Builders have been increasingly using cash payments to get around their obligation to provide 20 per cent of development land for social and affordable housing, new research for Focus Ireland has found.
However, this was rejected by the Construction Federation of Ireland yesterday.
The Building for Inclusion? report found that only one-third of the social and affordable homes planned under legislation were delivered in the past two years.
Part V of the Planning and Development Act gives local authorities the power to insist that up to 20 per cent of land in most housing developments are reserved for social and affordable housing.
In 2004 social and affordable housing output reached 30 per cent of the planned figure, and rose to 35 per cent last year.
The Government amended the law in 2002 to allow builders give a cash payment to local authorities instead of transferring land or housing.
The report has identified this as one of the reasons for the failure to meet the 20 per cent target.
It also points to the change in planning permission rules which gave builders more time to construct developments which were not subject to the 20 per cent condition.
The report estimates that some 14,000 social and affordable houses could have been lost because of this.
Declan Jones, Focus Ireland chief executive, said "if we are to increase output then the acceptance of cash transfers from developers in lieu of land or housing to local authorities must be avoided. It should only be used as an option of last resort."
However, Hubert Fitzpatrick, director of the Irish Home Builders' Association, said the cash transfer option was only used as a last resort.
He said just €25 million had been given to local authorities under this condition.
This was "a very small figure" when the amount of construction in the last three years was taken into account.
He said the option of paying cash to the local authority instead of giving land was introduced to give local authorities more flexibility.
"Where the financial option is utilised, the monies collected must be ring-fenced for use for social and affordable housing."
Mr Fitzpatrick said the output was lower than expected because of delays in adopting housing strategies.
Despite social housing rates being "well behind" planned targets, Mr Jones said development of social and affordable housing was increasing.
"Focus Ireland believes that Part V has great potential and can play a key role in providing housing to those priced out of the market if the recommendations of the report are taken on board."
He said the 20 per cent rule would also help to avoid social segregation by promoting mixed housing developments.
The report recommends that teams be established in each local authority to ensure that the 20 per cent rule is followed.
It also calls for a radical review of the approval process in the Department of the Environment for social housing developments.
Fine Gael spokesman on the environment Fergus O'Dowd said the report showed "just how badly managed" the Part V condition was.
"It is vital that the Minister and his department spell out how they will overcome these issues and sort out the mess that Part V has become."
Labour's Emmet Stagg said the figures showed that the Government was "failing miserably" to meet basic targets on social and affordable housing provision.
"Families who for generations have lived in the one area now find that their children cannot purchase a home in the community in which they were reared."
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