RIAI Pre-Budget Submission 2021

RIAI calls on Government to align fiscal and planning policies in Budget 2021 to unlock housing delivery in towns and cities

• Changes to planning policy has led to increased housing densities in planning permissions being granted; the RIAI is calling for a full review of fiscal policy to ensure these permissions deliver much needed new housing
• Investment in architectural services in our public sector is required for a high-quality built environment

The Royal Institute of the Architects of Ireland (RIAI) launched its pre-budget submission, calling on government to use Budget 2021 to accelerate the delivery of housing in cities, towns and villages.

The RIAI submission contains recommendations for Budget 2021 across two key policy areas:

• Using fiscal policy to unlock the delivery of sustainable compact housing
• Investment in technical expertise to achieve greater quality in the built environment

Using fiscal policy to deliver compact growth

Recent changes in planning policy have led to a significant increase in the number of apartments granted planning permission. In 2019, permissions granted for apartment developments exceeded those granted for houses for the first time. However, analysis done by the RIAI shows that delivering effective urban development remains unviable for most residential sites in Ireland. Apartments cost more to construct than houses for a number of reasons such as up to 20% of an apartment building being needed for stairs and lift access, balconies costing more to deliver than gardens and higher ‘per square metre’ costs due to regulations such as increased fire protection measures. 

However, while upfront delivery costs of compact growth are higher, all other public costs, such as environmental impact, public transport, services & infrastructure, are lower, reducing the public investment required.

To support sustainable growth of compact cities, towns and villages and reduce urban sprawl, the RIAI is calling for a review of the fiscal rules and the holistic costs to the State of housing delivery, including the taxation income generated per site area correlated to the costs to the State of infrastructure, services, public transport, and environmental impact.

Claire McManus, RIAI Council Member and Spokesperson on Housing, said: “Compact growth is a core goal of Project Ireland 2040 and includes all types of housing that can be delivered in existing cities, towns and villages, and benefits from the existing amenities and infrastructure. It is about creating more attractive places in our cities for families of all sizes to live and work. However, currently the delivery of compact growth only happens where corresponding sales prices are high, to cover the greater cost to complete. The data shows us that there is little compact development outside of areas of high residential values. So, while the number of apartments being constructed is on the increase, it is not increasing inline with permitted developments and the output is mainly units in more expensive locations.

To unlock affordable compact housing delivery, the viability of developing within our towns and cities needs to be addressed. Building apartments in infill sites will always cost more than building houses in green fields*. Fiscal policy, particularly taxation, should be used to support the delivery of homes for all and ensure that there is compact housing growth within our cities and towns. Government has the power to use taxation to drive the construction and delivery of more sustainable housing in our urban centres, where other costs are much lower, e.g. environment, infrastructure & community facilities. For example, if VAT was charged by site area this would result in a lower VAT rate for apartments and other types of compact developments. We are asking government to review the holistic costs of housing delivery and address this anomaly.” 

Investment in architecture to achieve quality in the built environment

The RIAI proposes:

1. Investment in architectural services in the public service is required to ensure the delivery of a better built environment and to ensure that the use of public funds in delivering projects is as effective as possible.
2. The current top VAT rate on professional services of architects should be reduced to the minimum permitted by European regulation, to support homeowners who wish to retrofit their properties obtain the correct professional advice.

Kathryn Meghen, RIAI CEO said: “RIAI architects create the places and buildings that support our society and economy, bringing buildings and public places from inception to completion. We see a close correlation between the well-being of our people and the quality and sustainability of our built environment. The pandemic and resulting public health restrictions, have had a huge impact on both the mental and physical health of the nation. We now interact with our homes in a different way – homes have become offices, schools, and gyms in recent months - and have developed a newfound appreciation for our public green spaces. Key to delivering quality homes and buildings, infrastructure and public realm will the availability of the professional expertise within the public service – architects are needed at senior levels across both central and local government.”

The full RIAI Budget 2021 submission is available here.

Editor’s Note:

*An 83sqm apartment costs 1.4 times more to deliver than a 100sqm house, but in 2019 the median apartment price was 1.15 times lower than the median house price.