‘Compact’ growth key to future residential development

There’s been a lot written about how better use of the space in our cities is a vital part of resolving the housing crisis. What is sometimes forgotten is that we also have an arguably bigger sustainability crisis with how we manage our housing stock, both old and new.

According to the UN Environment Programme, almost 40 per cent of annual carbon emissions are accounted for by the construction sector and the built environment. For Ireland to make good on its Paris Agreement commitments, actions taken by those who build, own, and occupy buildings are a vital part of the policy mix.

Thankfully we can look to kill two birds with one stone and address the housing crisis at the same time as helping our environment through better use of our existing stock and focusing on compact growth in future developments.

We must look at our buildings in the same way environmentally-conscious people now look at the fast fashion industry. Making a new pair of jeans – or constructing a new building – can have a negative environmental impact, so we must also explore options to upcycle and repurpose where possible.

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When you consider that building and construction accounts for use of 50 per cent of all steel production and one-quarter of all plastics the good sense of this adaptive reuse is obvious.

This is where the amount of vacant buildings in Ireland is so shocking. According to EY-DKM, at the end of last year there were more than 92,000 vacant homes in the country, and a further 28,000 empty commercial properties. That’s not to include the partially vacant space you will observe if you look above many of the shops that line the streets and see the empty, and often dilapidated space in the floors above.

Living Above the Shop

Previous policy interventions to stimulate investment in Living Above the Shop (LOTS) schemes have failed largely due to their complexity and the excessive weight placed on conservation over housing provision.

It is welcome that in September 2020, Minister for Housing Darragh O’Brien indicated that he was considering reviewing Ireland’s strict preservation rules. Changes need to be swift and radical.

We need to rethink our grading of heritage structures and move from the current binary model whereby a building is either ‘protected’ or ‘not protected’. A tiered model, as in the UK, where there are three grades with escalating levels of conservation would be more fit for purpose and deliver better outcomes.

That’s not to dismiss the importance of our architectural heritage, but it must be balanced by the fact that conservation at all costs has little value if it means thousands of crumbling empty buildings or floors of buildings, that are quite capable of being used as homes.

We also need to move away from one-size-fits-all rules on fire safety and access. One of the reasons why continental European cities like Paris, Barcelona or Amsterdam have such vibrant city centres is because they have shown more innovation in how they think about using old buildings. With modern alarm and sprinkler systems there are ways of ensuring fire safety without necessarily requiring the second building access expected here.

Georgian Dublin is ripe for a return to residential use (as has been the case with buildings of a similar vintage in many UK cities) but current regulations in effect make office space the only possible functional use in most cases.

In addition to the regulatory barrier there is also the financial barrier to adaptive reuse. Tax allowances that only offset against capital investment but give no relief against rental income are not enough.

Building owners (mostly small-scale landlords) should be incentivised to make changes that bring old buildings back to life. Similar to the existing accelerated capital allowance scheme for energy efficient capital equipment, there should be a capital allowance offset against other income in the year when the improvements have been made. The public good of creating much needed residential space, and expending less carbon dioxide in a new build more than justifies enhanced reliefs.

Compact growth

The second area to address is compact growth. Higher population densities, efficiently serviced by public transport, will largely remove the need for cars clogging up the streets, and mean residents enjoy a far superior level of facilities that are economically possible when servicing large numbers in a defined area.

Consider the comparison of Vienna and Dublin, both relatively small capital cities with fewer than two million people. Both have historical city cores and a respect for their cultural and architectural heritage. Yet population density in Dublin is 1,400 people per square kilometre, less than a third of the 4,500 people per square kilometre of Vienna.

We can’t kid ourselves that Dublin is somehow a crowded place. We would benefit from higher density in the city centre, and along our main transport arteries like the Luas.

If we accept that sustainable development is more compact development, then it will likely require more apartment building.

Figures from authoritative sources such as the Society of Chartered Surveyors Ireland (SCSI) show total development costs of a minimum of €493,000 for a two-bedroom medium rise apartment in the city centre. Government needs to think about whether taking over €57,000 of VAT from this amount – possibly making it unviable – is consistent with a commitment to addressing climate change.

Perhaps more controversially, is it worth considering supporting environmentally sound compact living with a more generous first-time buyer grant for apartment purchases rather than suburban semi-detached houses? It’s no different as a green policy from having cheaper road tax for an electric car.

There are clear and urgent practical steps that can be taken to address the twin housing and sustainability challenges Ireland faces, through better use of existing buildings and focusing on compact growth in future development. The members of the Urban Land Institute and other leading industry actors stand ready to act.

Kevin Nowlan is chairman of the Urban Land Institute Ireland whose annual conference takes place on May 13th