The Land Development Agency (LDA) will make only a “minor contribution” to Government housing targets of 50,500 homes per year in the near term, a Department of Finance report has found, sparking a war of words with the agency.
The comments drew a pointed response from the LDA, which said it “disagrees with the assertion that [it] will make a minor contribution to housing delivery”.
In a new report on the State homebuilding agency, published on Wednesday, officials said the LDA had missed its projections for new homes in 2023 and 2024. This required “a catch up in the coming years” to meet its target of just under 14,000 homes between 2023 and 2028.
It said that, having delivered 2,054 homes between 2018 and 2024, “in the near term the LDA will make a minor contribution to the delivery of the target of 50,500 homes per year”.
RM Block
The LDA said it agreed with some elements of the report but hit back saying it had 6,000 homes under construction and it was “likely Ireland’s largest housing producer, public or private sector”.
The LDA has said it expects to see a greater output from 2027 to 2028 onwards, according to the report, which was presented to the Cabinet. The agency said the number of homes in the report “represents the beginning of a programme of delivery that takes some years to develop” as sites are taken through the design and planning process.
It said its annual output will increase to about 3,500 homes annually by 2027.
The report examined the financing model for the agency, warning that the State needed to “consider a refocus of the mandate of the LDA” to where it can have more impact. It called for consideration to be given to allowing the LDA to sell off completed homes, which would allow it generate more cash and, in turn, access private borrowing to wean itself off State financing.
It argued that consideration should be given to enabling the sale of completed homes to local authorities, approved housing bodies or “private market players with covenants in place” governing their future use.
It also said the LDA should consider the private sale of affordable housing and the sale of packages of land it had “assembled and unlocked”.
The report said rapid changes to the mandate of the LDA in recent years had “created challenges for the organisation”. While steps had been taken to mitigate risks caused by the expansion of the LDA’s functions, it said this may be exposing it to additional risks such as “implementation delays, inefficiencies and reputational risk”.
The document also noted that the LDA initially was conceived as selling to the private market but was now solely devoted to delivering social and affordable homes which had resulted in it “being almost wholly reliant on State funding”.
The LDA, it said, had evolved in a way which has had a “dual effect” of “increasing the burden on the State to fund the agency” while also “constraining the options available” to source income from the private sector.
The report argued that making more money available from the State for the LDA would reduce the amount available for investment in water, the electricity grid and transport which are also needed for housing development. “The further allocation of these monies to the LDA will require trade-offs, in short less money for other infrastructure projects”.
Sinn Féin housing spokesman Eoin Ó Broin said the report showed the LDA had “no viable medium- to long-term funding model”. He said it begged the question of “why bother with the LDA at all” as approved housing bodies and local authorities have viable funding models and greater experience of delivering homes.
He said it was “very concerning” that the report suggested the LDA sell off its assets to private investors to generate more revenue, which he called “bizarre” and argued it would push rents even higher.
Elsewhere, Minister for Housing James Browne secured Cabinet approval for another €50 million for housing acquisitions in the second-hand market aimed at helping larger families exit long-term homeless emergency accommodation. The funding will be allocated to the eight city and county councils with the highest numbers of households that have been in emergency accommodation for more than two years in Dublin, and 12 months elsewhere.
