Developer bonds for housing
Deputy Brassil asked for legislation or guidelines on bonds required of developers to advance housing projects, saying inconsistent and lengthy bond demands were blocking development. The Minister responded by discussing funding and planning certainty for major projects, arguing the new planning process was intended to improve certainty.
With reference to the programme for Government and dealing with the housing crisis, does the Government have any plans to introduce either legislation or guidelines on the provision of bonds for developers to proceed with the building of houses? I am aware of situations where some local authorities are looking for a bond based on the value of the contract. Others are looking for that but are adding a time limit, with some as long as five to seven years. This is making it practically impossible for the developer to get the bond to build the house. This is an issue and, as Deputy Lowry mentioned earlier, creates red tape and difficulty around getting jobs started.
The Minister mentioned an €18 million announcement this morning for 56 houses in O'Devaney Gardens. That equates to €320,000 per unit. The cost of building needs to be reduced and this forms part of that issue.
Comment on this
There are a lot of site works required for the O'Devaney Gardens project so I would not simply divide the money by the number of houses we are building and make deductions from that. It is a much broader project that will probably involve the expenditure of a couple of hundred million euro. There will be some 600 multi-use and mixed-development units, including mixed-tenure units, involving both public and private money.
On the financing of projects, one of the reasons we are changing the planning decision making process for large applications is to get much more certainty into the decision making process, which has a direct impact on the ability to get finance. No bank in Ireland will put any financing into a project unless planning permission has been granted. We are also putting a fund of approximately €200 million together through the Irish Strategic Investment Fund to help developers finance infrastructure on site. Further, the State will probably announce next week where we will spend €200 million of public money on infrastructure to connect sites in order to get them moving. We are doing a lot on the financing side. If there are other innovative things we should be examining in terms of issuing bonds, I am happy to receive the detail on them.