An entitled minority are giving two fingers to the rest in Ireland’s housing crisis

When people object to development, when they claim a right to light or lodge a judicial review to ascertain what the constitutionally acceptable height of a building should be, do they pause to consider the wider implications for the rest of society? Do they understand they are engaged in a selfish and highly costly act? Ireland has a large housing shortage that will only be solved by building more homes. Anything that unreasonably prevents this from happening imposes a huge cost on the rest of us. Unless the objection is based on a clear breach of zoning regulations, the objector, be it an individual or a residents’ association, is selfishly harming the greater community.

One of the most important lessons in macroeconomics is termed the paradox of aggregation: what is good for the individual is not always good for the community. A helpful way to think about this is a seated concert where someone in front of you stands up to get a better view. This act throws down the gauntlet for you to stand, so you do, and so does the person behind you and so on. In time, the entire theatre is standing when they have all paid to sit.

Something similar happens when a person objects to development. This puts a cap on the building of homes and, before you know it, the price of all homes increase – and the cost of that is paid by society as a whole. It only takes a few objectors to exact a huge cost on the many.

Nimbyism (not in my backyard-ism) comes with enormous costs. In a country with an acute housing crisis, it constitutes antisocial behaviour, underscoring a pervasive “I’m all right Jack culture”, where a small number of largely entitled people give the two fingers to any notion of community or the greater good. Last week, I focused on the idea of the engaged, responsible citizen who is aware of the rights and responsibilities that come with living in something called a society. Looking at the recent spate of planning objections, it appears that we have lost some of this.

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In Ireland, the objecting problem is endemic. For example, when the Government tries to fast-track planning to build homes under the strategic housing development initiative, many of the projects end up in court. Of the 228 national schemes that were granted planning under the strategic housing development system, 16 have stalled because of a legal objection. These schemes contained plans for 4,151 individual housing units.

In addition, in recent months permission has been quashed for 671 build-to-rent apartments at Milltown Park, Sandford Road, Dublin; 493 homes at Temple Hill, Blackrock, Co Dublin; 255 dwellings in Killiney, Co Dublin; and plans to build 852 homes at the site of the former Central Mental Hospital are being held up by just one objector. And so it goes on. You get the picture.

In practical terms, the mechanism through which Nimbyism – and a widespread culture of objectionism, supported by lawyers who turn a tidy twist – serves to economically harm and lower the spending power of working people is fairly straightforward. Restrictive land-use regulations, burdensome building requirements and the reliable flurry of objections from “aggrieved” local residents all serve to constrain the potential supply of housing – at a time when we need to build 60,000 homes a year at least.

Based on 2021 data, Ireland faces the highest housing costs across the EU. Our costs are now 94 per cent above the bloc’s average, which reflects a significant deterioration over the past decade

Unfortunately, this is often most true in those areas where housing is most acutely needed: places close to urban centres, transport nodes and where there are jobs. The result in any market in which supply is a) constrained and b) vastly outstripped by demand – due to demographics, migration and the fact that we are settling down later – is inevitably an upward pressure on prices.

Latest figures from the Housing Agency reveal who is paying most due to the restrictions on supply, caused in part by our objecting delinquency. As usual, the most vulnerable are hit hardest. By calculating how much of a person’s disposable income goes on housing, we can see how much ordinary people’s spending power is most reduced by high rents and high home prices.

Those in the private rental market are clearly the worst hit, with 43.6 per cent of these renters spending more than a quarter of their disposable income on housing. Among renters, there is a smaller subgroup – 13 per cent of the total or about one in six – worse hit still, who are dedicating two-fifths of their income to housing costs and 7.2 per cent of all renters sinking over half their income in housing.

It’s also worth noting that the numbers in the private rental sector are likely swollen by forbidding house prices and rising interest rates that prevent would-be first-time buyers from getting a foot on the ladder. In other words, it’s plain to see that working people are seeing housing costs eat up a greater share of their budget and constrain their spending power. Some of this upward price pressure is due to objectors and their rights.

[ Rents and house prices to keep rising as Ireland among EU’s lowest for housing investment - ESRI ]

Ireland’s high housing costs faced by both renters and buyers will surprise no one (this column, along with many others, has documented it for years), but it is worth putting the crisis we face here in a wider European context. Based on 2021 data, Ireland faces the highest housing costs across the EU. Our costs are now 94 per cent above the bloc’s average, which reflects a significant deterioration over the past decade. In 2010, our costs were a modest 17 per cent above the EU average. Now they are almost double.

The solution for too few homes is building more homes, in the right places at the right prices. This means more building, within planning guidelines and zoning regulations. When we join the dots, we can see that an egregious objection has dramatic knock-on effects not just in terms of prices, but rents and delays. So the next time a neighbour tries to galvanise you to object, slow down or obstruct a legitimate development, think twice. It’s not just you who will be affected by an objection, it’s an entire community who will carry your can.