In a recent letter to Rachel Reeves, the UK’s chancellor of the exchequer, 40 economists, including four Nobel Prize laureates, wrote: “History shows you will not end homelessness or deliver new homes on the scale you have promised solely through planning reforms and the private market.”
In 2024, Ireland’s Department of Housing was lobbied some 757 times, or three times every working day, often looking for precisely these things: planning deregulation and market supports.
1. The ‘more land’ myth
First up, land and the need for more. In 2015, a Department of Housing analysis showed that county councils had enough zoned and serviced land for 414,000 houses. Since that research, about 195,000 houses have been built, and not all on that land; some land has been dezoned, and more land zoned.
Even then, concerns were being raised about pressure to rezone more land, planners noting that: “The knee-jerk reaction to zoning land has to be watched. If you allow housing in fields, where will children go to school? It’s not just about zoning housing.”
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So, do we need more zoned and serviced land, especially with more than 70,000 houses and apartments with planning permissions granted but never built, with many of these sites having been profitably sold numerous times in the interim?
Verdict: much more scrutiny required
2. The ‘housing at scale’ myth
The idea that we should deliver only housing at scale is worth examining. There are two large-scale housebuilders in Ireland and a small number of other large developer-builders. Fifteen were recently selected to work with the Land Development Agency. Relying on a relatively small pool of large suppliers is risky and doesn’t foster competition.
There are, however, tens of thousands of SME construction companies, many of which struggle to participate in government schemes, who can’t get finance to build even from State agencies such as Home Building Finance Ireland (HBFI), established to lend to SME and other builders.
Our well-capitalised banks are not lending, and HBFI interest rates are in line with market lenders (ie expensive) which is of limited use to SMEs. Instead, it is reported that “large, well-connected and influential firms dominate the list of developers that have received loans from the taxpayer-funded HBFI”.
Much like we need large engineering firms and one-person operations, a spectrum of housebuilders is needed to tackle the sites that large builders or agencies will not develop.
Verdict: scale only gets us so far
3. The ‘more supply’ myth
The idea that the answer to rising house prices is simply more supply gets a regular outing. Yet, studies from the Central Bank and the Bank of England, among others, show supply plays only a minor role in house-price reductions. Equal and more important factors are demographics, wages and especially interest rates.
Our reliance on the market for private and now also social housing means supply is volatile and variable. As the Australian housing economist Cameron Murray notes: “Markets optimally time housing development out of the pool of feasible sites”; they don’t exist to meet political housing targets. Ministers, therefore, have no control over the majority of housing output each year.
Annual completion targets are moot anyway given there is only enough water supply for 35,000 new homes per year for the immediate future.
Supply reliant on the market means the State is dependent on high prices and rents stimulating housing output. It also explains why housing policy never reduces prices and why the taxpayer has to foot the bill subsidising house purchasing (and profits) with schemes such as Help to Buy.
There is currently much talk about the funding of thousands of new apartments, but as Irish Planning Institute president Gavin Lawlor highlighted, no talk of their affordability.
Supply as a silver bullet is a narrative that looks for love in all the wrong places.
Apparently, judicial reviews are holding up very large quantities of housing. In fact, less than 5 per cent of housing with planning permission is under judicial review. From January 2024 to date, developers and landowners have taken 30 per cent of all judicial reviews, the general public taking 50 per cent and 20 per cent by others, including local authorities.
Judicial reviews contest the decision-making process, not the merits of the application.
Countries that value public participation in planning have far fewer legal problems getting developments approved. Ireland is the third-worst country in Europe for participation, so it is no surprise issues become legal. The new Planning and Development Act further attempts to prevent public participation, which will lead to further legal challenges, which will lead to further lobbying and more botched policy solutions which will eventually need more remedial legislation.
Verdict: judicial reviews for housing are largely yesterday’s news
4. The ‘planning problem’ myth
Planning is a complex, multifaceted policy area, easy to criticise as a barrier to development. There are undoubtedly issues with the planning system, such as over-complexity and lack of certainty of outcomes. Most of this could be solved by government, especially with more resourcing (councils are still short 350-400 planners).
Risk and uncertainty are also caused by poor planning applications (eg bedrooms with no natural light) and ones that routinely ignore county development plans. The development lobby itself regularly seeks policy changes in their favour from Government Ministers keen to placate the market. Such demands introduce more jeopardy, stall development until a potential change is confirmed, and don’t make housing any cheaper.
More fundamental problems with planning are: its consensual nature, meaning there is no requirement to build on grant of planning (there are 50,000 unbuilt housing units with planning in Dublin according to Housing Agency data analysed by the Dublin Democratic Planning Alliance); and the continuous centralisation of policymaking, away from local democracy and accountability. This is the very opposite of best practice.
Verdict: planning has its issues, but planning responsibly should not be secondary to market whims
5. The ‘We’ve got this’ myth
Finally, governments like to imply that they have a vision of what success looks like and are on top of the situation.
Verdict: generally safe to ignore
Dr Lorcan Sirr is senior lecturer in housing at Technological University Dublin
