The Land Development Agency (LDA) is on track to see its output of new homes more than double next year to 2,000, before ramping up to 3,500 a year by 2027, as the agency evolves to delivering more homes on State land, according to its chief executive John Coleman.
That would see it bypass publicly-quoted Glenveagh Properties and Cairn Homes to become the main developer of homes in the country. Still, there is an element of double counting as the two current largest housebuilders in the country have business lines constructing units on behalf of the LDA under its so-called Project Tosaigh schemes.
The LDA delivered 992 homes, mainly apartments, last year, with 700 coming from Project Tosaigh deals with private developers. The remainder came from cost-rental, affordable purchase and social housing on State-owned land at the Shanganagh Castle Estate in Shankill, Dublin 18.
The agency, established in late 2018, estimates it will mature to a stage where half its output next year will come from construction on taxpayer-owned land, rising to majority direct delivery in 2027.
“You have seen the LDA and approved housing bodies stepping in to address a gap in the market for apartment building in recent years,” he said, noting that there had been a “market failure” as mainly overseas money that had previously flooded into the private rental sector (PRS) largely evaporated since 2021 amid spikes in interest rates and construction costs.
Industry observers also say that rent caps – with increases for pressure zones limited by the rate of inflation, or 2 per cent, whichever is the lower – have played a major role in putting off private investment. Taoiseach Micheál Martin signalled in February that the rent cap system may be changed, or even removed, this year.
Mr Coleman said the LDA’s Project Tosaigh initiative, unveiled in 2021 to unlock projects on private land, allowed it to accelerate delivery at an earlier stage than would have been possible for an agency setting up from a standing start.
The LDA has a pipeline of about 20,000 homes on State land and entered into contracts for a further 8,000 on private land, of which 6,000 have either been completed, are being built or close to being contracted for construction, he said. The second round of Project Tosaigh, launched last year, involves the LDA buying the underlying land and contracting builders to construct, with the purchase funds held in escrow and released once certain targets are met.
He said the LDA would keep “an open mind” on whether it will initiate further rounds of Project Tosaigh.
“It really depends on whether the PRS market comes back,” he said. “To be clear, we are not trying to compete against the private sector. We are trying to work with the market, rather than against it. It would be very favourable if the private rental sector came back, because we ultimately target different markets.”
The LDA head insisted that the agency does not compete against approved housing bodies (AHBs) on forward purchase or funding deals.
“Everything goes through the central funnel of the Department of Housing, so it simply wouldn’t be entertained,” he said. “If we are told, ‘Well, an AHB is bidding me a higher price, do you want to match it?‘, then we simply walk away. That has happened with some smaller, less sophisticated developers. But we haven’t gotten involved in any of those situations.”
Mr Coleman said the LDA has only stepped in to buy one asset outside of the Project Tosaigh process – an apartment complex in Cookstown, Tallaght, in 2023. “That was a unique example. Construction had commenced, but the bidder had pulled out – resulting in a potential distressed scenario, where the project could have stagnated,” he said.
“Everything else has broadly not started by the time we enter it,” he said, adding that there are some exceptions where better-funded builders might start a project, and willing to take the risk, knowing they are negotiations with the LDA as part of Project Tosaigh.
On the direct delivery front, the LDA is currently finishing out its Shanganagh project, involving a total of 597 homes. It is also in the process of constructing 266 homes at the former St Kevin’s Hospital in Cork, 219 units under the first phase at the former Devoy Barracks in Naas, Co Kildare, and 543 homes in St Teresa’s Gardens in Dublin’s south inner city. It started construction works at Clongriffin in north Dublin, where 408 homes are planned.
