The European Commission has approved a €450 million scheme to support the construction of apartments to be sold to owner-occupiers in Ireland.
The money will back construction of four-storey apartment blocks in the urban areas of Dublin, Cork, Galway, Limerick and Waterford in line with Ireland's objectives of compact urban growth and social cohesion.
These areas face an acute shortage of housing supply and a high number of non-activated planning permissions, due to the higher development cost of apartments compared to the actual sales price, the commission has said.
The aid will take the form of a direct grant covering the difference between the actual price and the development cost of the apartment (the so-called ‘viability gap'), up to a certain maximum amount depending on the city.
The scheme will be open to developers of apartment blocks that hold non-activated planning permission and demonstrate the existence of a viability gap.
Beneficiaries will be selected following a selection procedure based on a number of criteria, including the residential density and the proximity to essential facilities, such as supermarkets, healthcare and education.
The commission assessed the measures under EU State aid rules, for economic activities under certain conditions.
The commission found that the measure is “necessary and appropriate to ensure housing supply for sale to owner-occupiers in the targeted urban areas in line with the Irish objectives of compact growth and social cohesion”.
The decision will be made available under case number SA.102927 in the State aid register once confidentiality issues have been resolved.