Sir, – It was interesting to read that the Construction Industry Federation agreed with Minister for the Environment Alan Kelly's analysis at least in part, as to the causes of the current house building crisis ("Central Bank contributes to Dublin housing crisis, group says", October 26th).
The chief executive, Tom Parlon, said that it was absolutely right to direct some of the blame to the Central Bank regulations. Unsurprisingly, he didn’t seem to agree with another source of the crisis as identified by the Minister, that of greedy developers. Now both these causes seem to ignore market realities.
However, what is interesting is the speed with which the CIF came to join in the attack on the Central Bank.
Mr Parlon continues, according to the report, to say that his members are currently unable to sell a house for what it costs to build it. This is of course complete nonsense even allowing for VAT, levies, fees, etc. What is really meant is that to sell houses at current market levels there would have to be an adjustment to the expectations of residential site values.
Surely an adjustment in values would aid the profitability of the construction industry, the output of the construction industry and the supply of new housing. This would have a knock-on effect of bringing more affordable rental levels. All would be winners except the current holders of residential development land, who happen to be major paymasters of the CIF.
The low level of Dublin house building will not be dealt with by reducing VAT or levies or by relaxing lending guidelines. Such measures would only serve to increase prices.
The problem has to be dealt with at the supply end, principally the supply of building land.
The Kenny Report on the price of building land has been gathering dust for over 40 years, with only a brief brushing off for the Green Party manifesto in 2006.
It might be too late to simply look back to those recommendations but surely it is not too late for the Government to provide some enterprise and leadership in solving this question.
– Yours, etc,
PETER STEWART
Glenageary,
Co Dublin.