5.0 Estimated residential and commercial development for the Scheme

5.0 Estimated residential and commercial development for the Scheme

5.1 Background

It is projected that 72% of the attributable cost to new development will come from contributions for residential development and 28% of the attributable cost to new development should come from contributions for non-residential development. This has been determined taking into consideration the degree to which benefits accrue to both development types.  This 72:28 apportionment is used in the calculation of development contribution amounts for residential units and non-residential built development (see Section 5.4 showing Estimated Yield for Residential and Commercial Development).

It is considered that the majority of expenditure will support existing development and other publically funded programmes. Only that part of the capital expenditure which will benefit new or improved services is used in the calculation of the amounts to be met by the levies on new development.

Explanatory Note: The Capital Programme for 2022-2026 based on the submissions from the directorates of Limerick City and County Council is approximately €99m.  However, this Capital Programme will benefit existing as well as new development.  Given that the capital expenditure will benefit new developments, as well as existing developments, it is assumed that approximately 45% of the projects will benefit through the Development Contribution Scheme resulting in a requirement for €44m charged to new development through the Contribution Scheme.

5.2 Residential

The Development Contribution Scheme Guidelines indicate that the relevant Development Plan Core Strategy should provide the most appropriate basis from which to commence the estimation of the number of housing units expected over the lifetime of the Scheme.

The Core Strategy of the Draft Limerick Development Plan sets an additional household requirement of 12,993 units over the lifetime of this Contribution Scheme, which when adjusted to account for social and affordable housing will result in a need for 10,394 housing units.

In line with the settlement hierarchy of the Draft Plan, it is anticipated that 20% of these houses will be on lands zoned for City Centre, Regeneration, Town Centre use in LAPS and derelict sites and infill sites in towns and villages.  The remaining 80% will be on lands identified as Other in the Scheme.   lt is desirable to encourage new residential development to lands zoned for that purpose in the City, Regeneration and the towns and villages across Limerick and the Development Contribution Scheme Guidelines requires that development is incentivised in these areas. Therefore, a reduced cost is proposed for residential development within these areas.  A higher charge is proposed for dwellings with a floor area in excess of 250sqm.  It is forecast that 8% of the total number of residential units will fall into this category and on average the floor area above 250sqm will be 50sqm.

5.2.1 Estimated Yield from Residential Development

5.3 Commercial Development

The ability to project, in quantitative terms the extent of non-residential development across Limerick given the recent economic climate is difficult. An estimation of the further growth in the commercial sector has been carried out as well as a review of the previous predictions made in the Contribution Scheme of 2017-2021.  The Mid West Regional Enterprise Plan identifies that to meet the projected population growth set out in the Regional Spatial and Economic Strategy for the Mid-West until 2031 there is a need to find a minimum of 20k – 25k additional jobs just to maintain current employment rates.

Nationally it is forecasts that the economy will grow annually by 4.5% in 2021, 5% in 2022 with an annual average growth rate of 3.9% until 2025. Beyond this long-term growth forecasting is difficult however it is anticipated that the annual average national growth rate will sit between 2 and 2.5% from 2025-2030.

The review of the Limerick 2030: An Economic and Spatial Plan for Limerick identifies that 20,300 jobs have been created in Limerick between 2013-2020 and employment in the City and county in 2021 stands at 85,000 people.  This review anticipates that up to 2030, 30,000 new jobs will be created in the City and Environs and up to 12,500 jobs created in the remainder of Limerick.

Based on the above factors an estimation of the further growth in the commercial sector has been carried out.  These projections are based on the estimated job creation set out in the Review of the Limerick 2030: An Economic and Spatial Plan for Limerick” and from consideration of the number of permissions granted by type and number of developments commencement over the last 4 and a half year period

5.4 Estimated Yield from Residential and Commercial Development 2022-2026