The residential housing targets and guidelines set out in the National Planning Framework, the government document outlining how Ireland will develop over the long-term to 2040, are "fundamentally flawed" and will only "exacerbate the housing crisis," according to Savills Ireland.
The property advisor's 2022 Residential Land Supply Study posts that the National Planning Framework is based on flawed population growth projections, and that land de-zoned by local authorities in recent years could have been used for more than 100,000 homes.
The study also shows that just four homes per 1,000 people in Dublin were built last year compared to 16 per 1,000 in 2006, prior to the global financial crisis.
Speaking at the publication of the study, Savills Ireland director of research John Ring (pictured above), said the reduction in the supply of zoned residential land, attempts to divert growth from Dublin, a focus on capping rather than boosting housing supply, unrealistic delivery timelines, and rigidity around development sites were the primary impediments created by the NPF.
“Ireland’s residential housing market is already fraught with challenges and problems, but if we can’t get things right at a national level, then the trickle-down effect of these mistakes mean we are destined to fail no matter what resolutions we may find to the building and development issues," Ring said.
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"The focus on compact urban development at the heart of this strategy is a laudable and necessary objective if we are to achieve our climate change objectives, whilst also avoiding the legacy of urban sprawl that characterised the Celtic Tiger period.
"However, in the midst of a housing crisis, we must ensure that our goals are achievable rather than aspirational.”
The research reveals that the reduction in zoned residential land available for development in the greater Dublin area (Dublin, Meath, Kildare, Wicklow) would have had the capacity for some 113,000 homes, or equivalent to a ten years of supply.
Ring said the timing of the reduction in land zoned for residential use was a "further hurdle" to an already challenging construction market, adding to planning uncertainty and making it more difficult to underwrite planning risk and dissuading investors.
Material and labour shortages also continue to drive up the cost of construction, along with rising borrowing costs, detracting from the viability of schemes at a time of economic volatility, with Ring arguing that development uncertainty has never been higher.
The study takes issue with local authorities' assessment of estimated housing requirements based on "unlikely" population growth projections, with Cork, Limerick, Galway and Waterford allocated to grow by over 50% in the plan, more than double the expected rate of growth in Dublin.
"Economies of scale and resulting agglomeration effects in sectors such as tech are leading to a strengthening, rather than a weakening, of Dublin. Incoming foreign direct investment will not consult the goals of the NPF when deciding if and where to locate in Ireland," Ring said.
"The majority will continue to go to Dublin where the talent pool is deepest. In this context, utilising the unrealistic 50:50 population projection results in a large reduction in the GDA housing target to 12,000 per annum, compared to the 22,000 per annum identified within the preceding National Planning Guidelines 2006-2022, and means we are structurally under provisioning housing supply in the Dublin region for the next twenty years.”
Savills say that the quantum of land zoned for residential development contained within the various development plans is too little to realistically deliver the required housing, even at the low targets prescribed by local authority Housing Need and Demand Assessments.
The NPFI contains a maximum zoned land headroom allowance of just 25% over the quantum required to deliver on the HNDA target output, down from 50% in the previous planning guidelines.
It also relies on the vast majority of sites being fully developed within the time period of a development plan despite obstacles such as inflation, labour shortages and the cost of finance, according to Ring.
Finally, the NPF states that 40% of new homes must be built on brownfield sites, which Savills argues are more expensive to develop due to logistical and environmental factors, generally being smaller in scale, and legacy ownership structures that complicate delivery.
"If we really want to plan properly, the councils would need to put in place a system where they can reasonably ascribe a probability for each site such that an overall projection of likely supply is achievable within the timeframe of a plan," Ring said.
"For the councils, this would require additional resources that are currently not at their disposal. The reality is that many of these brownfield sites are not going to proceed for a variety of factors as they are not economically viable, thus ensuring housing delivery targets are missed in the coming years.”
“By having a public policy perspective that is based on desires rather than reality, as we currently have, we are planning to fail. We can alleviate the current housing crisis and properly plan for Ireland’s housing needs, but these impediments must first be addressed.”
(Pic: Getty Images)
