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Should Ireland's planning system take some of the blame for the housing crisis?

A European Commission report shows a 96% correlation between the number of planning permission grants and the number of homes completed two years later.

PLANNING LAWS OFTEN take the rap for surging house prices. As the construction industry tells it, red tape ensnaring development and enabling NIMBY (“not in my back yard”) objections are part of the reason supply of housing is so low.

The Irish Home Builders Association says “we are trying to meet the demands of the 21st Century with a 20th century planning system. The result is unnecessary delays to homebuilding up and down the country”. 

But the whole point of the planning system is to stop builders doing whatever they like, and try to strike a balance between competing interests. So how does that system work, and is there really a pressing need for reform? 

There’s no getting away from the fact that the planning system is complicated.

A consolidated version of the main regulations runs to 576 pages; the Planning and Development Act itself, 689.

For the rules on what can be built where, begin with the National Planning Framework, which sets high-level guidelines that feed into regional strategies (Eastern and Midland; Northern and Western; Southern). Both of those have to be taken into account by local councils in setting development plans, the main document against which planning permission applications are assessed. Sometimes there’s a fourth tier, local area plans.  

Councils are supposed to decide planning applications within eight weeks, but they can also ask for more information, adding up to six months.

If permission is refused or someone objects to it being granted, an appeal to An Bord Pleanála can be lodged up to four weeks later and takes around 18 weeks on average to be resolved.   

Land hoarding and the vacant site levy

Developers are sometimes accused of sitting on land to keep prices high.

A land hoarding tax, the vacant site levy, hasn’t been a runaway success so far. The European Commission reckons that “a well-administered vacant site tax [as opposed to the current one] could increase land availability and reduce land inflation”.  

Once permission is granted, though, the homes do get built – eventually. The same Commission report shows a 96% correlation between the number of planning permission grants and the number of homes completed two years later.

It’s a different story when it comes to the most high-profile change to planning rules of recent years: so-called strategic housing developments, or SHDs. Under this temporary scheme, An Bord Pleanála is the first and last port of call for permission to build developments of 100 or more housing units. Councils are leapfrogged, and there is no formal right of appeal.  

Since the rollout of SHDs in 2017, the Bord has granted permission for around 200 developments hosting 50,000 housing units plus student and shared accommodation. But construction has begun on fewer than half (47%) – and that’s only counting SHDs granted permission in 2018 and 2019, to allow for natural lag time in starting complex projects.  

Why are so many of these big developments stalled? Two words: judicial review.

The legal route

While there is no right to formally appeal a Bord Pleanála decision – to ask a higher authority to look again at the merits – there is a general right in the Irish legal system to ask judges to scrutinise the decisions of public bodies (a judicial review).

Decisions found to be flawed in certain ways can be quashed.  

Around a quarter of those 200 SHD grants have now been judicially reviewed, according to a tally kept by FP Logue, a law firm.

The wheels of the law grind slowly, so the mere fact of being tied up in a judicial review will hold things up. What’s more, these cases have a strikingly high success rate. Of the 24 cases that have gone to trial so far, 22 have seen the planning permission quashed – accounting for around 8,000 units.

Just two were upheld, which doesn’t bode well for the 25 or so pending judicial reviews yet to be decided.  

Industry loathes judicial review.

A recent report by Tom Phillips + Associates, a consultancy, complains that it is “out of control: planning legislation is effectively being rewritten by the week”.

Property Industry Ireland, an industry lobby group, decries “exponential growth in judicial review challenges to planning permission” and says that changes are “urgent”.  

But Fred Logue, whose firm has been involved in challenges to SHDs, says the reason so many succeed is because the scheme is not fit for purpose.  

“The legislation is not great,” Logue says. “It puts huge constraints on the Bord, firstly to make a decision in a very short space of time, and secondly in preventing them from getting further information from developers. That’s leading to decisions that are vulnerable to being overturned”.  

There is a sense that the fast track system is now starting to fall apart at the seams, with some developers now preferring to take their chances with the regular planning process rather than run the increasingly high risk of a judicial review.

The Programme for Government simultaneously commits to “review and reform the judicial review process”, but also not to renew the law authorising SHDs when it expires at the end of 2021.

Property Industry Ireland says that “if the process is not to be retained, then it is important that the positive elements of the SHD process are incorporated into any new planning regime – e.g. hard timelines for delivery of planning decisions”.  

Logue says we already have a planning regime: the four-tier structure extending from the National Planning Framework down to local area plans. Rather than continuing to throw in “random and opportunistic mega-developments” on top, his solution would be to spend more on the system we have.

“The way to solve the problem is to have more resources at local level, where proper planning decisions can be made. Resource the councils to make good decisions about planning in their area.”   

Similarly, a recently qualified architect tells The Journal: “I don’t think any of this ‘strategic housing’ is strategic or housing. Most of what is proposed is sub-standard, it’s not available to buy [as opposed to rent] so it keeps prices artificially high, and ultimately it damages infrastructure and communities.”   

It’s hard to envisage any SHD-style arrangement that would satisfy both industry and property owners. But there are some more incremental reforms that could improve the system in less eye-catching ways and potentially command broad support.

SHDs aside, planning applications and appeals in 2021 are still almost entirely paper based. The bureaucracy is considerable: Tom Phillips + Associates says that 55,000 applications (15% of the total) over the past decade were thrown out as invalid for mistakes with the paperwork.

These validity requirements can also vary from council to council, increasing the chances of administrative rejection.  

The industry groups are keen on “eplanning”, so that applications can be filed online.

The Local Government Management Agency, the driving force behind the national eplanning project, says it will make things more efficient and crucially “reduce the potential for invalid applications”.

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A spokesperson told The Journal: “It is hoped that planning authorities will have the ability to accept planning applications online by end 2022.”

A modern online system could also be good for property owners, helping individuals to lodge their objections (“observations”) and appeals more easily.

Chris Clarke, a senior An Bord Pleanála official, does caution that eplanning isn’t necessarily a panacea. Reasons why people might prefer to stick with hard copy include the state of rural broadband and the fact that people who engage with the planning system, being mainly property owners, tend to be older than average.  

But after a slow start, the Bord is now “well on the way” to delivering its end of eplanning. A GIS mapping system, new database and revamped website are all now in place.

While routine planning appeals can’t yet be lodged online, Clarke says that should be possible “by the end of this year”, subject to the planning legislation being tweaked to allow it.  

Some would see this as tinkering around the edges. More blue-sky thinkers take issue with the adversarial nature of the system, where developers set the agenda with their proposals and brace for impact with the public.

Big ticket reforms would try to engage communities earlier, as with onshore wind farms in England, or have the state develop more land directly instead of leaving it up to the private sector.  

Even if grand reforms were a sure cure for NIMBYism, though, they wouldn’t solve the housing supply crisis in the short term. Working to streamline the planning system we’ve got could be a better bet.

This work is co-funded by Journal Media and a grant programme from the European Parliament. Any opinions or conclusions expressed in this work is the author’s own. The European Parliament has no involvement in nor responsibility for the editorial content published by the project. For more information, see here.

About the author:

CJ McKinney  / Legal Affairs Journalist

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