How to bypass infrastructure roadblocks
Lack of critical infrastructure is a major roadblock to residential development in Ireland, and is an impediment to both the commencement and progression of projects. While there are other debilitating factors, such as cost of materials, County Development Plan reviews, and Judicial Challenges, infrastructure deficits continue to be the main reason why it is so difficult to achieve this country’s housing targets as demanded by our growing population and encapsulated in government strategies such as the ‘Housing for All’ plan.
The infrastructure deficits I refer to are usually one of the following:
Waste Water Treatment Capacity
Waste Water Network Capacity
Availability of Water Supply
Ring Road or Relief Road
Roundabout
Access road through multiple land owners to service zoned lands
Bridges
Rail Overpass or Underpass
These infrastructure projects are usually too costly for one developer to fund. Therefore, they require cooperation from other developers in that location who are ultimately in competition with each other. Additionally, this can lead to a type of stalemate or “first mover syndrome”, where no one developer will begin work on a piece of infrastructure necessary to the housing developments of multiple other nearby developers, as they will risk being left to fund it themselves. This can lead to a situation where there is no activity on residential development sites.
HISCo was established by the National Treasury Management Agency and Cork County Council. It reduces the risk for individual developers by providing the infrastructure required to complete residential development.
Many local authorities are recognising the opportunities presented by the HISCo Business Model and are examining methods to ensure there is no accusation of double payment by Developers when Development Contributions are being paid. Local Authorities are trying to be as innovative as possible as they play their part in ensuring that the speed of delivery of much needed homes is increased dramatically.
Irish Water, which plays an intrinsic role in the delivery of residential units, has limited resources to deliver much needed services throughout the country. It struggles to do this alone in the short to medium term. HISCo can service areas not included in Irish Water’s Capital Investment Programme, and may even be able to solve short term infrastructure deficits while they focus on longer term solutions.
HISCo will eliminate the site servicing challenge by funding these infrastructure projects for developers. The company works with the developer(s) to calculate a fee per housing unit based on the total cost of the infrastructure project, and will then wait to be repaid for as long as it takes to sell each house.
While acknowledging that off-site infrastructure represents the biggest challenge to residential development, HISCo will also consider the delivery of on-site infrastructure.
By recognising and taking advantage of the opportunities presented by the HISCo business model, you can play your part in ensuring the delivery of much needed homes faster and in line with demand.