The hastily arranged Department of Housing press conference last Thursday revealed the relief in G overnment that at last there was some good news to report.
CSO data showed there were almost 30,000 housing units completed last year. It exceeded the Government’s targets, and was well up on 2021, though that year’s figure was heavily affected by Covid-19 restrictions.
While welcome, Ireland is still chasing a moving target; 30,000 is well short of what Ireland was producing in the Celtic Tiger era, though the homes being built now are of far superior quality to some of those.
A Housing Commission report — echoing what a lot of other specialists say — estimates that Ireland needs up to 62,000 housing units built each year until 2050 if it is to keep up with increased demand due to population growth and changing family formations.
The Government acknowledges this, with Eamon Ryan agreeing the current targets are not high enough. Part of the problem is backlogs in planning.
Housing Minister Darragh O’Brien has published a draft Planning and Development Bill which aims to “bring greater clarity, consistency and certainty to how planning decisions are made and to make the planning system more coherent and user-friendly for the public and planning practitioners”.
Basically, it is hoped that the legal route which opponents of new housing have used will be time-limited, legally clearer, and that the courts will have to give more weight to ministerial directives.
As many will point out, while getting caught up in the courts adds costs and delays to developments, there is plenty of serviced land in Dublin with existing zoning for
developments that should not end up in courts.
But if Ireland is to build the well over a million new homes needed in the next few decades, much more needs to be done to stop the anti-housing campaigns around Dublin city that ironically fly under the banner of being pro-housing.
A problem is that the Housing Need and Demand Assessment (HNDA), which allows councils to project housing needs, is in part based on previous population growth.
The HNDAs probably underestimate the need for housing and might even encourage slower growth in certain areas. This might be why we see the underdevelopment of many sites in Dublin and other cities.
Councils are responding to the wishes of their existing electorates, those who’ll be voting in the local elections next year, not the needs of the next generation who might live there in 20 years’ time.
The underdevelopment of land is as big a problem as the non-development of land. In any area you look, developments are getting bigger, and higher, with time.
Unfortunately, planners tend to look at the nature of the existing area rather than what an area could become.
So it is easier to get permission for a three-storey development in an area with two-storey semi-detached houses than it is to get the six-storey building we would need to hit our long-term housing needs.
It leaves us with land that is underused. The incentive for developers is to do small developments because of the costs of finance, the development levies that penalise you for bigger developments, and a planning system that delays more ambitious developments.
Areas such as Cross Guns (close to Dublin city centre) where the State is planning to invest billions on a major train station, is still seeing houses built rather than apartments.
Too many developments are too low and too small, and in 10 years’ time we’ll wonder why we allowed this to happen. They will eventually have to be redeveloped, costing us more money and disruption in the long term.
There is a solution to this. A land value tax would encourage the appropriate development of the land in Ireland depending on the extent to which it is valued.
Land in urban centres is valued much more highly, and so taxed more highly. Owners of such land are then incentivised to maximise what they can develop on this land, and quickly, because it will cost them to sit on undeveloped land — the opposite of what currently happens.
Now if you develop your land, perhaps building up, you will increase the value of the property and pay more property tax.
This disincentivises much-needed development. The land value tax treats the landowner with a surface car park the same as one who improves their land with an eight-storey apartment building.
The land value tax has a lot to offer. There are no obvious arguments against it. It is just fear of change that is keeping it off the political agenda.
Eoin O’Malley teaches politics and public policy at Dublin City University.