Irish Water needs an extra €2bn a year to extend plumbing links to new house builds
The government must increase its capital allocation to Irish Water by €2 billion a year to accelerate critical water infrastructure projects, allowing for more homes to be built, the Treasury Department has been warned by the construction industry.
The massive surge in funding is vital if the government is to cope with growing housing, climate and infrastructure crises, says a senior leader in the construction industry.
The magnitude of the challenge facing the country in terms of transport, energy and water was further underlined by the ‘code red’ warning to humanity in last week’s major UN climate crisis report.
The government is under enormous political pressure to resolve a housing crisis that is escalating out of control. According to new estimates, the country needs 50,000 new homes every year.
But the Construction Industry Federation’s pre-budget submission to the Ministry of Finance, seen by the Sunday Independent, confirmed that despite a surge in early summer starts, only 18,000 new homes will be built in 2021 — half of the government target and 3,000 less than last year.
In her contribution, construction industry Secretary of the Treasury Paschal Donohoe warns that huge new investments in water are essential to achieve a substantial increase in housing supply.
“In some locations, it’s pretty obvious that less than two years’ supply of maintained and zoned land is available for development,” the entry warned.
It also includes a set of requirements to put the housing market in order, including for a new equity plan and a requirement that the Central Bank allow rental history to be taken into account as part of the mortgage assessment criteria used by lenders.
CIF CEO Tom Parlon told the Sunday Independent he remained concerned about the number of housing projects being held up by court assessments, and said a review of planning laws was vital.
But Parlon added that without more investment in water infrastructure, none of the other measures could work.
“If we don’t have water and wastewater connections, housing plans cannot go ahead. Irish Water needs to be solid and definitely needs more money,” he said.
“But it has to be tied to very strict delivery targets – because right now it’s very, very slow and difficult to get water to projects.
“But you can’t just click your finger and get water, and the fact that we’ve made some old decisions about not charging for domestic water means the only way we can afford this infrastructure is if the Treasury is pumping more money into Irish Water.”