Efforts must be made to cut the number of legal challenges to new housing, but local communities’ support for projects should not be undermined, the Economic and Social Research Institute (ESRI) has said.
In a big review of housing in the Republic of Ireland, Northern Ireland and the rest of the United Kingdom, the ESRI said the shortage of construction workers is affecting supply in each jurisdiction.
On the need to reduce legal challenges, the ESRI said judicial reviews of developments in the Republic “can add between €10,000 and €20,000 to the cost of an individual home”.
“The ease with which individuals or third parties can appeal housing plans in Ireland has contributed to a significant share of homes stuck in the planning system,” it said, adding that challenges are “holding up” nearly 15,000 homes.
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“While the importance of community engagement and buy-in should not be undermined, efforts must be made to reduce the frequency of these challenges,” it said, because of the “uncertainty, risk and costs” added.
Objections can be made by anyone under the Republic’s rules. Nearly a third of applications take longer than four months, nearly a sixth are refused and appeals take longer than five months.
Speculation on land in the Republic should be better regulated, it suggested, since it adds significantly to costs. Prices should be tracked and compared in a public register too.
Outlining the scale of the challenge facing each administration, the report records that the State is bidding to build 33,000 homes annually, Scotland 110,000 by 2032, with 180,000 a year pledged in England.
In Northern Ireland, the Department for Communities’ Housing Supply Strategy committed to building more than 100,000 homes from 2022 to 2037, nearly a third of which are to be social housing.
However, too many official voices are involved in Northern Ireland housing planning, it suggested, since 11 local councils have their own desires which often are “misaligned” with regional planning needs.
Scotland has opted to increase the number of local authority homes, while England has focused on home ownership and below-market rents, with slightly below-market rents available from housing associations.
The Republic and Northern Ireland, meanwhile, have sought to make home ownership more affordable, but both have set a 30 per cent social housing target among new builds.
Extra supply has different effects on prices in each jurisdiction. Housing supply in the Republic will grow more strongly as prices rise, followed by Northern Ireland, while higher supply does not have the same effect on supply in England.
Extra houses on the market will have “a deflationary impact” on prices in the Republic, but less so than what happens in England, Scotland and Wales markets, though Northern Ireland reacts least of all.
“Across all regions, increases in housing supply sees house prices decrease, although the result is quite small in Northern Ireland. Scottish house prices are the most responsive to changes in housing supply,” the report says.
The Scottish system of selling houses should be examined, it said. There, most properties are sold through a “blind bidding” system where a minimum price is set and interested buyers make sealed bids.
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“The highest bidder gets the sale and is informed on the same day. This is arguably a more efficient manner for determining prices than in other markets,” the research body said.
Dealing with the number of vacant homes in each jurisdiction would offer a “short-term” boost to supply with 161,433 homes deemed vacant in the Republic; 1.5 million in England, 120,000 in Wales and 114,000 in Scotland.
However, need outstrips potential supply everywhere: England, for example, needs 442,000 houses each year over the next 25 years, rather than the 300,000-a-year target that has been set, and which is not being met.
Construction in the Republic is more expensive, partly because Irish plans have higher minimum specifications, including the highest minimum floor space requirements for apartments anywhere in Europe.
Higher costs in the Republic are partly explained, too, by a lack of design standardisation, but also stricter requirements and higher expectations about design.
The shortage of construction workers is “particularly acute” in Britain and Northern Ireland because of Brexit, but both the UK and Ireland need to find ways to hire new people and encourage older workers to return to building sites.
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