It was surprising and unsurprising to see the headline 300,000 homebuilding target rehashed as part of the Government’s latest housing plan.
Surprising because the 300,000 target was the central ambition of the previous plan, published in 2021, and because many think it is still too low to accommodate the increase in population.
Unsurprising because the Government’s promised lift in homebuilding has so far failed to materialise and the signs for this year and next aren’t particularly positive.
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Part of the Government’s pitch to voters during the election campaign last year was that the State had turned a corner on housing, and even if the situation was still unsatisfactory, the right policies were in place to fix it.
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But the right policies weren’t in place if the fall-off in housing supply in 2024 (it fell to 30,000) and the subsequent move to change rent controls, as well as reduce VAT on new-build apartments, are anything to go by.
Now the Government has a credibility gap. For this reason, the plan jettisons annual targets – a significant break with the previous plan – in favour of one overall 2030 target.
The new plan does, however, bring to bear the State’s considerable financial muscle. The Land Development Agency (LDA) will be allocated an additional €2.5 billion in funding, bringing its total funding to €8.75 billion. The agency will also be given an expanded remit, allowing it to purchase private land and deliver private housing.
Obstacles relating to infrastructure and planning – key blocks on delivery – also get top billing.
The plan commits €12.2 billion of State funding to water and wastewater services and €3.5 billion for the power grid.
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Taoiseach Micheál Martin also indicated that the Government was prepared to introduce new legislation to fast-track infrastructural projects that are of vital national interest such as the Greater Dublin Drainage Scheme.
It has taken a long time for the Government to adequately acknowledge that the machinery of State is acting as an inhibitor.
What the plan neatly sidesteps is whether the 300,000 target – if delivered – will make housing more affordable.
One thing we can say for sure is that failing to deliver it will probably aggravate the existing affordability gap.
