More imagination needed to solve the housing emergency
One- and two-bedroom apartments under construction by CAIRN in Douglas, Cork. The recently announced reduction in the minimum size requirement for apartments and other deregulations to increase the number of allowable units per core proves that the Custom House is listening to expert and experienced advice from the construction industry. Picture: Larry Cummins
When the Government declared covid-19 an emergency, bureaucracy was set aside and targets were achieved in recognition of the common good. No matter how well-intentioned the Government is about solving the housing crisis, it will require a collaborative approach as effective as addressing the pandemic.
While the recently revised National Development Plan (NDP) announcement of enhanced infrastructure investment, including over €30bn of investment in housing, is to be welcomed, a more imaginative approach is needed. At this stage, given rising homeless figures at over 14,000 - including 5,000 children - the need for housing is an emergency and should be declared as such.
It’s now time for all stakeholders to put their shoulder to the wheel including senior civil servants, local authorities, communities and citizens.
There seems to be a sense in Government that only 35,000 new homes will be built per year, even though it has increased annual housing targets to 83,000. The pent-up demand of around 151,000 units in the National Planning Framework (NPF) is underestimated in comparison to those projected by the Housing Commission with a shortfall of up to 250,000 units identified.
The NDP's revised aspiration of 300,000 new homes over the next five years will only be achieved if radical steps are taken. It is important to deal with the core issues impacting further supply of housing, in particular a lack of available zoned land for construction.
Up until 2014 there was always a supply of land where builders could buy and sell zoned land with planning. Since the core strategy of finding sufficient zoned and serviced land to cater for future housing demand was implemented in 2014 and incorporated into the NPF in 2017/18, zoned land has been artificially constrained to the point that this market is non-functioning.
Nature abhors a vacuum with almost the entirety of available zoned land purchased by investment funds and the Land Development Agency (LDA). This has resulted in small and medium-sized indigenous builders being forced to reduce output and increasingly going out of business due to an inability to acquire adequate sites.
This is a key contributing factor as to why national target outputs are not being reached. To increase output as envisaged, there needs to be a functioning land market as existed pre-2014 where agents had a supply of this type of land and builders could purchase.
There is also the innate loyalty and stickability of the Irish domestic builder: the same cannot be said of developments funded by foreign capital. Having excess amounts of land zoned doesn’t translate to bad planning – allowing badly planned development on zoned land causes bad outcomes.
In recent years, the Office of the Planning Regulator (OPR) has overseen the dezoning of land, much of which was serviced, based on a flawed NPF reliant on out-of-date ESRI model of future demand. The OPR’s role must transition to one of ‘implementor’ - facilitating and overseeing domestic Irish construction companies throughout the country to build housing estates of 50-150 homes creating employment throughout various regions and rural Ireland.
Indeed, in this capacity they can also oversee the necessary construction of large apartment complexes in cities and large towns, while also facilitating high-density compact housing estates on the periphery of cities and satellite towns. But while kickstarting smaller apartments is necessary to meet housing targets, encouraging a proportionate number of larger homes should also be considered to accommodate families.
No further dezoning should be permitted without proven and solid grounds. What chance do large, medium or small developers have in securing funding for purchasing and building on serviced zoned land when the local authority, at the instruction of the Planning Regulator, can withdraw that zoning without notice.
Funders or developers cannot operate in such a business environment. Lands dezoned in recent years should be rezoned by each relevant local authority. This, coupled with prioritised water and electricity supply schemes, would increase availability to build several thousand houses in the short term.
Many housing developments are subject to Local Area Plans (LAPs) several of which have expired and therefore cannot be relied upon. Preparing masterplans is expensive and time consuming leading to planning application submission delays up to 12 to 18 months. This process needs to be streamlined and prioritised and LAPs need to be fast-tracked.
Apprentice training schemes mentioned in the revised NDP are of course welcome, however, in the immediate term availability of trained personnel is not the problem. Recent lay-offs by indigenous companies points to this with others stating they are operating well below capacity. Reduced local authority levies and other costs within the State’s control would be more effective, particularly in the short-term.
The cost of building is also having a damaging impact on further vitally-needed supply. Dublin is the second most expensive city in Europe to build apartments with the cost of delivering a two-bed apartment around €600k in Dublin, and €460k to deliver a three-bed house. Ireland now has the second highest proportionate housing expenditure in the EU.
Several Government initiatives have been introduced to address these costs including the Croi Conaithe Cities Scheme, First Home Equity Scheme, and the Help to Buy scheme among others. However, these demand-side subsidies have not had the desired impact and therefore need to be enhanced including a recalibration of the caps set for the First Home Equity and the Help to Buy Schemes, respectively, and allowing the payment support of the Croi Conaithe Cities scheme to be made upfront.
The recently announced reduction in the minimum size requirement for apartments and other deregulations to increase the number of allowable units per core proves that the Custom House is listening to expert and experienced advice from the construction industry. More needs to be done to reduce the gap between construction costs and what can be achieved in the open market.
By adopting the same collective approach as has been done in the recent past to address the most pertinent issue facing the State, only then will this current crisis be averted.
- Dr Garry Keegan is a former Dublin City councillor, former ESB board member and recently published . He has worked on infrastructure and housing development projects over the past three decades.
