourke

I am looking at my data sheet here.

I understand it is slightly more than 10% social on that site. I ask Mr. Coleman to correct me if that is not the case.

The Deputy is correct that tendering for the enabling works is only happening now. We are looking to dovetail that with construction. As the Deputy will appreciate, we are subject to the full rigours of the public spending code, which may be slowing delivery more than it needs to. We are engaging with the Government on the appropriateness of the public spending code, which is more geared towards one-off projects rather than large numbers of projects of a similar nature, to see how we can streamline it. For the moment, we are subject to the full rigours of the public spending code. That is certainly not helping our speed.

Mr. O'Rourke is confirming there will be only 10% social housing on the St. Kevin's Hospital site.

Mr. Cormac O'Rourke

Is ask Mr. Coleman if that figure is correct.

Mr. John Coleman

We can keep an open mind on the final composition of the tenure mix. As the Deputy stated, the site will be 100% social and affordable housing. As the project evolves we can keep talking to Cork City Council. The standing position and requirement is that the site will have 10% social housing with the rest entirely affordable housing but we are open and flexible in our discussions with Cork City Council on its needs. We are talking to the council all the time and we will keep an open mind on the matter.

I am concerned by those comments, to be honest. We are a couple of years into this announcement. Mr. O'Rourke said his job was to deliver affordable units, whether houses or apartments. Do not get me wrong. We need affordable and cost-rental housing but we also need social housing. We need the appropriate mix. We have a major housing crisis in Cork in all these areas. It troubles me that planning permission has been secured for the site but the figure for social housing is only 10% and a decision has not yet been made. The Land Development Agency was to open an office in Cork in November 2020 but the office did not open. Maybe if it had opened, we would not be having these discussions.

Another issue was the number of units that would be universal design, that is, for people with disabilities and limited mobility or older people. How many, if any, board members or staff of the LDA have disabilities?

Mr. Cormac O'Rourke

The board has four external members and the chief executive. None of them, as far as I am aware, has a disability. I do not know about staff. There is a general obligation on us to make our units suitable for people with disabilities, particularly in terms of wider doors, ramp access and so on. I am very conscious of that as something we need to respect.

Will there be a fixed percentage? If the agency is to build 2,000 units annually, what percentage of those will be universal design? Will it have a disability officer working with the agency?

Mr. Cormac O'Rourke

We will have to work with the local authority to find out what the housing needs are in the local area. I am not sure if it is appropriate to set a fixed percentage. We will agree with the local authority what figure fits the housing demand in the area and we will deliver that.

We have statistics for how many people are disabled and are on the social housing list. All these things need to be factored in. The agency is at the early stages with these developments and these decisions need to be taken now. I have one final question.

I ask him to be very brief.

There has been talk of the LDA looking at the old Cork Prison. The Minister has said the building is mothballed but for people living in the Glen in Cork North Central, the site has been left idle. Are there plans for it, perhaps working with Cork City Partnership or Cork City Council, to have mixed tenure housing and a visitor centre or community centre? I know the LDA is looking at it.

Mr. Cormac O'Rourke

I am not aware of it. I ask Mr. Coleman if he is aware of the Cork Prison site and our future plans for it.

Mr. John Coleman

I am aware of the site but we have no immediate plans for it. We will keep it on our radar to see if there is anything that we can do to assist on that.

Deputy McAuliffe will take the second Fianna Fáil slot.

I welcome Mr. Coleman and Mr. O'Rourke. I think this is the first time they have been before the committee since the Land Development Agency Act was passed. It is significant legislation and many members of this committee and Deputies in the Dáil voted against it because they did not want the LDA to be a delivery mechanism. That is a policy difference. We are now in the implementation phase.

I have some questions for Mr. O'Rourke and others related to the LDA more broadly to which Mr. Coleman may wish to respond. Can Mr. O'Rourke confirm that he was appointed in an open competition process? Will he also confirm the salary for the position of chairperson?

Mr. Cormac O'Rourke

If the Deputy is asking whether I applied through the Public Appointments Service, yes, I did. I am not sure what the salary is. I think it is around €30,000 but I cannot recall the exact amount.

I appreciate that. I was not setting a trap but seeking to have on the record the fact that it was an open competition process. It is important for people to know that. One of the benefits of having someone of Mr. O'Rourke's experience is his strong background. However, the chairperson role is not exclusive and he will also have other interests. How does he intend to ensure there is no conflict of interest in his role as chair and other work that he might undertake? Land has a long history in Ireland and it is important know that Mr. O'Rourke is aware of it and he has a way of ensuring there is no conflict.

Mr. Cormac O'Rourke

As everyone knows, Ireland is a small country and conflicts do arise. What is important is how one deals with them. My practice in TII was that conflicts of interest would be the number one item on the agenda at every single board meeting. I understand that is also the case in the LDA. It certainly will be when I am in the chair.

It is important to go beyond that. As I worked with my colleagues in TII over the years, we developed a much more inclusive approach to conflicts. Even when we were discussing matters which did not involve decisions but were general discussions, people would disclose affiliations, friendships or whatever in an open and transparent way so that their colleagues on the board would know where they were coming from and how they might be consciously or unconsciously influenced. I am very conscious of that. I work part-time for Goodbody Corporate Finance. Where Goodbody or one of its clients is involved, I will recuse myself from the discussion. Not only that, I have passed the normal retirement age and the reason I am working part time is to finish off a couple of projects for semi-State companies in the energy sector. Even when I am no longer working for them, I will still recuse myself from projects involving Goodbody and its clients.

I thank Mr. O'Rourke. This is not to cast any aspersions, but-----

Mr. Cormac O'Rourke

It is fine.

-----it is important. Some points were made during the debate and some statements were also made by the Minister. I would appreciate if those types of principles could be recommitted to here by Mr. O'Rourke and Mr. Coleman. The Minister said that in places like Dublin and Cork that land developed by the LDA, and this would differ slightly from local authority land, would be 100% used for public housing, including social and affordable housing. I would like the representatives from the LDA to recommit to that principle here.

There were also accusations that this was a privatisation of public land. I welcome Mr. O'Rourke's statement that it is not the intention to have open market, for-profit sale, and particularly in Dublin and Cork. In addition, another point made was that these lands would be developed by the LDA where it was the client or the developer. It was also said that the LDA was not excluding the possibility of its operating cost rental itself or in conjunction with an AHB. It was also stated that the LDA has no intention to seize or take land from local authorities to develop without the consent of councillors. There is a lot in my contribution, to be fair to Mr. O'Rourke.

Mr. Cormac O'Rourke

There is, and I am not sure I got all those points. I am certainly not going to contradict the Minister in respect of using being 100% in respect of the social and affordable housing aspect. As I said earlier, we will do what the Government asks us to do but our current mandate is for 100% of land to be used for social and affordable housing and I am very comfortable with that. Regarding cost rental, and the operation of that facet of our endeavours, how we will do that is not a matter that has yet come to the board. As a modus operandi, I will be looking again at how TII has done things. The operation of cost rental should either be done by the local authority or by an AHB. I am not sure there is great merit in the LDA duplicating that capability. It would, essentially, involve building a platform from scratch when one already exists in two places. That does not seem to me to be a sensible way of going about things. From that perspective, regarding cost rental, I foresee us working closely with a local authority or an AHB. The AHBs have done a great deal of good work over a long time and they have a great deal of expertise in this area. I know many people in that sector.

Will Mr. O'Rourke comment on a possible forced transfer of land from local authorities to the LDA?

Mr. Cormac O'Rourke

There is not going to be a forced transfer of land. As I mentioned to Deputy Ó Broin when he asked the question, I very much believe in voluntary exchange and that there should not be compulsion. When it comes to local authorities, we must develop a long-term working relationship with all of them. So far, things look very good in that regard. The local authorities are going to be our long-term partners and I do not see us trying to enforce our view on them. I see us working with them and in concert with them, not in opposition to them.

What Mr. O'Rourke has said is the policy of the board. Is that in line with how Mr. Coleman, as the chief executive, will be implementing these aspects in the LDA's operations?

Mr. John Coleman

It is. If I look back on the LDA's short existence to date and at its biggest success, that is, by far, the relationship we have developed with the local authorities. That is with the executive teams of the local authorities, but also with the councillors. The experience has taught me a lesson and been instructive in respect of the potential to maximise those relationships. Both sides bring unique skill sets to the relationship, and it is very much a collaborative one. As Mr. O'Rourke outlined, I do not foresee any situation where there would be a seizing of land or anything like that. I do not see such a situation arising at all.

I thank Mr. Coleman. We are just out of time on that slot. Moving on to the second Green Party slot, I will take it. Mention was made earlier of a quarterly report and performance indicator report. All of us on the committee would welcome that. It will be in the interest of the committee, but equally in the public interest. Therefore, we would welcome anything that could be done to advance that aspect and regular updates for the committee. The LDA has, indeed, always been willing to engage with the committee and we will continue to do so.

Report No. 150 from NESC on land management was referred to earlier. A statement at the start of that report on housing and land-use policy specifies that:

Ireland must bring about a fundamental change in its system of urban development, land management and housing provision. It must evolve from a speculative and highly cyclical system to a permanently affordable, stable and more sustainable system of housing.

I do not think that anyone could disagree with that statement. The report goes on then to recommend that we:

establish the Land Development Agency (LDA) on a statutory footing as a matter of urgency, with an enhanced mandate, including to provide land for social housing, and equip it with a planning role and the tools to assemble land and engage in direct development (including CPO, master-planning, and land value capture); and create specialist teams [to engage with] local authorities, [and in those] complex tasks around procurement, [and] site-unblocking.

The report also refers to delivering cost rental at scale. The Government has now done that. We have established the LDA on that statutory footing through the Land Development Agency Act 2021 and the Affordable Housing Act 2021. We have also increased the budget of the LDA and the budget for the Housing for All policy. We now expect delivery in that context. In that regard, I know there are capacity constraints all across the construction sector, from the design to building stages. Is the LDA facing similar pressures in recruiting staff or with construction costs? Will that impact the timelines and forecasts that the witnesses presented to us today?

Mr. Cormac O'Rourke

There is no doubt but that capacity constraints exist within the industry and that it is having an impact on delivery. As I outlined in my statement, one of the ways of perhaps adding to the capacity of the industry is to go to modular building but that is not going to happen overnight. The advantage of timber-frame housing and timber-frames for duplexes and other structures is not only does that add capacity, but it is also a much more sustainable and faster form of building. Timber-frame houses are watertight within a few weeks, and it is possible then to work inside and outside simultaneously. That is going to be a factor, but it is going to take us time and it will require engagement with the industry before we can operationalise it. I will pass over to Mr. Coleman on the question of staffing, because he knows the answer to this much better than I do.

Mr. John Coleman

On staffing, undoubtedly there is a competitive market for the skill sets that the LDA requires, particularly in the construction sector. That is true. Many of the people who have come to the LDA, and we have successfully recruited a solid operational platform of 60 people, and that is growing, have been attracted to the organisation because of the experience we will gain, given the focus on direct development specifically. In addition, we are seeking people who will buy in to the ethos of the LDA. We try to understand people's resolve in the context of public service and their overall aspirations and motivation in that context. That is part of the situation. Unfortunately, though, it is a competitive market for staff now. As a package, however, the LDA can be an attractive place for people to work.

I thank Mr. Coleman. A point he made earlier regarding passive house standards at the Shanganagh development is of interest to me. I remember being ridiculed at a council meeting about five years ago for suggesting that local authorities should try to build to passive house standards. I was told that I lived in a parallel Green universe and that it would never happen. I am glad to see those universes are aligning now, if the LDA is going for passive house standards at Shanganagh.

In modular building, we can achieve real energy efficiencies and advances in technology that can speed up delivery. Will the witnesses indicate what they are looking at in terms of modular building or other advances in building construction technology to speed up delivery and provide much more energy-efficient and sustainable housing?

Mr. Cormac O'Rourke

The most important point with respect to passive standards is energy efficiency and there is no doubt but that the cohorts of the population qualifying for affordable housing are the most vulnerable to fuel poverty. From a social justice perspective, it is absolutely justifiable and desirable that we build to those passive standards. In the context of climate change, it also makes much sense from an economic perspective to build to passive standards now as the cost of retrofit is considerably greater than incorporating those passive standards ab initio. That is certainly the way I look at it and from conversations with Mr. Coleman and other members of the board, I know it is very much how we look at the matter.

Thank you. I believe Mr. O'Rourke mentioned the 15-minute city principle and in the recent large-scale residential development Act, we allowed a 30% increase for the type of activity that could lead to that 15-minute city, with local commercial use, neighbourhood centres and local employment. I hope to see that in Land Development Agency schemes as well. I am just out of time in my own slot and I must be fair so I will move to the next slot, which is for Fianna Fáil.

I will let Senator Fitzpatrick go first.

I have a question that may be suited more to Mr. Coleman than Mr. O'Rourke. It specifically concerns the sites that have been identified in Dublin Central, and I am thinking about those in East Wall, Arbour Hill and the Broadstone garage in Phibsborough. Will the witnesses give us some idea of the capacity of those in terms of number of homes, and I would appreciate even ballpark figures at this stage, as the Broadstone site in particular is at a very early stage? I am assuming 100% of those homes will be social and affordable, with a mix of affordable purchase and affordable rental. Will the witnesses confirm that none of those sites will be sold to private developers?

Mr. John Coleman

Those lands were identified for transfer to the Land Development Agency and they are at various stages of negotiation and advancement. The East Wall Road site is currently owned by Dublin Port, and I should say Dublin Port has been working in a collaborative way in the transfer and making available of land there. That could yield approximately 200 homes, depending on how the development plan goes. At the St. Bricin's site at Arbour Hill, there will be in or around 400 homes, although there is complexity there because it is likely there will be protected structures designated on the site. It does not comprise all of the Arbour Hill site; it comprises the car park to the west.

The Senator also mentioned the Broadstone site, which is more complex. There are many elements to tease out there still because of the operational importance to Bus Éireann and Dublin Bus of the site now. There is a large degree of complexity there. It could yield in or around 1,000 homes or possibly more in the location, depending on how things evolve with the current operational uses. We are in consultation with the Government and those land-owning bodies now. I do not foresee a position where we sell those to the market. Our focus is clearly on social and affordable homes and I am happy to confirm all that.

That is great. My understanding of the Broadstone site is that it is partially owned by Dublin Bus and partially owned by Bus Éireann. The Land Development Agency is looking at the combination of both sites.

Mr. John Coleman

We are speaking to Bus Éireann and Dublin Bus in unison on those, as well as their holding company, CIÉ. The governance structure is that the operational uses must be very significantly taken into account as well. Both companies are our partners in that respect.

I very much appreciate the answers given in the previous round despite the questions coming in rapid fire to both Mr. Coleman and Mr. O'Rourke. Like Senator Fitzpatrick, I was looking at what is happening in my constituency but there is nothing on the current list. That is, in part, because much of the public land is owned by the local authority and will be developed by it. There is a significant presence of IDA Ireland north of Ballymun. We engaged with that body during the local authority plan process but there did not seem to be much appetite either to develop the location for further industrial use or for housing. Has the agency had negotiations with IDA Ireland and were any of the sites at Ballymun counted in?

I have a question for Mr. O'Rourke. One of the great qualities he brings from Transport Infrastructure Ireland, TII, is the significant amount of consultation that TII does with all its projects. The timelines for delivery have been much more frustrating for TII so has he taken anything from that into his new role? The delivery lines for housing must be much shorter than those for some of the infrastructure projects.

Mr. Cormac O'Rourke

Perhaps I will take the last question first. It is very important for public bodies to be seen to be doing what they are doing both in a consultation process but with broad agreement from local populations. We can look at the approach that has been adopted at St. Teresa's Gardens as we must get acceptance from the local community for what we are trying to do. If our first cut at it is not acceptable to the local community, we must change it. That is one of the lessons I bring from TII. We only operate with the co-operation of communities and we must earn both that and their respect. It has been interesting for me in the very short time I have been involved with the Land Development Agency to see the way in which that design has been amended to reflect local consultation. It really is the only way to go. We might get overly enthusiastic from time to time in what we think we can deliver and numbers of houses. If it does not fly with the local community or local authority, we must go back and take that into account.

Mr. John Coleman

The Deputy asked about the IDA Ireland sites just north of Ballymun. We have very good ongoing dialogue with IDA Ireland. Although it is not a Dublin site, we have already agreed in principle on gaining access to a very significant Cork site at Kilbarry. We have a good and very strong relationship with IDA Ireland.

We have not had any solid discussions in respect of the site mentioned, which I believe is IDA Poppintree. We have an ongoing dialogue and as part of our wider work on the State lands database, we are required by the LDA Act to report to the Government on State lands and potential for repurposing. That report must be provided 12 months from the commencement of the Act, which is imminent. We plan on doing it in 2022 and we would be happy to review the site as part of that process.

The final slot is for Fine Gael. The Deputy has seven minutes.

Super. I thank everybody who is here today for the informed and helpful discussion.

I will direct these questions to Mr. Coleman. I was heartened to hear him speak about the need to develop positive relationships with local authorities. I know this is part of the bread and butter of his role. It was good to hear him on the record clearly dismiss fears of land grabs from local authorities. This is because one of the main concerns of elected local authority members when it comes to the LDA is that many of them feel it would bypass or quench the authority they have when it comes to how local authority land is used. I fully support them on the need to protect the democratic power they have over council-owned land. One of the key remits of the LDA is to ensure State land appropriate for housing does not remain lying idle in the middle of a housing crisis. This is why it is so important that not only the LDA's targets and key performance indicators are made public but also that there is continual reporting on them so there is full transparency on how the LDA is doing, what it is doing and how much progress is being made all of the time when it comes to delivering housing and bringing affordability to the housing market. I am keen to hear Mr. Coleman's views on this.

Is Mr. Coleman comfortable with the budget allocated to the LDA and the ability to borrow beyond that budget? Does he feel this is still adequate in the context of cost inflation to deliver the homes that have been committed to. In response to the Chair, Mr. Coleman and Mr. O'Rourke spoke about modular housing and timber frame building and how they add capacity in a quicker as well as a more sustainable way. I attended a roadshow on modular builds five or six years ago. It is a real shame we have not been able to embrace this fast build in Ireland in the midst of a housing crisis. It would be very good if Mr. Coleman could keep us informed on any progress made in this regard.

How will progress be publicly measured? By this I mean more than the target is set publicly and that progress will be measured publicly. Is any unforeseen budgetary concern arising at this stage? I ask the witnesses to keep us abreast not only of progress in general but the specific inroads that may be made when it comes to modular housing.

Mr. John Coleman

I am happy to do this on an ongoing basis. The working relationship with local authorities, including councillors and the executive, is of primacy to us. If we look at the successes of and progress made by the LDA to date, much of it has been on local authority sites. It is hugely important to us. We see ourselves very much as a service provider to local authorities in this respect.

On transparency and monitoring, performance management will be very important to us. We have scheduled regular board meetings every month this year. Now that the Act has confirmed the LDA's mandate and a new board has been commenced to be built up over time, we will have a strategy that will be published later in the year. This will give a clear indication of the LDA's strategic priorities and goals. Mr. O'Rourke and I have sought to outline in a transparent way our initial views on what is possible from the LDA in the coming years and we will formalise it in a strategy document later in the year. I would welcome the opportunity to engage with the committee on this basis and regularly report back.

Deputy Higgins touched on wider transparency of the State lands database and land access. Approximately 98% of all State lands, be they owned by Government agencies, commercial semi-State bodies or local authorities, are all mapped on our website. As the Deputy can imagine it is very extensive but we are in a very detailed process of distilling this and working out what is feasible from the land. Obviously this is very much focused on contributing to housing development. It is on our website for a reason, which is to show public and elected representatives what is in the State land bank and what could be possible and to provoke discussion and debate on it. Transparency is very important and publication on our website of the database map with a lot of detailed information is a good first step towards it. It will be brought together by our report to the Government on State lands later in 2022.

On the budget, we are comfortable that we are fully funded for our activity for the coming years. No one has said to us there are particular obstacles to budget or finance availability. I am sure we will speak to the Government if it ever becomes an issue. The Government has given us additional funding through Housing for All and we are confident we are pretty well funded for the coming years to deliver on our ambitions.

With regard to modular housing I totally agree that in the medium term it has to be a way to alleviate some of the pressures in the industry at present and to tackle some of the productivity issues that Mr. O'Rourke outlined in his opening statement. Among the big barriers for Ireland as an island nation in advancing more on modular housing have been scale and accessing the supply chain from overseas. Perhaps this has also been the case with regard to a coherent delivery capability for modular or factory output on the island here. One of the positive things about the LDA, and particularly the cohesive approach with local authorities as perhaps the main State source provider of homes collectively, is that together we can achieve scale and perhaps justify greater efficiencies through procurement and even production facilities in Ireland.

I thank the witnesses for their contributions. I ask them not to take my comments personally. I know they are mandated in a particular way. I am one of the people who voted against the LDA to whom Deputy McAuliffe referred. I am very concerned about the announcement today and about particular elements of Mr. O'Rourke's opening statement in that he referred repeatedly to cost rental and affordable housing on public land. He made no reference to social housing other than previous work with approved housing bodies. This confirms my worst suspicion that Government policy, and not the LDA's agenda, is essentially that cost rental will replace differential rents and traditional council housing. This worries me.

Cost rental will be based on the costs of construction, if I understand it correctly although it has still not been fully fleshed out and anything the witnesses can say to flesh out further what it will mean in terms of rent would be helpful. Certainly in the examples I have seen so far the rents are far in excess of what they would be for a council house where it is linked to income. It is approximately 15% of income. The cost rental delivered on Enniskerry Road in my area is €1,200 a month. This is completely unaffordable for many individual workers in particular. I am very concerned. All of the lands identified in the appendix are public lands. There is a substitution effect, for want of a better phrase. Even if the agency is not, as others have referred to, grabbing land off the local authorities there is a substitution effect. We have been campaigning for 16 years to get public housing on the Shanganagh site and there still has not been a sod turned. Only some of it will be differential rent council housing, which is traditional council housing.

The rest of it will be cost rental. We do not know what that will be but it will be certainly be more expensive than traditional council housing. There will also be affordable housing. The key difference here is that the two latter categories, which the LDA mentions repeatedly, are linked in one way or another to market conditions. Mr. O’Rourke kind of made reference to that in his speech when he said we need strategies to deal with it. However, given construction cost inflation, do we not have a big reason to be concerned both about the LDA’s ability to deliver, given that it is outsourcing or tendering out, and about what the actual end cost will be and, consequently, the rents that will be charged? Is there not good reason to be concerned about those matters?

A co-operative housing project in Loughlinstown collapsed because the preferred tenderer said it could not deliver because of rising construction costs. It now has to be tendered out again. Our view, in that context, is that the strategy to deal with that is to have a State construction company. I would much rather if the LDA was a State construction company, which was not dependent on a difficult public procurement tendering process, when construction costs, as Mr. O’Rourke alluded to, are heading upwards and there is significant volatility in that area. I would like the witnesses to address that.

We are now looking at a mandate to take large swathes of public land and whereas previously, we would have delivered differential rent in traditional council housing, we will now have a regime of so-called affordability in which rents will be much higher than traditional council rents. As I said, there are also serious concerns about rising construction costs, the LDA’s vulnerability to market conditions and, ultimately, the vulnerability of either the renters or purchasers to rising costs. This is because the house price or, in the case of the cost-rental housing, the rents will be linked to market conditions in some shape or form. I would be interested to hear the LDA’s response to that.

Will the LDA explain the delay with the Shanganagh site? Why is there a delay? We were told the Shanganagh project would be on site by the end of 2021. It is still not on site. What is the delay? At what stage exactly is the project? Can we be sure that the covenant for 200 social, 200 cost-rental and 100 purchase homes will be rigorously maintained? Will social will mean "social" in the traditional sense of council housing, with rents of that type?

All the sites the LDA identifies in the schedule are public sites. It states it is also assembling privately-owned land that is not being developed but should be developed. Will it name those sites? How much work is being done in that area? That is a big area and I would prefer if the LDA was doing more of that and letting the local authorities develop public land. To what extent will the LDA go after private land that is being hoarded or sat on and should be developed for public and affordable housing?

These are seven-minute slots and there are about 40 seconds left. I am sure we can get Deputy Boyd Barrett written responses to some of his questions. Whoever wishes to take those questions may go ahead.

Mr. Cormac O'Rourke

Our mandate is definitely a matter for the Government and not really a matter for me. It is certainly well beyond my competence to talk about the concept of a State construction company.

Construction costs are an issue for everyone in the industry. I outlined in my statement where we potentially see how we could help to drive them down. My understanding is that in cost rental the more we drive those construction costs down, the better the deal will be. That is our role and the Minister has outlined a target price for us in Housing for All.

In relation to Shanganagh, my understanding is that the numbers for social housing, affordable and cost-rental units have been set. There are to be 200 social homes. I think they are set. I do not know if Mr. Coleman wants to comment on whether there has been any change since he briefed me on that.

Mr. John Coleman

No, the figures are as stated by Mr. O'Rourke and Deputy Boyd Barrett. There are to be 200 social homes, 306 cost-rental homes and 91 affordable homes, as agreed with the members of Dún Laoghaire-Rathdown County Council. We are sticking to that.

Mr. Cormac O'Rourke

In relation to the timing, the big issue is that we have tenderers in at the moment. Once they have been fully evaluated, we will go to the Government for approval, given the scale of the project. As the Deputy knows, under the public spending code, all projects greater than €100 million must be evaluated by the Departments of Housing, Local Government and Heritage and Public Expenditure and Reform and approved by Cabinet.

I will move on. Deputy Ó Broin is next.

I could see the strain on Mr. O'Rourke’s face when he went through the rigours of the public spending code. I share his pain about the dead hand of the Department of Public Expenditure and Reform on housing delivery.

I would like to follow up on three of the themes we have been discussing with Mr. O'Rourke. As Mr. O'Rourke will know, turnkeys are not just purchases of completed blocks of units. They are very often forward purchase agreements before construction has started or at the early stage of construction by local authorities and approved housing bodies. The Government’s housing plan is dramatically increasing competition for forward purchase agreements on the public housing side. This is because local authorities and AHBs are now not only in the market for social housing, but the cost-rental equity loan is putting them in the market for cost-rental housing. The Housing Agency, through Croí Connaithe, will do something similar. It is hard to see how the LDA will not end up in competition with AHBs. One of the concerns is not only competition but the fact that the LDA is not bound by the ceiling limits for acquisitions or the building of social affordable homes by the Department in the way that the local authorities and approved housing bodies are. Competition and the LDA's extra spending power could, therefore, have an inflationary impact on the cost of public housing. I am interested in hearing any information the LDA could give about how it believes it could avoid such competition. That is important.

On the tenure mix, I am genuinely concerned by the way in which the discussion around Part V obligations has seeped into discussions of the Land Development Agency. In my view, the LDA should not be talking about Part V. Part V was inserted to the Planning and Development Act 2000 to ensure that private development had a tenure mix. The LDA is not involved in private sector development and tenure mix is already embedded. It would be much more appropriate for tenure mix to be determined in conjunction with the local authorities, irrespective of the landownership, and on the basis of the housing need and demand assessment, which the LDA also has an obligation to adhere to. Therefore, there should be no discussion about arbitrary tenures of 75%, 10% or 15%. Every site should be site-specific and determined locally based on housing need. Again, I would be interested in whether the LDA believes Part V is a legislative requirement by which the LDA is constrained, to go back to Mr. O'Rourke's comments on public policy where we have more flexibility.

My last question might be more specifically for Mr. Coleman, although Mr. O'Rourke should feel free to answer it first. I go back to Deputy McAuliffe's question on 100% social affordable housing on public land in Dublin. Does that apply to the Dundrum Central site? For some time, Mr. Coleman has been diplomatically avoiding answering this question every time I ask it. However, the public has a right to know if there will be open market private sale homes on that site, in addition to social affordable housing. If so, what is the percentage?

Mr. Cormac O'Rourke

I thank the Deputy. The intrusion of the Part V nomenclature into the debate is probably my fault based on some of the briefing documents I have. I agree with the Deputy. I made clear that the housing need and demand assessment will govern the tenure mix that we will have. If the Deputy is asking what takes precedence, the housing need and demand assessment will definitely take precedence. As I made clear, the expertise and history of managing this lies with the local authorities.

We see ourselves working very closely with them. The honest answer to how we avoid competition is that we do not fully know yet. We want to look perhaps at how long some of the planning permissions have been extant, to what extent they would be coming close to expiry and why. We need to find some method to ensure the State is not bidding against itself. It is not in our interests and it is certainly not in the interests of the State that we are bidding against State-supported approved housing bodies and State-supported local authorities looking for turnkey. That is close to the definition of insanity. We have got to find a way around that. I am not sure that we have it fully worked out. We have some ideas about how we might access the database. I do not yet know whether that is within our remit and if that is possible.

It might be better if Mr. Coleman answers the question on the details of Dundrum.

Mr. John Coleman

I will supplement Mr. O'Rourke's answer on competition with other State bodies. I support his statement that it is not a space we want to be in. When I say State bodies, I also mean State-funded bodies like approved housing bodies. We are very conscious of that. We spent a lot of time in discussions with the Department about that and how we co-ordinate. In the materials that we put out on Project Tosaigh, we have stated that we will request permission of parties that deal with us to discuss and share information with the Department to operate in a co-ordinated way with other bodies that are in this space.

Over the course of Project Tosaigh, we are trying to target larger scale multi-annual delivery arrangements, which might involve multiple projects for instance over a number of years. The AHBs and local authorities would target developments of probably up to 100 units or so that we would not necessarily be trying to target. To be frank, if we hear any of our counter parties saying they got another offer from an AHB, our stance would be to suggest they should continue their discussions with it because we are not interested in competing with other State bodies. That is a big no-no. Deputy Ó Broin's point is well made. I can assure him that we are doing our best to try to manage that.

Going back to the core point on Dundrum Central, what we are targeting there is 100% social and affordable, with a degree of cost-rental in particular.

I thank Deputy Ó Broin. I am going to take this slot myself. I might have put this question to Mr. Coleman previously. I definitely asked it in the committee previously. Does he think we have more work to do to try to explain, advertise and encourage cost rental and to give a greater understanding of what it is? To my mind, it is long-term, secure tenure rental at affordable rates. It is well designed in good quality neighbourhoods with sustainable transport. It is part of an overall package. We met our counterparts in Vienna, the Green Party in Vienna, which is the standard bearer for cost rental. Does Mr. Coleman think we have more to do to explain what cost rental is? Has he met the housing agencies in Vienna, for example, to look at their cost-rental model and how we could evolve and increase delivery? I believe there will be more delivery of cost rental as the LDA advances?

Mr. John Coleman

I will come in on that one. In respect of engagement with others in the space, we have done so, but the pandemic has slightly restricted that. You may remember, a Chathaoirligh, a series of workshops that was run on the Vienna model by Dublin City Council. The LDA participated in those discussions. We have discussed and met with other parties in Europe, in particular in Vienna, to understand where their successes have come from and what has made the difference. In Vienna and other areas, cost rental, or versions of it, are very much the norm. It is accepted and understood. Given the large scale in these other jurisdictions, it takes a number of decades to establish on the required scale. We see a key role for the LDA, given our access to State land, our partnership with local authorities and our focus on affordable housing to be the starting point to achieve scale similar to other jurisdictions for cost rental or similar forms of accommodation provision. That is a strategic opportunity that the State has through the LDA working with local authorities.

In terms of the understanding of cost rental, four or five months ago we commissioned a series of reports from Behaviour & Attitudes in respect of people's understanding of cost rental. We were quite surprised with the outcome. Essentially, not that many people understood cost rental. Through our discussions with people in the target market for cost rental we realised that quite a low proportion understood the concept of cost rental. When it was explained to them, it was overwhelmingly attractive to them. We do have a job to communicate better what cost rental is. Given the key role of the LDA in the provision of cost-rental homes, we have some ideas on that. That is something on which we will happy to work with policymakers on an ongoing basis. I concur with the point you make, a Chathaoirligh.

I thank Mr. Coleman. I think all of us favour cost rental. It is going to be a game-changer if it is done right, but it will take time. It is something that will evolve, and we will deliver more of it over time.

There was a question earlier on budgetary and other constraints. What would it take for the LDA to achieve more than 2,000 units per annum? At this stage we need to use every tool available to us.

Mr. Cormac O'Rourke

In the first instance, if we look at our funding envelope of €3.5 billion, that is sufficient to fund in the order of 10,000 houses. We have a lot of work to do before we get anywhere close to exhausting that amount. There are no budgetary constraints that I am aware of so far, that are constraining our delivery. It is just the sheer logistics of getting up and running to get to a point where we can deliver the 2,000 houses per annum. It is not a question of budget; it is a question of pure logistics. The LDA has come a long way in the past two years. It now needs to focus on the delivery aspect of its mandate. Mr. Coleman might want to add to that.

Mr. John Coleman

I fully concur. The challenge is not a financial one, it is getting the projects up and running to a point where they can be delivered. There are significant logistics, as Mr. O'Rourke put it, involved in doing that, between planning, site assembly and procurement. The focus is very much on ramping up to get to that run rate of delivery. That is our key priority now. We want to be ambitious, but building the institutional capacity and getting through the logistical work to get to that scale of delivery run rate is the challenge.

I thank Mr. Coleman. It is good to hear that there is no budgetary constraint to deal with the scale of the challenge that lies ahead. It is also important to hear that putting more money into it would not speed up the delivery. I will move on the next speaker.

I want to come back to Mr. O'Rourke and Mr. Coleman on a few questions, the first of which goes back to the need for a disability officer. If we are looking at building 2,000 homes per year, that will amount to 40,000 over 20 years. We would need to put a figure on how many universal design homes we are going to deliver for people with disabilities. The LDA would have to employ a disability officer and ensure that members of its board and staff are from the disability community. The job of work the agency is doing now is so immense that not to have disability advocates included and working for it would be a major mistake. Could I get a comment on that first?

Mr. Cormac O'Rourke

I agree that having a disability advocate at board level would be helpful, which was the case in TII. Mr. Des Kenny added immensely in delivering his expertise both in design but also bringing the awareness of disability to the other board members.

In terms of a disability officer, let us come back to the Deputy on that. Clearly, how we are going to address this is a very important issue. I do not know off the top of my head what the appropriate percentage of our stock is that should be disability enabled. The building regulations are there to enable wheelchair access and other disability-friendly designs. They are supposed to be for all buildings. It is not just about tailored support of units for those with disabilities. It is actually allowing people with disabilities to access all buildings that we produce.

It is something we should take away and come back to the Deputy in a more considered way. I am not sure to what extent either the board or indeed the management have looked at it. Let us come back to him in a more considered way and hopefully that will help alleviate his concerns. His point is very well made, however.

I appreciate that Mr. O'Rourke and Mr. Coleman hear what I am saying. I look forward to them coming back to me on what they will do regarding universal design for people with disabilities, those living with mobility issues and older people. Mr. O'Rourke spoke earlier about sustainability and this is a key part in that sustainability whereby people are going to live in these homes for the rest of their lives, irrespective of their health as they get older.

Another issue I touched on earlier was the announcement in November 2020 that the LDA office that was scheduled to be opened in Cork has been postponed indefinitely. Is there any comment on that?

Mr. Cormac O'Rourke

I am not familiar with that. Perhaps Mr. Coleman might take that question.

Mr. John Coleman

I will come in on that. Obviously, with the increase in working from home over the past couple of years and the pandemic situation, we are keeping that under review. I am glad to say that we have actually made progress on that. The whole purpose and point of opening up regional offices was to increase the focus on regional balance and have more focus of the LDA not just in Dublin and surrounding counties but also particularly Cork and Limerick. We have agreed with Cork City Council and we currently have office space available. We have one member of staff down there at the moment. We are operating out of City Hall so we have an office as a starting point. We would be open to broadening our horizons, however. That is something I believe the board of the LDA will have a close look at as we go through our strategic and business planning process for 2022.

Okay. With regard to cost rentals, one of the arguments other members of the board and I have been putting up is that affordability should be based on a person's income and not a reduced rate on the market value. Mr. O'Rourke might give us his thoughts on that. We believe that for a property to be truly affordable, it would be based on a person's ability to pay. If market value is used to work out the affordability of a property, will it be an average market value for the whole of Cork or will it be specific areas? We are talking about the St. Kevin's site now. When we come up with a cost for those cost-rental sites, will it be based on the Shanakiel market rent, which would be quite high, or will it be based over the whole of Cork?

Mr. Cormac O'Rourke

While I have a lot of sympathy for the Deputy's view, affordability is a very difficult issue. We will be told how to implement cost rental. We will not be setting that policy ourselves. We will be told by the Department and Minister about how we are to implement it. We can, however, certainly help ourselves and the process by trying to deliver at as low a cost as possible. In that context, it is fair to say that is easier done on greenfield sites than on existing brownfield sites that have listed buildings. We are going to work with the Government to see to what extent it can support us to lower the rents. Ultimately, however, that is a matter of policy for Government. We do not determine how we go about this. As I said, we will be told; we will not set the policy.

My final point is that I am concerned about some of the comments today regarding the ten-year mix between affordable, cost-rental and social housing. If I was to be a sceptic or if I was to doubt the Minister or Government, it almost seems to me that the LDA is being structured in such a way as to deliver affordable and cost-rental housing and to leave the provision of social housing up to local authorities. That would be very concerning because the whole concept of the agency was to provide balanced development across all three areas. Mr. O'Rourke made a comment in on it being only 10% for St. Kevin's. I know Mr. Coleman said that they will discuss that with the council. When we are talking about housing need, there is a huge need for cost-rental and affordable housing but also social housing in Cork. That really has to be looked at to ensure that the Government is not trying to change the LDA from what it was originally set out when it is only just up and running.

Mr. Cormac O'Rourke

I apologise if I have misled or through my lack of understanding brought the committee to a point where it believes that it is only 10%. If we look at Shanganagh, which was one of our first projects, it is 30%. We will be guided by the local authority as to what the ten-year mix is. As I said, there is a very strong argument, and I have seen this in my TII work, that the bigger the scale, the greater the level of competitive tension and economic scale that can be brought to it. We are going to work very hard on looking at procurement strategies that maximise our ability to drive down the cost. It is by driving down the cost that we will deliver the cost-rental accommodation.

I was very struck by a paper Dr. Rory O'Donnell did on the Housing Commission approximately two years ago that was sponsored by the Department in which he said the game has changed in housing and affordability, and the lack of inflation has actually exacerbated the problem with housing affordability. Some things are within our control; others are not. We will work as hard as we can on those items that are within the control of the LDA, however. We will work with Government on the items that are within its control and push as hard as we can to reduce the cost to the lowest possible level of delivery.

I thank Mr. O'Rourke. We are up to ten minutes on that slot now. Deputy Boyd Barrett wishes to come in again. He has seven minutes.

To follow on from Deputy Gould's question and my own earlier question, I am worried about the levels of rent in cost rental. The statement Mr. O’Rourke made about 75% being what the LDA will deliver as cost rental concerns me, as I said. This is land that, if it was developed under the old model, would be 100% income-based rent, based on the differential rental scheme. This is not for the LDA and it is Government policy, but there is a substitution effect where land that used to be available to everybody on a differential rent basis will now be more expensive and it will be cost rental. However, what will that cost rental rent look like? Mr. O’Rourke is saying that the Government will decide that and the LDA will do its best to make it as affordable as possible, and how cheap it can make it will depend on Government support and so on. I am not clear what that adds up to.

To be concrete about it, can Mr. O’Rourke at this stage tell us what the cost-rental rents will be in Shanganagh, the first site on the LDA’s list and the one that is closest to starting? It is still not clear to me precisely when it is going to start. He might be able to tell us precisely when it is going to start and precisely why there are still delays on the original commencement which, as I understood it, was supposed to begin in 2021. Can he tell us, even at this stage, what the rents will be for cost rental in Shanganagh? Can he tell us anything about what the prices under affordable purchase will be in Shanganagh? As he will be aware, our concern is that, given they are linked to local market conditions and Dún Laoghaire-Rathdown now has the highest house prices in the entire country at €590,000, even a 30% or 40% reduction on that would still be completely unaffordable for people. Is there anything he can tell us to give us comfort that cost rental is not going to be a very considerable mark-up on what we would have got if we had just built social housing there, and that the affordable housing will actually be affordable?

Mr. Cormac O'Rourke

As I said to the Deputy earlier, we cannot tell him what the cost of cost rental will be. The tenders are still being evaluated and they still have to go through approval with the Government, so I cannot tell him that. I have been in and around engineering and construction for most of my life. Until somebody agrees to build something for a price, we have no guarantee on what that price is.

As to the mix between differential rent and cost rental, as I said, that is primarily a matter of policy for Government. I agree with the Deputy that, at €490,000 for the average price in Dun Laoghaire, that is not affordable to any of the cohort. It does not matter what magic we bring to bear on it; it is not going to result in an affordable rent.

I am sorry to tell Mr. O’Rourke the average house price is €590,000. It is shocking. I know he is from the area.

As a supplementary question, I understand the agency is bound by its mandate but Mr. O’Rourke’s answer is very revealing and, frankly, alarming. I do not blame him for that but it really is alarming. We have the biggest and only large development site planned, it is the first one on the LDA's list and we have been fighting for 15 years to get public housing on it, yet we still do not have an answer on when it is starting and we do not know what the affordable rents will be or what the prices will be. I genuinely do not blame Mr. O’Rourke but I blame the Government. That is worrying. It is not a great start.

Can I clarify Mr. O’Rourke's answer? He said he could not give the information until we knew the cost of the cost-rental apartments. It would be preposterous to suggest that we could give an indication in advance of the costs being known.

I ask members to speak through the Chair. Mr. O’Rourke has answered the question. I will let Deputy McAuliffe come in if he wishes to ask a question but Deputy Boyd Barrett has two minutes left in his slot.

Perhaps Mr. O’Rourke or Mr. Coleman will comment on it. This really is the truth about cost rental, namely, we cannot control the rents for cost rental on public land. We cannot control them because they are linked to the cost of construction and the LDA does not know what the cost of construction is going to be and it is dependent on the market to dictate that. That is a fundamental break from social housing. We can tell what the rent in social housing will be. Regardless of market conditions, we can say the rent will be 15% of a person's income, whatever their income is. Now, we are unrolling 75% of public land under the remit of the LDA where we will not be able to tell. Unless there is something Mr. O’Rourke can add to this, what he seems to be saying is that the LDA will not be able to tell us what the rents will be and that the market will dictate it. That is worrying.

Thank you. I call Deputy McAuliffe.

One of the fundamental tenets of a cost-rental system is that the original costs of constructing the units over the lifetime of the project are used to calculate the rent, including maintenance, sinking fund for repairs and so on. I do not agree with this idea of identifying the rent in advance of the LDA knowing the cost of constructing it. Deputy Boyd Barrett is not actually making the point about the cost-rental model; he is making the point that there should be public construction and that, instead of using a builder to construct that, we should be using the State to construct. There are many different arguments around housing but the idea that the State would establish its own building company is very far from much of the debate. I ask Mr. O’Rourke and Mr. Coleman to come back and clarify that that is the model and that we are not suggesting we would roll out a new social housing model for those people on higher incomes. We are trying to establish a cost-rental model that could then become the predominant model for renting in the market. We are replacing the private rental market, or if not replacing it, we are competing with the private rental market and we are not seeking to roll out an expanded version of social housing.

Mr. Cormac O'Rourke

I am not sure how I can best describe the model. The model is one where the land is coming to us substantially below market cost because it is coming with the burden of the affordable housing. When it is transferred to us, the cost of land is substantially less than the market sector can access, so that cost benefit is passed through in the cost-rental model. On the extent to which other policy-driven items are passed through, again, as I said, we are discussing those with the Government and we will be told what it would like us to do and what it can do for us.

There are a limited number of levers. The Society of Chartered Surveyors Ireland produced a very good breakdown of what it takes to build a house. Certain things are to our advantage, particularly the cost of land, and the cost of land will come to us at substantially below market price because it comes with that burden that we can only build affordable housing on it, which reduces the value. There are other things that we can do internally within the LDA to reduce our costs but there are also items that are policy-driven.

The cost-rental model is not completely divorced what from what can be sourced in the marketplace in terms of construction. Construction is very different from the development model, where people build on their own land, whereas construction companies traditionally build on other people's land and run at much lower margins than developers.

Is the Deputy okay with that?

Yes. I thank the Chair.

The NESC report I mentioned also referred to the speculative nature of land deals and that speculative hoarding was also driving house prices. That is not something the LDA will be engaged in. What Mr. O'Rourke said as well is that the cost of land coming to the LDA will have a positive impact in driving down prices to make housing, and cost-rental housing, affordable. It is a good NESC report.

I indicated that I wished to come in briefly.

I indicated before the Deputy. I will bring him in after I ask a question.

I thank the Chair.

We will have enough time for the Deputy and I to have seven minutes each.

On transport-oriented development, we had a good session last week where we examined how we could rejuvenate town centres and bring life and vibrancy back into them. Part of that discussion focused on transport-oriented development. I note that several of the projects the LDA is working on already, at Limerick Colbert Station, Broadstone Garage and the Inchicore CIÉ works site, for example, are on transport corridors. I do not know if the agency is involved in the Heuston south quarter or in Cork. One of the points made regarding the LDA is that it can bring complex land deals together, operate at scale and has a budget and oversight. Does the LDA have the reach into the Department of Transport and the transport agencies to enable it to sit down with representatives of these bodies and point out that if the frequency of transport and rail services were doubled and the requisite budgets were made available to fund those transport services, it would make pockets and parcels of land along transport corridors sustainable locations for residential and other types of development? The issue now is that we do not have the transport links in such places. We have skeleton transport links. Will the LDA have the ability to do that? Has the LDA sat down with representatives of the Department of Transport or any of the transport agencies to look at sites around the country?

Mr. Cormac O'Rourke

Before I bring in Mr. Coleman, clearly I know one or two people in the transport area and I will be very happy to facilitate discussions with the Department and other agencies in this regard. Regarding whether we have already had such discussions with the Department of Transport and the NTA, in the first instance, and the other transport providers, I will pass that question over to Mr. Coleman.

Mr. John Coleman

We have had extensive engagement on transport with the Minister for Transport, Deputy Eamon Ryan, the Secretary General of the Department of Transport and representatives of agencies such as CIÉ and Irish Rail. Along with the local authorities, that has been one of the more positive aspects of interagency collaboration. We worked very well with CIÉ and Irish Rail regarding Limerick Colbert Station to try to accommodate complex operational needs with a vision for the wider transport-oriented development approach. In fact, Irish Rail and the Minister have been championing transport-oriented development. Therefore, we found ourselves pushing an open door on the transport side.

It takes time to deliver on visions around transport-oriented development, just because of its nature. There are some opportunities to grasp low-hanging fruit though in respect of existing infrastructure that may perhaps be underutilised in parts. The level of engagement with the Department of Transport and the transport agencies has been positive. I think that is because there are shared objectives and incentives regarding enabling intensive development around transport nodes. It is good for operational and business purposes for the transport companies and good for the LDA in respect of unlocking opportunities, so I am happy to report that we have good engagement in that respect.

Would that include looking at the capacity and frequency of transport services along corridors and not just the sites along them? Too often we see planning applications being submitted that refer to developments being close to public transport, but that may refer to a small and irregular bus service or something similar. It is imperative therefore that high-frequency transport is provided as part of developments to break people's habit of getting into the car. Is that capacity aspect included?

Mr. John Coleman

Yes, it is. The discussions we have had, especially with Irish Rail, have indicated an openness in that regard. If we can develop and bring forward a vision and plans for strategic areas with scale, in particular, because that is the big mover, Irish Rail has indicated an openness to increasing capacity and frequency on existing and planned infrastructure. In short, yes, is the answer to the question.

I thank Mr. Coleman. Deputy Ó Broin has indicated, and this will be the last slot.

The point made by Deputy Boyd Barrett it is one of the most fundamental issues in this debate. It frustrates me that the point he correctly makes continues to be misunderstood. I will go back over it with Mr. O'Rourke, for the benefit of those of us who have been dealing with it for a long time. We all know what cost-rental housing is. The rents are set at the full-cost recovery of the all-in cost of the development, management and maintenance of the unit. The crucial point is that if one of the homes in the Shanganagh development costs the LDA €300,000 from a contractor, and if that amount is repaid over 25 years, the rents will be high. On the other hand, if the approach taken is what is done in Vienna, where the cost is paid off over 60 years, the rents will be substantially lower. We know this is the case because of the example of the pilot project of the Respond and Tuath housing associations on the Enniskerry Road. The original rent was to be €1,600 a month in respect of full-cost recovery to pay down the finance involved over 25 years, but because the AHBs rightly said that rent was far too high, a deal was struck to reconstruct the financing.

Mr. O'Rourke will know better than I will from his extensive experience that the price the tenant pays is not just a function of the construction cost of the unit but also how the LDA will structure the full-cost recovery financing package. Therefore, one of the fundamental flaws in the model that the LDA is being asked to implement is that it does not set the target rent at the outset of a project. I am not referring to a differential rent. Deputy Boyd Barrett and I probably do not agree on the finer detail of this point. The great value of cost rental is that it allows projects to be engineered with a degree of flexibility, project by project. If it is decided that a project is being primarily targeted at a cohort of people for whom a genuinely affordable rent is, for example, 29% of their net disposable income, then that cost for a one-bedroom, two-bedroom or three-bedroom unit will be €700, €800 and €900 a month, respectively. If the market price of the unit is "X", the question to be asked then is how it will be possible to engineer full-cost recovery to result in those entry-level rents.

The difficulty is that the model the LDA is employing is doing this in reverse. It is allowing the cost of the delivery of the unit to set a rent, regardless of whether it is genuinely affordable for the targeted cohort of people. The financing structure constraining repayment of the cost within 25, 30 or, in some cases, 40 years, rather than in 50 or 60 years, means the rents will be too high. Therefore, given all Mr. O'Rourke's expertise, especially in the financing of large long-term infrastructure projects, I urge him to use his influence in the board to shift the focus away from the model given to the LDA and to start instead with what we think is a standard affordable rent. Let us see what the market offers in the way of tenders, because I accept there is nothing Mr. O'Rourke or the LDA can do about that issue now. The case should then be made for a different structuring of the finance model to get the rents below €1,000. The rent in Shanganagh should be €800 for a two-bedroom unit. When officials from the Department of Finance were asked at the Joint Committee on Housing, Planning and Local Government during the previous Oireachtas if such an approach was possible, they said it was theoretically possible if the length of the maturity of the loan finance, the interest rates and some level of soft recoupable loan from the State, post the payback of the European Investment Bank, EIB, or Housing Finance Agency loans, was designed to do so.

I am not so much asking a question as expressing my increasing frustration at the reverse and backward way that we are doing this. The consequences in some cost-rental projects, for example, will be that the rents will be higher than €1,200, and may reach €1,300 or €1,400. Mr. Coleman knows that as well as I do. Therefore, we must undertake this process the other way. Major European cities are delivering cost-rental today with rents set at €700, €800 and €900 with broadly the same construction costs and unit sizes. The crucial difference lies in 50-year and 60-year financing. If Mr. O'Rourke has a response on this, I will be interested to hear it. I ask him to please try to advocate that approach in the comfort of a board meeting whose minutes are heavily redacted before we see them, because that is the only way this project is going to work in the long term.

Mr. Cormac O'Rourke

I thank the Deputy for the suggestion. I am struggling to think of an occasion where I have seen 50 or 60-year financing.

It is our intention with respect to the debt side of the business to engage with the European Investment Bank, EIB. As the Deputy is well aware, EIB funding is probably the cheapest available, provided one fits one of its mandated areas, and social housing is very clearly one of those. We will engage with it.

Mr. O'Rourke is absolutely right. We will not get 60-year finance from the EIB or the Housing Finance Agency, HFA, but what we can do, as has been done with the Enniskerry Road project, is get EIB financing funnelled through the HFA for 40 years. The State can also provide soft loans upfront, which only fall due after the 40 years and can then be extended for another ten or 20 years again. That model is used in other European jurisdictions to deliver genuine affordability. Our risk is in the fact that we will deliver cost rental but it will not be affordable cost rental. That is why soft State loans and HFA and EIB loans recoupable after a certain time are key to this. The project will not succeed on a large scale without them.

Mr. Cormac O'Rourke

I would be delighted to hear more about that. We are on the same page with regard to how the State interacts with us and manages things like amortisation. I was very interested to read the Housing Agency's report on cost rental in other cities and even in places as sophisticated as Helsinki. In those cases, the loans are not fully amortised when things like life cycle renewal costs begin to kick in and even these other countries have not actually managed to figure out how to integrate those into the cost rental model. It is an issue and I recognise the complexity of it. As the Deputy correctly identified, I have been involved in financial engineering for a long time, particularly in the area of infrastructure. We will certainly take this back to the Government. I hear what the Deputy is saying about affordability. That point has been made by a number of committee members today. We will bear in mind when discussing this matter with the Government that there is no point in delivering a product that nobody is going to take up. That is not in anyone's interest. As a touchstone it is a useful way for us to engage with the system.

I thank Mr. O'Rourke. I wish him the very best of luck in his job and congratulate him on his appointment. I thank him for answering all our questions today. It was also good to see Mr. Coleman again. He is welcome to come back to the committee at any time to give us updates on the progress on delivery of units. I ask the witnesses to bear in mind the suggestion of a quarterly update or some sort of performance indicators that could be brought back to the committee. We would appreciate that.

The joint committee adjourned at 4.13 p.m. until 3 p.m. on Tuesday, 25 January 2022.
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