The Government’s dilemma when it comes to housing is that it has plenty of money but no good ideas. As a result, it seems open to almost any remotely plausible suggestion that appears capable of getting more houses and apartments built.
The latest idea knocking around is that the Government should underwrite loans to developers from domestic banks. Irish banks have been slow to lend to the property market as they carry the scars of the 2008 financial crash. They are also, for the same reason, quite restricted in the exposure that they can have to the sector. What is being proposed, it seems, is that if the Government guaranteed the loans, then the banks and their regulators would be more comfortable about taking on the risk.
Anyone trying to buy a house or apartment must be puzzled as to why developers have any problem raising finance for apartment developments. It looks like a one-way bet but there is risk, otherwise there would be no problem in attracting investment into the apartment sector here.
The main risk is time. The longer it takes to build an apartment block, the higher the costs – in terms of financing in particular – and the more exposed the project is to events outside the developer’s control.
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There are myriad causes of the delays, ranging from the structural to the absurd. Take bats, for example. In 2020, the Cork developer O’Flynn Construction submitted a planning application directly to An Bord Pleanála under the strategic housing developments brought in to speed up big projects.
[ ‘Nothing can happen without it’: Housing delayed by out-of-date planning policyOpens in new window ]
Local residents objected to the application for 123 apartments in Ballincollig on the basis that it was close to the river Lee, which was a popular spot for bats to roost and feed. The planning application was approved by An Bord Pleanála but overturned on appeal to the High Court on the basis that the board had not sought an environmental-impact statement regarding the bats.
The Supreme Court over-ruled the High Court, saying the omission did not prevent the board from making the right decision. The High Court then sent the case to the Court of Justice of the European Union to find out exactly how much information about bats – and other species – was enough information. The answer – which came this month – is that a planning authority can decide whether an environmental-impact statement is needed.
It is hard to know whether the impact of the ruling will be to speed up approvals by closing off one avenue for objecting to developments – the lack of an environmental impact assessment – or merely open up another range of options. The planning authority will presumably have to show that it went through the correct procedure before deciding an environmental impact assessment is not needed.
In any event, O’Flynn five years later can now proceed with its development – if it hasn’t already – safe in the knowledge that the welfare of Ballincollig’s bats is not their concern. Our love affair with bats is unusual given they are nocturnal, hard to spot and engender an irrational fear in humans to such an extent that it has its own word: chiroptophobia.
The weaponisation of bats is perhaps an extreme example of how a dysfunctional and overlitigated planning process is restricting supply and pushing up house prices, currently to an eight-year high. Even the governor of the Central Bank, Gabriel Makhlouf, is of the view that the sclerotic system it is the number one issue.
He could not have been clearer this week. “The number one issue in housing is planning. It’s absolutely planning. This is not a unique situation in Ireland, but planning is a problem.”
[ No such thing as good news for Ireland’s housing supplyOpens in new window ]
The seemingly intractable nature of the litigation-related problem with the planning system – where bats trump people’s need for homes – has pushed the Government to consider increasingly unwise alternatives such as guaranteeing developers’ loans and lifting rent controls to encourage large-scale, buy-to-let projects by foreign investors.
But what is the alternative? One option, that has not gained much support, is for the Government to grant itself emergency powers to get large projects off the ground. A precedent of sorts was set by the powers the Government granted itself during Covid to restrict civil liberties.
They were grounded legally in the State’s obligation to protect public health. It is not too hard to make a similar argument for housing.
What shape the measures should take and whether it is actually a good idea or not is another question. It would be more than a little off-brand for Irish politics and would have unattractive echoes of events across the Atlantic, where Donald Trump’s administration is using similar arguments to test the rule of law.
But after a decade of tinkering around the edges, a dysfunctional and apparently unsolvable problem with litigation in the planning system, growing public discontent and a shrinking number of increasingly risky alternatives, how far can we be from the point where it should be given serious consideration?
