Construction BUSINESS

A recent independent assessment has unveiled a daunting challenge for Ireland’s housing sector – the cost of delivering social homes for those in need has surged to €35 billion. This staggering figure represents a €6 billion increase in just two years, warns a paper from the Oireachtas’ independent Parliamentary Budget Office.

The escalating costs are now perilously close to becoming “unsustainable,” prompting concerns that the state may be compelled to lean even more heavily on the private sector to meet its mounting housing needs. The report emphasizes that despite a decrease in the overall number of people requiring State housing support, a substantial spike in construction costs has led to this unprecedented financial demand.

According to the Parliamentary Budget Office (PBO), constructing social homes for all those with an “ongoing need” in 2022 would require an investment of €35 billion. This marks a significant €6 billion uptick from the 2020 figures, adding strain to the state’s financial resources. The PBO notes that specific household types still face persistent challenges in securing secure, long-term housing.

The report sheds light on the ongoing housing crisis, stating that 116,886 households were deemed to have an ongoing housing need at the end of 2022, accounting for at least 241,425 individuals. The criteria for an ongoing need include households on the social housing list and those receiving the Housing Assistance Payment (HAP).

While there was a reduction of nearly 5,000 households from the figures in 2020, most of the decline came from local authority lists. Wayne Stanley, Executive Director of Simon Communities of Ireland, cautions against interpreting a fall in HAP numbers as a sign of reduced demand for housing support. He stresses the importance of the state significantly intensifying construction efforts to prevent an increase in homelessness and mounting pressure on the rental market.

Stanley notes that the government’s target of 9,100 social homes for 2023 may not be sufficient to keep pace with demand, advocating for a more ambitious goal closer to 15,000 homes annually. Sinn Féin housing spokesperson Eoin Ó Broin suggests a comprehensive assessment that includes HAP and Rental Accommodation Scheme (RAS) tenancies for a clearer picture of Ireland’s social housing needs. He asserts that the financial capacity exists within the state to meet the necessary levels of social and affordable home delivery. The challenge now lies in the commitment to ramping up construction efforts in the years to come.