Dáil Éireann Debate, Thursday - 9 September 2021
337. Deputy Cian O'Callaghan asked the Minister for Housing, Local Government and Heritage the net benefit if any to the Exchequer in discounted terms of part V agreements concluded between 2012 to date compared with traditional provision of social housing by local authorities; and if he will make a statement on the matter. [42145/21]
View answerPart V of the Planning and Development Acts 2000 to 2020 allows a local authority to purchase a percentage of land (currently up to 10%) at existing use value and to use this land for the provision of social housing support. Existing use value is the value of the land without the benefit of planning permission and is generally less than the market value, particularly for greenfield sites.
The purpose of Part V is to achieve a housing mix rather than having housing estates of a mono tenure. It ensures that all applicable housing developments contain some social housing as well as owner occupied and potentially also private rented housing. The exclusion of developer profit and land value planning gain from the price payable for Part V units means that they can be acquired at less than their open market value.
A local authority’s options under Part V to capture the 10% of net monetary value are -
- the transfer of ownership of land, subject to the planning permission application, to a local authority for the provision of social housing (the default option);
- the building and transfer of ownership to the local authority, or persons nominated, of completed social homes on the site subject to the planning permission;
- the transfer of ownership to the local authority, or persons nominated, of completed social housing homes on other land;
- the long term leasing of social housing homes; and
- a combination of the options above.
My Department records Part V unit data based on the expenditure recouped by the local authorities. However, local authorities may take land as part of the Part V agreement and we don’t have sight of this until the LA develops a proposal to build units on that land, which may not be for a number of years. It is therefore not possible to provide complete details of the net benefit to the Exchequer in discounted terms of Part V agreements concluded between 2012 to date, compared with traditional provision of social housing by local authorities.
However, I am setting out below data comparing the cost of Part V units acquired by local authorities with tendered costs for local authority-led construction of social homes, for each of the years 2017 to 2020. The construction costs vary depending on design, type of units (e.g. bedroom numbers, apartment/house), and on the level of abnormal cost requirements for each scheme, such as site conditions, demolitions, service diversions and site access requirements. The costs below relate to the construction element only of the all-in delivery cost. Other items that make up the all-in delivery cost, but which are excluded from the figures shown, include the following:
- Design/technical fees : Design fees vary from project to project, depending on the location, size and complexity of a scheme (and depending on whether design services are provided by a local authority in-house or via external appointment). As a guideline/indicator, design fee generally range between 7.5% and 12.5% of construction costs:
- Land cost : Land costs can vary significantly from project to project, depending on location and ownership status (e.g. land costs could vary from existing local authority land with no cost to land purchased at market value).
- Utilities : Connection fees for Irish Water, ESB, gas, etc. As a guideline/indicator, utility connection costs are generally in the order of €7k per unit.
- Other Costs : Other elements that can make up the all-in delivery cost can include site investigations/ surveys, archaeological requirements, Percent for Art contributions - and will vary from scheme to scheme.
|
- |
Average Cost Per Unit – LA Construction (excluding items listed above) |
Average Cost Per Unit – Part V |
|
2017 |
185,935 |
184,971 |
|
2018 |
222,085 |
215,915 |
|
2019 |
239,837 |
224,514 |
|
2020 |
205,111 |
234,373 |
