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NAMA to provide 50% of Dublin housing over next 5 years
The delivery of housing in Dublin received a boost with the news that NAMA is to enter the housing market in the capital. NAMA have said they can deliver up to 22,000 throughout Dublin over the next 5 years, which would fulfil 50% the capital’s requirements. NAMA will do this through a combination of capital, an investment of €3bn and the use of land banks already in their portfolio.
This is good news for the construction industry as it should kick start construction in the Dublin area and will be a major help in addressing the acute housing supply shortage across the capital. It was also suggested that the initiative could create 14,000 jobs along with a further 4,000 indirect jobs provided.
The CIF welcomes this new direction for NAMA. It is positive news and it could make a major different to boosting the level of construction activity in the capital.
However, it is imperative that all of those construction companies capable of fulfilling these projects are considered for any finance and tenders that arise from NAMA. It would be a major cause of concern throughout the industry and the wider economy if NAMA were to only award these contracts to those who have been involved in the NAMA process. That would be anti competitive and a short sighted approach.
There are companies who have avoided any dealings with NAMA to date. These companies have the required expertise and are well placed to deliver excellent quality housing projects. It would be wrong not to consider these companies simply because a past relationship did not exist.
This year will see no more than 2,000 housing units completed in the Dublin area, and while this is an improvement on last years figure of 1,360it is still a long way short of the market demands. It’s estimated that Dublin requires approximately 8,000 – 10,000 new units per year, based on its demographics.
Immediately NAMA have identified North Lotts, the IFSC and Grand Canal Dock for development with the intention of turning the area into a new business and residential district similar to Canary Wharf in London, Boston’s Seaport and Singapore’s Marina Bay. The area is earmarked a Strategic Development Zone and therefore fast track planning rules should allow work to start quickly. Having this fast track in place will be useful for this area, but if NAMA is to achieve its target then fast track planning will also have to be extended to other areas.
NAMA have set themselves an ambitious target in 22,000 units. If they are to reach that target then they will need to ensure that the current problems in the planning process are addressed.
At the moment there is planning permission for 30,000 housing units in Dublin. But 21,000 of those units are apartments. While apartments are in demand in certain parts of Dublin – the city centre for example – if we are to build enough housing then we need to convert some of those permissions from apartments into more family friendly units.
The current planning process requires a builder or developer to resubmit their application for planning permission and begin the process again. This can be a long, drawn out process with no guarantee of a successful outcome. In essence the process acts as a disincentive to generating more house building.
Thankfully, various actions in Construction 2020 are aimed at improving the planning process, including measures for kick starting development and streamlining the planning process. We believe these actions will have to be implemented to ensure that sufficient housing is built in Dublin over the coming years and NAMA is to meet their target.
The CIF will be working with the Government and NAMA to ensure that these actions are brought forward and implemented. There is a lot of concern about delivering sufficient housing for Dublin at the moment. If we are to solve that issue then we need to fix the problems that are preventing more houses from being built.