Cork Chamber: Action needed to make apartment living viable and affordable

The aim of creating homes for 25,000 people in Cork Docklands will remain “a vision on paper only” if Government does not take action to make apartment living viable and affordable, the CEO of Cork Chamber has said.

Conor Healy was speaking following the publication of a report co-commissioned by Cork Chamber and the Construction Industry Federation (CIF) aimed at identifying solutions for the viability of apartment development in Cork and across the country.

The culmination of the research, carried out by KPMG-Future Analytics, identified five recommendations Government should implement published in the report entitled 'Addressing the Viability and Affordability of Apartment Development in Our Cities'.

These are the reduction to the rate of VAT on residential construction activity to 5%; the creation of an Urban Housing Investment Fund; the utilisation of the Urban Regeneration and Development Fund; implementing a minimum tax depreciation of 4% per annum for apartment developments as well as a call for private investment in the Build-to-Rent (BTR) sector and Private Rental Sector (PRS) to be recognised as businesses for gift/inheritance tax purposes.

“We’ve been highlighting this issue consistently since our 2019 report on apartment viability and the situation has worsened considerably,” Mr Healy said.

“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, Partner at KPMG, said the recommendations in the report are “feasible, can be delivered on and can make a real difference”.

“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,” he continued.

In Cork, no new private apartment schemes of scale have been completed since 2008.

Conor O’Connell, CIF Director, Southern Region, said a focus on private development in parallel with social and affordable housing is crucial in tackling the country’s housing crisis.

“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,” he said.

Paula Cogan, President of Cork Chamber, said as we begin to emerge from the Covid-19 pandemic high-density city living will be key to economic recovery.

“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.”

The report can be viewed in full on the Cork Chamber website.