Monday 23 April 2018

Developers fail to build almost 24,000 new homes on prime Dublin sites

Some houses and apartments given green light more than a decade ago

Stalled: 964 homes - Dun Laoghaire
Stalled: 964 homes - Dun Laoghaire

Paul Melia and Donal O'Donovan

Developers have failed to build almost 24,000 new homes which in some cases have been granted planning permission more than a decade ago.

Data from the Department of Housing shows that permission is in place for houses and apartments across prime sites in Dublin, with some given the green light as far back as 2004.

An analysis of official data shows that 10 developers have permission for almost 9,000 units but construction has yet to begin. While some plan to begin works this year, most have refused to comment on the delays.

The department is conducting an in-depth trawl of planning permissions in the four local authorities as the shortage of homes coming onto the market fuels price hikes and exacerbates the homeless crisis.

Even on prime sites in upmarket areas where hundreds of homes have been approved, they are being built in blocks of 10 or 20 units because banks are refusing to lend for bigger schemes.

The data is based on construction activity at the end of September 2016 and includes planning permissions of 10 or more units which can be implemented "immediately". It shows that permission was granted to schemes in Balbriggan, Lucan, Citywest and Malahide more than a decade ago. In many cases, local authorities have granted extensions of planning permission, giving more time to complete developments.

Leading developers in possession of sizeable landbanks include Joe O’Reilly. Photo: Steve Humphreys
Leading developers in possession of sizeable landbanks include Joe O’Reilly. Photo: Steve Humphreys
Garrett Kelleher. Photo. Mark Stedman/Photocall Ireland
Gerry Gannon. Photo: Collins Courts

While there are currently 126 'active' sites across the city, where 5,500 homes are under construction, a total of 331 sites are capable of delivering another 23,746. The reasons cited for the failure to build homes included difficulties accessing development finance and high building costs.

Industry sources said a big factor slowing the supply of houses has been nervousness among the banks and Nama about lending.

It means that even on sites that have planning for hundreds of new homes, builders are getting only enough funds to develop a fraction of the potential houses at any one time. "Build 20, sell 20, is what keeps the bank happy," one insider said.

The data shows that 10 developers have obtained planning permission to build 11,928 homes. Some 1,935 have been completed, and works are under way on another 1,010. Permission remains in place for another 8,983.

Stalled: 410 jobs - Churchtown
Stalled: 410 jobs - Churchtown

Just two of the 10 developers responded to queries as to their plans for the sites, Viscount Securities/Park Developments, and Flynn & O'Flaherty, which controls the biggest development site in the city at the former Phoenix Park Racecourse in Dublin 15.

Permission for 2,390 homes was granted in October 2012. To date, 590 have been completed. According to the Dublin Taskforce, construction works on 51 units are under way, and works have yet to begin on 1,749.

Spokesman Ken MacDonald, from selling agents Hooke & MacDonald, said that works were under way on 136 houses at the 'Fairhaven' section of the development, and on two apartment blocks.

"They are very keen to accelerate the rate of construction but they are constrained in doing so by the build costs for the apartment element of the project," he said.

"They're keen to supply the market and accelerate the build-out of the balance of the site. They have plans to build a further level of three and four-bedroom houses over the next 12 months."

Industry sources said there had been a "churn" of distressed loans and bankrupt developers in recent years, and that land was beginning to be taken over by firms with funding "who can do something with it".

"This is all part of a process in a sector destroyed by a crash, and steadily restructuring itself and trying to find an optimum position where it can sell and the bank will fund," one said.

The Department of Housing said in many cases planning permissions were amended to reflect a market need for houses instead of apartments, and that in other cases the owners of existing permissions did not have the funding to build.

Permission was granted for 16,000 new homes up to September last year, and measures announced under the Government's housing plan needed time to produce results. "We keep a track of all of these permissions, and every site is being watched," a spokesman said.

"There are very positive signs in terms of planning applications and mobilisation of sites, with bigger sites opening. What we're seeing is a settling out of the real operators from those who don't have funds. We need to give all the measures being deployed (under the Government's housing plan) a chance."

Supermarkets are now checking out Dublin's property market

Supermarkets, State agencies and even the health service are among those with planning permission to build homes in the capital.

German retail giant Aldi has approval for a mixed-use development in Balbriggan, which includes 103 homes. It was given an extension of planning permission in October 2014, and a spokeswoman said the company did not wish to comment on its future plans.

Rival Lidl also has the green light from a local authority for homes in Castleknock. It purchased a site in 2013 with an existing permission for a mixed-use development which included 33 apartments. It has since sought approval for a revised development which includes eight homes, and which is under appeal to An Bord Pleanála.

The HSE received permission in May last year for 48 homes at Cluain Mhuire on Newtownpark Avenue in Blackrock. It did not respond to requests for comment.

The ESB's redevelopment of its HQ on Fitzwilliam Street also includes 11 units.

Irish Independent

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