NESC publishes Council Report 145: Urban Development Land, Housing and Infrastructure: Fixing Ireland's Broken System
‘Fixing Ireland’s Broken Land and Housing System’
The State must drive the provision of housing and urban development. The Irish housing system is speculative, volatile and expensive. The urban land system is dysfunctional: land is not available in appropriate locations at a cost that will allow affordable housing to be provided. This is the message from the National Economic and Social Council (NESC) who today publish a new report Urban Development Land, Housing and Infrastructure: Fixing Ireland’s Broken System.
Speaking at the publication of the report Dr Rory O’Donnell, the Director of NESC, said ‘’we know from experience that in countries with more effective, affordable and stable housing systems—such as Austria, Germany and the Netherlands—public bodies actively manage land supply, housing provision and affordability’’. He also highlighted that ‘’other countries are increasingly drawing on the uplift in land value to help to fund transport infrastructure and affordable housing’’.
The report argues that housing affordability must be built into the supply of housing. International experience suggests that cost rental is the most effective and fiscally sustainable way of achieving permanent affordability. Cost-rental provides housing that is more affordable by offering housing providers land or finance at lower cost. The rents charged are linked to those lower costs. The equity which builds up as the loans are repaid creates a revolving fund that can be used to provide more affordable housing in the future.
Public institutions need a strong developmental mandate, political authorisation and executive capacity to drive housing supply and sustainable urban development. The establishment of the National Regeneration and Development Agency (NRDA) is a step in this direction. It is critical that the NDRA has a clearly defined mandate to supply serviced land for permanent affordable housing and public services, adequate capital and the ability to raise finance, and a sufficient number of highly skilled staff with both public-sector and private-market expertise.
Publicly owned land has a central role in increasing the supply of affordable housing. Rather than selling public land for short term revenue, it should be used to drive the provision of affordable housing and the transition to a new system of housing and active land management. This would constitute a change from the approach adopted by many public bodies, including NAMA.
Current arrangements with respect to urban development land in private ownership, such as the vacant site levy, while useful, are not sufficient to assure appropriate housing supply and affordability. Public bodies should engage with private holders of urban development land to ensure the delivery of affordable housing and sustainable development. A range of mechanisms—such as joint ventures; land readjustment and planning conditions concerning affordability and social infrastructure—can be used to ensure delivery. The credible possibility of public purchase of urban development land at less than its full development value changes the dynamic of the land market, even where such powers are rarely used. It ensures that all actors take planning seriously.
The uplift in land and locational value, arising from infrastructure investment and urban development, can help to fund strategic infrastructure, particularly sustainable public transport. The report describes the way in which Transport for London uses its land assets to create and share value in key locations, supporting new provision of affordable housing, investment in transport infrastructure and urban regeneration. Ireland should use such locational value mechanisms as part of a broader approach to funding and financing infrastructure.
Notes to Editors
The report will be published at 00.01 on Thursday, 17th May 2018.
The report was circulated to Government departments and noted by the Cabinet at its meeting on Tuesday, 15th May 2018. The full report and the Executive Summary will be published on www.nesc.ie.
For further information please contact Larry O’Connell;
The report addresses a number of challenges identified in the Government’s strategy Project Ireland 2040. These include provision of affordable rental and/or owner-occupied housing for a growing proportion of the population and a sustained increase in the level of investment in public infrastructure.
In developing this report the NESC Secretariat prepared two background papers: International Approaches to Land Use, Housing and Urban Development and Land Value Capture and Urban Public Transport. Building on this work, in February 2018 NESC organised a workshop on international approaches to active land management, housing affordability and use of various instruments to fund infrastructure. It featured expert speakers from the Netherlands, Austria and the UK, and was attended by senior actors from government departments and agencies, as well as a representative from each of the pillars on the Council. The learnings both from this workshop and subsequent Secretariat communications with the international experts are reflected in the final report.
The report also builds on the four reports on housing and land agreed by the Council is recent years Social Housing at the Crossroads: Possibilities for Investment, Provision and Cost Rental (2014); Homeownership or Rental: What Road is Ireland On? (2014); Ireland’s Rental Sector: Pathways to Secure Occupancy and Affordable Supply (2015); and Housing Supply and Land: Driving Public Action for the Common Good (2015).
About the National Economic and Social Council (NESC)
The National Economic & Social Council (NESC) was established in 1973. NESC is an expert advisory and consultative body, focusing on strategic economic, social and environmental policies. It analyses and reports to the Taoiseach on challenging policy issues and addresses the public system and the institutional challenges related to implementation, monitoring and learning. It is chaired by the Secretary General of the Department of the Taoiseach. The members of the Council are appointed by the Taoiseach, for a three year term. They are representatives of business and employers’ organisations, trade unions, agricultural and farming organisations, community and voluntary organisations, and environmental organisations; as well as heads of Government departments and independent experts. The Council has published 145 agreed reports on a wide range of policy issues, as well as research papers by its professional Secretariat and other experts.
To view the full report click here
To view the executive summary click here
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