Department of Finance officials advised a lobby group representing institutional property developers and investment funds that reforms of a fast-track planning system would help reduce the number of legal challenges taken against housing plans.
Irish Institutional Property (IIP), which represents a number of large developers, raised concerns over the costs of legal challenges, according to minutes of a February 16th meeting with department officials.
IIP chief executive Pat Farrell warned that the large number of judicial reviews was bringing “additional cost and risk to new housing projects” for developers.
Paul Cotter, Department of Finance principal officer, advised that “this may become less of an issue” for institutional property investors after reforms of the fast-track planning system for large developments, according to the minutes.
The Strategic Housing Development system, which saw large developments (schemes with 100-plus residential units) apply for planning permission directly to An Bord Pleanála, was replaced by the Large-Scale Residential Development scheme. The new route sees developers again apply to local councils, but with time limits set for councils to issue decisions on planning applications.
Mr Farrell said his group’s members “viewed the two biggest risks to continued investment by institutional investors as planning and regulatory”.
The meeting discussed proposals by Dublin City Council and Dún Laoghaire-Rathdown County Council to curtail the development of built-to-rent housing, with Mr Farrell stating draft development plans from both local authorities “will be a negative for the sector”.
A presentation from the IIP to senior officials on February 7th listed a “dysfunctional planning system” as one of several problems facing institutionally-funded property developers. The presentation was attended by the secretaries general of the Department of Finance, Housing, Enterprise and Public Expenditure.
Emails from a finance official setting up the meeting said the briefing would assist the Government’s work on its Housing for All plan. The invitation to brief senior officials said “of particular interest” would be what the IIP viewed as “any risks or gaps” to attracting investment capital needed to hit housing supply targets, the email stated.
The lobby group said risks included a “more negative media and political environment changing investor sentiment towards Ireland”, as well as the introduction of any rent caps, or restrictions on developing build-to-rent housing. When it came to positives about the Irish housing market the presentation noted there was “significant unmet demand”.
IIP told the officials that Irish banks now had “limited capacity or appetite” to extend loans to developers, with hedge funds, private equity funds and sovereign wealth funds stepping in “to take the place of domestic banks”. The presentation and minutes of subsequent meetings were released to The Irish Times under the Freedom of Information Act.
Social Democrats housing spokesman Cian O’Callaghan criticised the “disproportionate influence” institutional property developers appeared to have on shaping Government housing policy in recent years. More focus needed to be put on looking at how to make housing affordable for people currently unable to buy homes, who were left “frustrated” paying high rents, he said.
