The Government has today launched a €500m scheme that will see developers handed up to €144,000 for every apartment they build.
The Croí Cónaithe scheme offers subsidies to developers of properties that have planning permission but have yet to move on to the construction phase.
The inflation crisis has sent construction costs soaring in recent months and the Government has said it needed to step in because the developments “cost more to build than they can be sold for to individual buyers”.
Officials hope the scheme will see an extra 5,000 apartments built in Ireland’s five main cities in the coming years.
Opposition parties have labelled the plan “insane” and insisted it amounts to a “direct subsidy for developers”.
So how will it all work?
In order to access the scheme, employers will have to prove there is a ‘viability gap’ – meaning an apartment block would cost more to construct than the market sale price.
The apartment blocks must be:
- Located in the cities of Dublin, Galway, Cork, Limerick or Waterford.
- Four storeys or higher and contain at least 25 homes per hectare.
- Close to public transport.
- For sale to owner-occupiers only.
- Fully approved by planning authorities.
- Not already under construction.
The Government said there are around 70,000 un-commenced permissions in the five cities, with 40,000 in Dublin alone.
Some €500m has been set aside for the scheme - €450m for the delivery of up to 5,000 apartments and €50m an upcoming scheme in smaller towns.
The Government said building more homes in towns and cities is a key Housing for All objective that will “help to tackle climate change, reduce vacancy and dereliction, and help to meet the strong demand for urban living”.
The finished apartment can only be purchased by people who intend to live in them as their normal place of residence.
Each person can only buy one apartment constructed with the support of the scheme.
They will be sold at market prices set down by independent quantity surveyors and valuers appointed by The Housing Agency.
It is hoped the first apartment constructed through the scheme will come on the market in 2024 and 2025.
The level of funding provided for each apartment block will be based on the viability gap for each apartment.
The Government expects each one to receive a maximum of €120,000; however, up to €144,000 will be available in certain cases.
The Government said each application will be ranked based on:
- Date of delivery
- Delivery cost
- Proximity to core services and amenities
The scheme is now accepting proposals from developers with the closing date set at 5pm on Tuesday June 21st.