-Cork Docklands, City and Urban Accommodation Vision Is Unviable & Unaffordable-
-Viability and Affordability of Apartments Remains Unresolved by Government-
The housing crisis in Ireland requires immediate intervention with a focus on private development in parallel with social and affordable housing. In Cork no new private apartment schemes of scale have been completed since 2008. As long as viability and affordability of apartments remains unresolved by Government the delivery of new urban communities will remain a pipe dream.
The same story is playing out in cities nationwide, requiring immediate Government action. The Cork Docklands plan aims to accommodate 25,000 people and 29,000 jobs yet the delivery of apartments is currently unviable. A KPMG-Future Analytics report says tax and funding-based interventions must be put in place to stimulate the development of apartments as has been in done elsewhere in Europe.
The recent announcement of Urban Regeneration and Development Funding of €400m for Cork has instilled great confidence for the future, but unless the issue of apartment viability is addressed in the short-term the city will be compromised. Delivery of urban homes is critical to investor confidence, talent attraction and city vibrancy. If we do not deliver on our housing commitments, our global competitors will steal a march as we move on from this pandemic.
Cork Chamber, the CIF Southern Region & KPMG-Future Analytics today publish research that identifies ways to make apartment development in urban areas viable and affordable. The report proposes five recommendations;
Reduction to the rate of VAT on residential construction activity to 5%
Creation of an Urban Housing Investment Fund
The utilisation of the Urban Regeneration and Development Fund
A minimum tax depreciation of 4% per annum for apartment developments
Private investment in BTR/PRS to be recognised as businesses for gift / inheritance tax purposes
Conor Healy, Cork Chamber CEO said “We’ve been highlighting this issue consistently since our 2019 report on apartment viability and the situation has worsened considerably. To deliver on Ireland 2040 and the National Planning Framework 25,000 people must live in the docklands alongside 29,000 new jobs, but it will remain a vision on paper only if action is not taken to make apartment living viable and affordable. 95% of Chamber members, support time bound tax interventions to stimulate apartment construction. We are calling on Government to implement the findings of this critical report in the forthcoming Housing For All strategy and Budget 2022.”
Michael Lynch KPMG Partner said: “It is clear from our analysis of the Irish and international markets that countries which recognise and act on the issue of viability can deliver apartment communities in urban centres. It is essential that non-fixed costs such as tax and access to capital are resolved to bring momentum to this sector. Our five recommendations are key to unlocking this potential.”
Conor O’Connell CIF Director, Southern Region said: “With housing delivery falling short of demand, and a stark gulf between planning approvals and actual construction, the need to enable apartment development has never been greater. Housing delivery must strike a balance of social, affordable and private and in modern society it is clear that this blend must include substantial numbers of apartments.”
Paula Cogan, President of Cork Chamber said: “Our members have a vision for Cork as a thriving, welcoming, diverse and sustainable city region. If we do not deliver significant volumes of accommodation on brownfield sites in the heart of our city, then we are confining ourselves and future generation to replicating the 20th century model of sprawl. If we do not create a positive legacy in our built environment we are failing our future generations.”