Council levy a ‘serious impediment’ for construction

Levies imposed by the local authority for every new home built in Galway City have been branded a “serious impediment” to future development here.
Builders have warned that unless costs in the city under the Development Contribution Scheme – levied on each property when construction commences to fund road and lighting infrastructure – are cut, it will not be cost-effective to begin constructing new homes.
At the moment, around €11,000 has to be paid by builders to the Council on a standard four-bed home – higher than a number of other councils in urban areas.
Local Labour TD, Derek Nolan, has said the city is being punished for being prudent in building houses during the property boom at a time when people now want to move here for job opportunities.
O’Malley Construction – the only company building at the moment in the city – has lobbied all 18 city councillors asking them to consider a reduction in development levies. A spokesperson for the City Council confirmed that a review of the Development Contribution Scheme will get underway next month, and a revised scheme (including revised payments) is due to be introduced in early 2015. O’Malleys told councillors: “Galway City Council currently charges one of the highest Development Contribution rates in the country. This represents a serious impediment to future development within our city.
“House-building is already a costly exercise due to the revised Building Regulations which have recently come into effect, and indeed, the high level of costs is currently causing a shortage of new homes,” the lobbying letter reads.
Deputy Nolan said that while there is a need for levies, they should be lowered. “I can see a big deterioration in the market, because supply is two to three years down the line, and that will lead to huge price increases and rent increases.
“You need to have development contributions, but not at a point where they’re prohibitive. It’s a cost structure that doesn’t allow any houses to be built.”
For more on this story, see the Galway City Tribune.