LAND hoarding is making the Limerick housing crisis worse with only 44 housing units of a potential 3,000 being built on sites sold by NAMA in the city and county.
Highlighting the extent of land hoarding in Limerick, Fianna Fáil TD Niall Collins said that figures he obtained from NAMA clearly shows the extent of hoarding of residential land which, he says, is greatly exacerbating the housing crisis.
Deputy Collins revealed that since 2011, NAMA has sold residential zoned land in Limerick that has the capacity to accommodate 3,005 housing units yet just 44 are under construction.
Nationally, lands with a capacity to accommodate more than 50,000 new houses or apartments have been sold, yet only 3,670 are under construction.
This means that less than 1.5 per cent of housing units that could be built are being built.
“This is a national travesty, especially in Limerick, 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.
“Hoarding of these sites is particularly acute in some counties, such as Limerick where less than 1 per cent of the sites are being developed.
“In many counties with large urban areas and high housing demand, such as Waterford and Galway there is essentially no construction at any sites sold by NAMA.
“This problem is compounded as many sites are still not serviced by infrastructure. This shows that the €50 million allocated this year by Government through 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 at the end of the seven-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 December 7, 2018”, Deputy Collins explained.
“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 vacant site levy, which will not take effect until Jan 2019, is nowhere near strong enough to discourage land hoarding in a growing market,” he concluded.
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