Chairman of the County and City Management Association’s committee on housing and land-use, Frank Curran, yesterday said that ceilings imposed by the Department of Housing in 2021 on how much councils could spend on housing construction need to be reviewed.
This comes as an Oireachtas committee were told that new social housing projects risk being jeopardised unless authorities are allowed to pay developers more.
Addressing the Oireachtas housing committee Mr Curran said that “construction price inflation is a real issue”, adding that fewer contractors were tendering for public housing contracts, while projects where contractors were already on-site faced incompletion as local authorities could not meet spiralling costs.
He commented that, “You have the construction price inflation, but allied to that you have material supply chains issues; you have a skills shortage – wet trades in particular, but all skills within the construction industry. And then you have a buoyant private sector construction going on at the moment as well, which is competing with the public sector”.
According to Eddie Taaffe of the Local Government Management Agency’s housing delivery co-ordination office, over the last six months there has been a reduction in the number of tenders submitting for public works contracts. He said these were seen as “risky because of the price variation issue”.
This was pertinent to smaller contractors in rural counties that had good relationships with local authorities and typically build developments of fewer than 20 homes. “They are type of contractors who seem to be less able to absorb the price increases and they may well be the ones that will suffer the most in this.”
In Taaffe’s view, delays in accessing building supplies adversely impacted these developers too, as contracts were taking longer to complete.