Today the government announced a new Construction 2020 Straegy for Ireland – the full report can be found here.

The strategy is to be welcomed in that we’ve needed an overarching strategy re. construction, property and housing for some time.  It’s also good that it is wide in its remit, covering all the main areas.  It seems to me the strategy is about four things:

1.  creating a strong and sustainable construction sector
2.  producing new jobs and getting construction workers back to work – the plan is 60,000 by 2020
3.  Creating sustainable planning and communities
4.  dampening down the cyclical nature of property development

In other words the ‘Strategy aims to ensure that necessary and sensible development can take place, and that it is not held back by unnecessary obstacles.’  It sets out 75 action points, quite a few referring to initiatives that have already been announced previously, though the strategy does tie all the stuff together into a roughly coherent whole.

The question is whether these action points are going to address the various problems and issues.  At present, this is difficult to tell, because a lot of what the document sets out is a roadmap for finding solutions rather than providing solutions.  At one level this is good – we need well thought out solutions.  At another level it isn’t so great because we should have done the strategising a few years ago and now we’re trying to play catch-up whilst various forms of crises continue to play out around us – mortgage arrears, social housing waiting lists, rising prices, weak supply in some areas, oversupply in others, etc.  The report is full of proposed new committees, task forces, review groups, consultations.  Here’s a list of some:

  • will propose a new national planning framework
  • will publish a general scheme of a Planning Bill, along with a new Policy Statement on Planning, to implement the planning recommendations of the Mahon Tribunal and other planning concerns, and to establish an independent planning regulator.
  • will create a Housing Supply Coordination Task Force for Dublin
  • will produce a comprehensive strategy for Social Housing, setting out a vision for the sector.
  • will undertake a review of Part V of Planning and Development Act
  • will review Special Development Zones planning with the aim to streamline and speed up process
  • will explore mechanisms for private financing and greater use of Public Private Partnership models for infrastructure procurement
  • will engage with the banks, NAMA and other interested funding providers to ensure the availability of sufficient development finance
  • will create a High Level Working Group chaired by the Department of Finance will be established to explore the issue of sustainable bank financing for the construction sector.
  • will increase our engagement with the European Investment Banks (EIB) and European Investment Fund (EIF) in developing and implementing mechanisms designed to maximise the provision of financing to SMEs, including in the construction sector.

As it stands then, we have few concrete recommendations with respect to any of these things.  These need to be set up asap and to do their work quickly.  Ideally they will also be dealt with in some kind of a holistic way and not in isolation from each other.

There were a few concrete actions.

  • National Pensions Reserve Fund (NPRF) is to become the Ireland Strategic Investment Fund (ISIF) with a mandate to invest on a commercial basis to support economic activity and employment in Ireland.  Work with IDA and others to invest in offices/infrastructure.
  • A tenancy deposit protection scheme will be provided in law this year
  • Regional Planning Guidelines that co-ordinate local authority plans will be replaced by more broadly based Regional Spatial and Economic Strategies from 2016, with inputs from LAs, key infrastructure and economic development agencies

They are also proposing greater certainty and flexibility in planning:

  • flexibility around overall densities will be considered.
  • changes to existing planning permissions – though only after public consultation
  • streamlined planning process for certain types – ‘repeat’ or ‘change of house type’ applications – and also for appeals
  • enable local authorities to introduce a ‘use it or lose it’ provision with respect to land zoning to reduce land speculation
  • vacant site tax – examine the possibility for enabling a local authority, should it wish to do so, to adopt measures that incentivise the use and development of vacant sites
  • legislate for and introduce a registry of options on land for development purposes to ensure market transparency

Some issues seem to be in a holding pattern.

  • Homelessness – Mentions setting up of Homelessness Oversight Group and aim to eliminate homelessness by 2016 but gives no indication of how that will be achieved, esp. in light of rising homelessness levels.
  • Unfinished estates – no new policy just continue with Site Resolution Plans;

The strategy sets out then a roadmap for getting to actionable initiatives, rather than setting up many new initiatives.  It does not set out many concrete actions but rather proposes a roadmap for dealing with construction and property issues.  There are proposals for lots of task forces and reviews, some tinkering with existing legislation but no radical overhaul, but not a lot of new concrete, strongly cash-backed initiatives – schemes mentioned in the strategy are all relative small sums of money or restate existing public capital expenditure plans (which are a fraction of pre-crash levels).

What would have I liked to have seen?  I would have preferred something a bit more holistic, rather than trying to frame a whole bunch of stuff as a coodinated plan.  Personally, I would have started with a new NSS/NDP and worked down from there.  I think it would have been useful to be more proactive in setting out options re. financing.  How to get finance into initiating construction seems to be largely missing beyond saying the government will talk to and encourage NAMA, EIB, EIF, ISIF (Ireland Strategic Investment Fund) to make finance available and look at issues.  I would have liked the government to be a bit more proactive in terms of initiating and driving funding, seeking ways to increase public capital expenditure.  The strategy announced €200m of new investment into the various property related areas, but this is a tiny amount of funding vis-a-vis the issues that need to be addressed.  Hopefully when all these various task forces and committees report, suitable budgets and means of financing can be attached to the action points, otherwise they’ll remain just that – action points, rather than actioned items.

Rob Kitchin

 

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