Build Homes NI, which represents Northern Ireland’s largest house builders, has welcomed the findings of a public consultation which has rejected proposals for developer contributions towards wastewater infrastructure.
Over 60% of respondents to the Department for Infrastructure consultation did not support the idea of a new levy.
Build Homes NI said the proposed levy would have the “opposite effect intended” and would reduce house building, increase costs for home buyers and distort the housing market. The group described the proposal as a “regressive water tax” on new home buyers.
Paul McErlean, Build Homes NI’s Director, said: “Homelessness in Northern Ireland is at a record high with house price and rent inflation among the highest in the UK. The solution is to build more houses, but the flawed proposal for a new levy will have the opposite effect. It would make house building more expensive and reduce rather than increase the supply of housing.
“Given the sharp fall in margins for house builders in recent years, developers would have to pass any additional costs onto home buyers. The levy would become a de facto regressive water tax on new home buyers.
“It is deeply unfair that new homebuyers should be singled out to pay for infrastructure that everyone benefits from. Given that many new homebuyers also tend to be younger and on lower incomes, it is doubly unfair that they should be targeted.”
Mr. McErlean added: “The fundamental problem is Northern Ireland Water’s broken funding model and its £2bn funding gap. As the consultation itself acknowledged, developer contributions won’t address this issue.
“Wastewater is a civic good that benefits all of society. Instead of tinkering around the edges of the wastewater crisis, we urge the Executive to consider a fairer and more realistic approach that at least begins to address systemic failures in our infrastructure and how we fund NI Water.”
Build Homes NI expressed concerns that the levy would distort the housing market by making lower priced starter homes increasingly unaffordable to build. New projects focused on more expensive higher-end private developments would become relatively more viable given the greater ability of better-off buyers to absorb additional costs.
Build Homes NI also argued that as part of the solution to the wastewater crisis the Executive should be encouraging rather than discouraging new house building. Unlike older housing stock with antiquated sewage designs, new housing developments use less fresh water and relieve pressure on wastewater treatment plants by redirecting stormwater away from them.
Of the 293 responses to the consultation 62% of respondents disagreed with developer contributions, 30% agreed and 8% neither agreed nor disagreed. The results were presented to the Infrastructure Committee earlier this month (12th November). Departmental officials confirmed that the consultation findings would now be considered by the Infrastructure Minister.
In June the NI Chamber of Commerce, the NI Federation of Housing Associations and the Construction Employers Federation produced a Joint Position Paper outlining potential solutions to the wastewater crisis. The report suggested that the investment shortfall could be met by the average domestic rate bill increasing by £1.95 per week, the equivalent of a bottle of natural spring water.
As reported by PA, NI Water’s CEO Sara Venning advised the Infrastructure Committee that the provision of water and wastewater services in Northern Ireland is currently on a “knife-edge”. She added:
“Without proper investment in the publicly owned water and wastewater infrastructure, Northern Ireland risks insufficient drinking water during hotter, drier periods and a continued stop on applications for wastewater connections for housing and for economic growth.
“The wastewaster system in Northern Ireland will continue to pollute because when existing connections exceed the capacity of the network, pollution is inevitable because we can’t stop receiving their wastewater.”
