Fianna Fáil Spokesperson on Housing Barry Cowen TD says new figures he has obtained from NAMA show the extent of hoarding of residential land which is greatly exacerbating the housing crisis.
Deputy Cowen revealed today that NAMA has sold land since 2011 which is zoned residential and has the capacity for over 50,000 new houses or apartments.
However, despite the unprecedented demand and persistent under-supply in the market, just 7% of potential units are under construction.
In response to the figures which for the first time give a geographic breakdown of the potential sites, Deputy Cowen commented, “This is a national travesty and a result of Government housing policy and deference to international investors.
“We know that the cost of land is a key determinant holding back new construction. Despite this the Department of Finance is incentivising investors to sit on sites and not to develop them through the Capital Gains Tax exemption for lands bought prior to the end of December 2014 and held for seven years.
“As you can see from the figures, hoarding of these sites is particularly acute in some counties, such as Cork where less than 1% of potential sites are being developed.
“In many counties with large urban areas and high housing demand, such as Waterford, Galway and Limerick there is essentially no construction at any sites sold by NAMA debtors.
“This problem is compounded as many sites are still not serviced by infrastructure. This shows that the €50 million allocated this year by Government via the Local Infrastructure Housing Activation Fund (LIHAF) for servicing new sites is completely insufficient and has been almost wholly taken up by a small number of sites in Dublin.
“Most investors that bought sites off NAMA are sitting on them and waiting until they appreciate in value until the end of the 7 year period when they can claim their capital gains exemption. The earliest date that properties acquired in the relevant period can qualify for the exemption will be 7th December 2018.
“Land Hoarding is clearly holding back supply. Fewer than 18,000 new units will be built this year, including just 4,000 apartments, when we need in region of 50,000 to make a dent on affordability, rent and price inflation.
“I am calling on the Government to reduce the holding period on these sites to four years, which will allow investors the opportunity to sell these sites now rather than in 2018, 2019 and 2020.
“I also strongly believe that a new Site Tax is required to encourage the use of empty sites. The Government’s Vacant Site Levy, which will not take effect until Jan 2019, is nowhere near strong enough to discourage land hoarding in a growing market,” concluded Deputy Cowen.