The overall aim of the Government's package of measures this week was to boost housing delivery in the short-term, by incentivising developers to start residential projects.
According to the Department of Housing, there are an estimated 70,000 to 80,000 non-activated planning permissions across the country.
A longstanding complaint from developers has been that the cost of construction is too high.
What has the Government done?
This week a package of measures, potentially worth over €1bn if all of these incentives are fully utilised, was announced by the Government.
They include the abolition of development levies and water connection fees for a period of time, increases to grants available for vacant and derelict homes, and a commitment to reduce the price of constructing affordable rental accommodation through a State subvention or investment.
How much are grants for vacant and derelict buildings?
There were already grants available to refurbish derelict and affordable houses. The complaint, however, was that they were not sufficient and recent inflation only made matters worse.
The grants were available under a scheme known as Croí Cónaithe. Up until last Tuesday, you could avail of a maximum €30,000 grant to refurbish a principal private residence, provided in was built before 1993.
In cases where a property was derelict, a further €20,000 top up was on offer.
Now, however, a €20,000 increase has been introduced, meaning grants of up to €50,000 for a vacant home are available as are €70,000 grants for derelict houses.
In addition to this, the 1993 cut-off point has been changed to homes built before 2007. A person can also avail of such grants if they are refurbishing a second house, which they intend to rent out.
People who may have already applied for these grants, but have not yet drawn down the money, can benefit from the new rates which will come into effect from 1 May.
The measure has been broadly welcomed. The Society for Chartered Surveyors Ireland, however, has made the point that this money can only be drawn down after the work has been completed. Allowing people to avail of money while the construction is under way would encourage more people to avail of the scheme, the SCSI has argued.
Why is Government offering up to €150,000 to build affordable homes?
This is the most generous incentive that has been announced by the Government, but also the most vague, with finer details of how it will operate yet to be finalised.
Between €500mito €750m has been set aside to incentivise the construction of cost-rental apartments where planning permission has already been granted. This will be provided via the Land Development Agency and other providers.
Rents in such accommodation are at least 25% below the market rate.
The Government has signalled that it is considering offering a subvention of up to €150,000 through a grant. Alternatively, the State may also take an equity stake in such projects. Either way, the aim is to drive down construction costs to incentivise building.
Minister for Housing Darragh O'Brien has said that he hopes 4,000 to 6,000 homes could be delivered through this incentive.
Cian O'Callaghan, housing spokesperson with the Social Democrats, has called for assurances that such accommodation will remain cost-rental forever, given that the incentive offered here is so generous.
On Tuesday Minister O'Brien told reporters that the minimum tenure would be 50 years. However, it's hoped that the majority of these homes will be delivered by the State-owned Land Development Agency, meaning these apartments would be cost rental in perpetuity.
Cian O'Callaghan however believes that directing this money towards local authorities, to build cost-rental accommodation, could be more cost-effective in the long-run and would ensure homes remain as cost-rental throughout their lifetime.
Why has the Government dropped levies for Developers?
The cost of a development levy depends on the area where a house is built. It's not just big developers who pay this charge. Anyone building a house is subject to such levies.
In Dublin city, for example, a charge of almost €114 per square meter applies. A 110 square meter house would therefore cost over €12,500.
Water connection fees can cost tens of thousands for large developments.
By removing these fees, for a 12-month limited period, the Department of Housing believes that developers will be keen to take advantage of the savings before they're gone.
The lifting of such fees took effect immediately after the Cabinet signed off on the measures on Tuesday.
Anyone who commences development within that 12-month period can avail of the waiver, even if the project is not finished within that time frame.
Director of housing at the Construction Industry Federation Conor O'Connell believes that these measures have sent a signal to the industry that these incentives are available, "now use them".
Opposition parties have been stressing the need for savings to be passed on to buyers.
The Department of Housing hasn't imposed any obligation on developers to pass on savings. It's probably worth remembering that the primary role of these incentives is to kick-start dormant projects, not lower prices.
What will the overall impact be?
The Minister for Housing was asked this week to estimate how many extra homes will be delivered as a result of these incentives, but he did not give an overall figure.
Mr O'Brien cited the target for between 4,000 to 6,000 extra homes through the cost-rental incentive. However, he held back from forecasting delivery for the other incentives that he announced.
Many industry experts have also said that it is too difficult at this point in time to predict how the sector will react.
Sinn Féin's housing spokesperson Eoin Ó Broin has been highly critical of the plans, arguing that they contain insufficient detail.
For that reason, he also believes that it's difficult to predict if they'll have a meaningful impact on housing delivery.
He's rather pessimistic however, arguing that they signify a Government "scrambling for ideas".
