More fast-track planning won’t fix dysfunctional housing market

News that the Government is planning to bring an early end to the Strategic Housing Development (SHD) planning application system comes as no surprise.

It was one in a long list of reactionary policy measures by Fine Gael-led governments over the past decade to try and solve the housing crisis that has failed to substantially move the dial.

Established in 2017 by then housing minister Simon Coveney as part of the Rebuilding Ireland plan, it was due to expire at the end of the year. It allowed developers seeking permission for 100-plus residential units or 200-plus student bedrooms to bypass local authorities and apply directly to An Bord Pleanála for planning.

Its introduction followed a lengthy and ultimately successful lobbying campaign by the property industry.

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The fast-track system was supposed to speed up the delivery of housing, reducing from 18 months to six months the time it takes to get a scheme approved and shovel ready.

In reality, the scheme has failed to deliver due to understaffing at An Bord Pleanála, which was unprepared for the volume of applications it would receive, and legal challenges initiated by residents who were alarmed at the size and scale of many of the developments that were proposed for their neighbourhoods.

While 508 potential housing units were affected by judicial reviews in Dublin in 2019, the figure jumped to 5,802 last year

The latter issue was exacerbated by the effective removal of height caps by Eoghan Murphy, Coveney’s successor as housing minister, which encouraged developers to go big with their applications. Many of them were simply out of scale for their suburban locations.

Some of the applications also breached local development plans, with local authorities often among the objectors to schemes. Even when permission was received, developers were often slow to begin construction work.

In an evaluation of the SHD process published by a Government-appointed review group in September 2019, it was noted that the “activation rate” on schemes where permission had been granted was less than 60 per cent. It described this as “less than might reasonably be expected”.

Legal challenges

In a speech to the Dáil on April 21st this year, Róisín Shortall of the Social Democrats said that of the 110 SHD projects in the Dublin region that had been granted planning permission since 2017, construction had started on fewer than 30 per cent of the sites.

Legal challenges became a major obstacle in the past 18 months. In February, The Irish Times published the findings of a report by construction consultants Mitchell McDermott, who outlined the spike last year in the number of potential SHD units in Dublin that were either quashed or held up by judicial reviews.

While 508 potential housing units were affected by judicial reviews in Dublin in 2019, the figure jumped to 5,802 last year.

According to the FP Logue Solicitors, which monitors SHD applications, there had been applications for 12,761 units considered by An Bord Pleanála in the first half of 2021.

Only 8,572 were granted permission but of this figure, some 4,151 or 48 per cent were subject to a judicial review. That’s 16 schemes stalled out of the 28. Judicial reviews were adding 12-18 months to the process, according to the firm.

The housing market is arguably more dysfunctional now than it was four years ago

The system hasn’t worked for any side. Developers have complained about spending a lot of time and money submitting applications that then go to judicial review and fall down on minor technical issues, forcing them to go back to the drawing board. Residents living in areas impacted by the planning applications complain that local democracy has been subverted.

The housing market is arguably more dysfunctional now than it was four years ago. Just this week estate agent DNG said house price inflation was running at its highest level since 2017. Prices were 11.1 per cent higher nationally and 9.4 per cent higher in Dublin last month compared with June 2020.

Time limits

To resolve the issues around the SHD system, the Government is reported to be planning to replace it with a process that would restore the role of local authorities for large developments and introduce time limits for making decisions – accelerating the process to a maximum of 32 weeks.

So it is going to replace the failed fast-track system with an even speedier process. Needless to say it won’t work for reasons that are blindingly obvious.

In a statement yesterday reacting to news that the SHD process was going to be replaced, Property Industry Ireland director David Duffy said: “Any replacement process should incorporate the many positive elements contained in the SHD process such as time limits and early engagement with the local authority and An Bord Pleanála.”

That sounds like code for amending the judicial review system in order to curb the number of court challenges to permissions. The Government needs to tread carefully here.

Building more homes, at a price that makes them affordable for first-time buyers, is a national imperative. But curbing the ability of people to object to schemes in their local areas for the benefit of property developers will not sit well with voters, particularly in Dublin. And Fianna Fáil is already in the doghouse with the city’s electorate.