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Developer Michael O'Flynn said construction companies are looking at innovative solutions and building methods because of the shortage of skills.
Developer Michael O'Flynn said construction companies are looking at innovative solutions and building methods because of the shortage of skills.

Cork needs a plan for now, not just the future

CORK needs a plan for the here and now, not just the future, according to Cork developer Michael O’Flynn.

Speaking to the Evening Echo, Mr O’Flynn said he is optimistic about the future of Cork, and that action is needed to ensure the region takes full advantage of plans coming its way.

The National Planning Framework, Ireland 2040 and other plans are all opportunities for Cork if it is not hindered by various obstacles such as the boundary changes and local elections, according to the developer.

“Cork, as a region, has to take full advantage of the National Planning Framework and the development which is being allocated in its direction,” he explained.

“No business, region, county or country can operate on just a future plan,” he added.

 Building up: The Elysian tower, built by the O’Flynn group, was completed in 2008. More than a decade on, building similar high-rise structures is viewed as a viable way of tackling the housing crisis. Michael O’Flynn backed building up — but said that building out should remain an important part of strategy. Picture: Dan Linehan

Building up: The Elysian tower, built by the O’Flynn group, was completed in 2008. More than a decade on, building similar high-rise structures is viewed as a viable way of tackling the housing crisis. Michael O’Flynn backed building up — but said that building out should remain an important part of strategy. Picture: Dan Linehan

“At this moment in time, we have a future plan but no current plan that is capable of being implemented and I think it’s incumbent on both local authorities and the government to help us bring forward viable housing schemes at affordable prices.

“How could anybody object to that?” he asked.

A major part of his own proposed current plan, Mr O’Flynn explained, surrounds legislative change in relation to Strategic Land Reserves (SLRs) which could provide an opportunity for more affordable housing.

In a recent submission to government, the Cork developer suggested a policy that would allow land in SLRs to be easily re-zoned for housing if a viable development plan is in place.

Cork has several SLRs around the city’s suburbs and commuter belt.

“I put forward a proposal to the government that we should not zone more land,” said Mr O’Flynn.

“We should deem land zoned if the landowner, a developer and a local authority can come up with a business plan for that land that is affordable and produces product at a price the developer can build immediately.

“The SLR model should be adopted by slight legislative changes to enable landowners who would like to deal with a developer, at prices that would work for all concerned, especially the end consumer,” he added.

“The land is there but we need change and leadership from the government to make it happen.

“It is my firm belief that some housing, viable for the developer to build and affordable for the consumer to buy, will come into play very quickly if this change takes place.

“If we don’t get the legislative change, we’re not going to get the houses in Cork, that’s it.

“We can either face up to the fact that we want Cork to grow and have houses for our people, or we end up in a situation where we have a very good future strategic plan for Cork which is just not viable for a number of years.”

One thing that may impact the allocation and development of SLRs is the boundary change, slated to come into effect in May 2019. Cork County Council has already designated a numnber of SLRs.

“The boundary change is going to affect housing in the short and medium term,” he explained.

“Most of these SLRs, which is really alternative zoning on what would be future zoning locations, are now going to end up in the city,” he added.

Mr O’Flynn explained that, while the city seems to favour the brownfield model, which involves land or premises that has been previously used, but has subsequently become vacant or derelict, these SLRs pose a conundrum for City Hall.

“The city is going to be faced with the challenge: do we stick to our existing policy on brownfield sites or do we immediately embrace development on these strategic land reserves?” he said.

“I’d be calling on the city to urgently and in advance of the transfer, look at these SLRs and sit down with the development community and help enable development on them.

“Otherwise, we will not be competitive, we will not have enough housing and this will impact on jobs in this region,” he warned.

Boundary Change Issues

The boundary change has already and will continue to, make progress difficult, according to Mr O’Flynn.

He said it makes it difficult for either local authority to strategically go forward until one has given up the land and the other has taken it on.

“Even having done that, it’s going to take time for the new city area to bed down given the city’s existing strategy towards what it has been for so many years,” he added.

“The scale of the new city is going to be extremely challenging for the city itself.

“In the National Planning Framework, we have a lot of future development here in Cork that has to happen,” explained Mr O’Flynn.

“Unfortunately, there is a predominance towards brownfield development. A lot of brownfield development in the Cork city area is either not viable, in the overall docklands which needs strategic infrastructure, or is still held in ownership that is not ready to bring it forward for development.

“I think it’s a big challenge for us.”

The new city area is the key to bringing forward the development of housing and offices in Cork, explained Mr O’Flynn, who added, however, that the transfer process will be difficult and complicated.

“We also have local elections coming up in May and the impact of that.

“We have to urgently deliver a product that is viable on the side of developers and that’s affordable on the side of the consumer,” he said.

“At this moment in time, apartments for example in and around Cork city are not viable for us to build and if we did build them, they wouldn’t be affordable for people at the other end.

The only alternative to Dublin — but are we ready?

“Cork has the opportunity to do a lot and, as a region, is the only real alternative to Dublin,” said Mr O’Flynn.

“However, because of the changes involved in local authorities, I don’t believe Cork is in a ready state to take this on.

“I’m very positive about this region but I’m very anxious that, despite knowing boundary change would bring challenges and drastic changes, it did call for strategic interim measures, which I don’t think there has been enough focus on,” he added.

While he said development has not come to a standstill since the boundary change was announced, Mr O’Flynn said we could be doing more.

“We could be doing a lot more in terms of providing affordable housing I believe.

“The answer to that is not on zoned land,” he explained.

“The prices being paid for this land does not allow us to bring forward a viable and affordable product.

 An artist’s impression of some of the 600 homes planned for Ballinglanna in Glanmire. The development from O’Flynn is one of the biggest planned for Cork at present.

An artist’s impression of some of the 600 homes planned for Ballinglanna in Glanmire. The development from O’Flynn is one of the biggest planned for Cork at present.

“I have no interest in buying land that I can’t develop immediately because that’s just taking land out of the system,” he said.

“Unfortunately a lot of the land which has been sold in the past year even has been sold at prices which means it can’t be developed until prices improve or costs come down.”

Relaxing the macro-prudential rules by the Central Bank would have a positive impact on house prices and therefore, a positive effect on supply, explained Mr O’Flynn.

Specifically, he said that the current cap on lending rules of 3.5 times total income should be increased.

“They’re too strict,” he said.

“I’m not suggesting a free-for-all; I just believe the multiplier for salaries should be 4.5 rather than 3.5.

“It is 4.5 in other countries like the UK,” he added.

“Some of those other countries are fortunate enough not to have VAT on new properties as well, while we have 13.5% here.

“It’s illogical that the government have not looked at the cost base.

“While I accept there might be short-term benefits in terms of profits, if the VAT was reduced even on a temporary basis, it would have the effect of bringing more product into the market as it would become more viable for developers and more affordable in the long run for purchasers.”

Possible Impact on jobs

Mr O’Flynn explained that, while Dublin’s current commuter-reliant system is far from ideal as a sustainable development model, it does offer something Cork cannot at this moment in time.

“In Dublin, people can keep commuting to and from surrounding counties and areas, which is not ideal in a planning world or sustainable development model,” he said.

“But at least they have the opportunity and option to commute from Meath, Kildare, Wicklow and more.

“In Cork, we don’t have development in these outlying areas so the metropolitan region has to step up in terms of the provision of housing that will enable new jobs to be located here,” he added. I’m really concerned that this is not going to happen any time soon and if that’s the case, we’re going to be impacted on the jobs front.”

Building Costs and Skills Shortages

Building costs and a skills shortage in the construction sector are two more barriers to building that need to be addressed, according to Mr O’Flynn.

“Building costs aren’t going to come down and we have serious challenges on the skills side,” he said.

“A lot of companies, including ours, are looking at innovative solutions and building methods because of the shortage of skills.

“We’re looking at more off-site construction techniques, be they modular steel or timber based products, that will enable us to build houses quicker, more efficiently and meet the rigorous standards that are there today,” he added.

“Some of the older block-based methods are not the way forward and shouldn’t be for the future.”

While he admitted there are barriers to wide-scale building in Cork and further afield, Mr O’Flynn was keen to put forward solutions, both short term and long term, to ensure Cork can develop.

Building up or out?

Building up has been touted as the way forward in urban developments.

Mr O’Flynn said that, while this should be Cork’s long-term plan, there is nothing wrong with building out for now.

“Building up seems to be the future strategy that we all need to think about for cities,” he explained.

“At this moment in time, if we’re going to rely on a build up strategy, we won’t have building in Cork or we’ll just have offices but not apartments.

“Now we have to build out as an interim strategy before we build up in time,” he added.

“We have to supply housing for young people who are being consigned to the rental market with ever-increasing rents and no possibility of getting on the housing ladder.”

“I also think that, while everyone is for city centre development, suburban office development has served us well,” said Mr O’Flynn, citing examples of business estates he built at Ballincollig and Eastgate.

“We shouldn’t work on the basis that the only way forward is the city centre.

“If you have out of town business parks as well as in the heart of town, you have people going both directions, not just flocking to the city centre.

“I’m all for the city centre doing the maximum and reaching its potential but I’m also pragmatic enough to realise that the city centre has build cost challenges, especially in the area of apartments,” he added.

“They just make it impossible; this situation needs to be faced up to.

“Our city and our suburbs have to develop. We have to make sure the infrastructure develops in tandem with that.

“It’s not a question of not developing for fear of choking the infrastructure because Cork would be going nowhere if that policy was adopted.

“So we have to put up with some congestion now until some of the strategic changes around Dunkettle, Little Island and the future North Ring Road are brought into play.

“Interim measures need to be put in place so that Cork has a current plan in relation to housing and apartment delivery that works.”

These measures, or any others, will not work without more land coming on stream for developers, according to Mr O’Flynn.

“A lot of the land that I see being sold at high prices are presuming apartments or houses are built with price inflation factored in,” he said.

“That really concerns me and that’s why I would like to see more land put into the system immediately that would have an overall impact of reducing the price of land and therefore reducing house prices.

“The biggest factor of house prices currently is the land element,” he explained.

“It has become disproportionate to around 30 or 40 years ago when the land element was always at a percentage that enabled affordable housing.

“The land element today is not in that place and people are saying that there is enough zoned land.

“If there was enough available zoned land, it wouldn’t be selling at the price it’s selling at.”

Shared Ownership Model

As well as more land, Mr O’Flynn said he would favour a return to the shared ownership model which offers prospective homeowners the chance to buy a percentage of their home first before eventually buying it outright.

“There should be designated affordable housing on some of the new land ideas that I’m putting forward,” he revealed.

“I think as well that we should go back to a shared ownership model so that if people can’t afford a house, but they can afford 70% of the house, they’re helped onto the housing ladder and in time, buy out the remaining share.

“It could be a local authority or government structured loan,” he added.

“What we can’t do is keep increasing Housing Assistance Payments (HAP) and really fudging the problem that we’re not building enough social, affordable and private homes.

“The economics must be clinically assessed and changes made to make housing more feasible.”

Mr O’Flynn described the current homelessness situation in Ireland as a shocking indictment of our society and one that must be addressed.

“The lack of social housing is a direct result of not having strategic policies to build target numbers every year because everyone thought the private sector was going to somehow, magically deal with that in its developments,” he explained.

“Of course, when the private sector went down, everything went with it and there was no social housing development.

“In addition to social housing we need affordable housing and we have to be realistic about what people can afford,” he added.