Planning delays cited in €4,000 a year rise in homebuilding costs

Delays in the planning system could be adding as much as €4,000 a year to the purchase price of a new home, senior Department of Housing officials have told an Oireachtas committee.

Applications for large-scale housing developments were taking an average of one year to go through the planning system, but could take 18 months or longer, Niall Cussen, principal planning adviser with the department, told the Oireachtas housing committee.

This would be shorted to 25 weeks under new legislation which would see applications for 100 homes or more be dealt with directly by an Bord Pleanála, he said.

There was, Mr Cussen said, a “fundamental shortage” of sites in Dublin which were “ready to go” in to provided large scale housing.

The Irish Planning Institute told the committee that in Dublin alone planning permission has been granted for 33,000 homes that have yet to be built.

However Mr Cussen said most of these permissions were “old” and were unlikely to be used.

“It’s important to remember whose hands these lands are in and are they capable of carrying out development . . . A lot of planning permissions are now quite old and have already been subject to extensions of duration. They have now come to the end of their life.”

The department had undertaken analysis of applications for large housing development handled by An Bord Pleanála so far this year. While the average time from making an initial application to a local authority to a final decision by the board was one year, in one case the decision took 82 weeks.

In most cases the local authority’s decision was upheld by the board making the current two stage process of “limited added value”, said Mr Cussen.

“Assuming a site cost of €40,000 per home, purchasing a site for 200 homes will cost €8 million. The holding cost [waiting for planning permission] is €4,000 per home, per year, and it’s the purchaser who picks up these holding costs.”

Permission for 33,000

Irish Planning Institute vice-president Brendan Allen told the committee that with planning permission on hand for 33,000 houses in Dublin the planning system was not the problem "how we activate the delivery of homes is the issue".

The institute was concerned communities were being separated from involvement with their local authority’s planning function.

“The centralisation of the planning system is not set out in any government planning policy and a piecemeal approach to the removal of planning function from Local Authorities has the potential to undermine certainty, efficiency and the efficacy of the planning system,” he said.

Separately housing charity Threshold told the committee that new legal safeguards need to be put in place to ensure that tenants in buy-to-let properties are not at risk of losing their homes.

Due to a loophole in current legislation receivers can evict tenants without giving them the legal notice period required for all other tenancies.

"In Threshold, we speak to households on a daily basis who are paying a severe price for the current housing shortage principally due to rapidly rising rents, being forced to accept unsuitable housing and living in constant fear of losing their homes," said housing charity chairwoman Aideen Hayden.

“We are calling for a full review of the private rented sector. And for the Government to create a national strategy that is adequately funded and has clear targets to address issues like long-term rent certainty, increasing affordable supply, improving the quality of rented housing and dealing with the difficulties in the buy-to-let sector.