In all the most populated local authority areas around Ireland, we are seeing the same commentary from senior council officials: that we have sufficient zoned land to meet our requirements for new home delivery. Most councils are failing to address the increasingly scarce supply of zoned, serviced and suitably located land that will actually be developed in a development plan cycle to deliver the affordable homes we need.
While supply chain and wage inflation is putting significant upward pressure on the cost of housing delivery, the zoning policies being adopted by many councils are contributing to high land values, rising house prices and spiralling rents.
Our housing delivery keeps falling far short of targets every year. We are told the supply is coming but, even as supply rises, so does demand as we keep missing our targets. The more worrying reality is that the numbers being used to prepare our development plans are wrong and this has been the case for some time.
Every development plan in Ireland is informed by the population growth targets in the National Planning Framework (NPF) and a Housing Need and Demand Assessment prepared with guidance from the Department of Housing. That assessment is supposed to quantify the projected housing needs of each local authority area but there is a major flaw in the data used, given that projections informing the current series of development plans are based on the 2016 census, when Ireland had a population of 4.75 million people, rather than the evidence from this year’s census with the population now standing at a much larger 5.12 million.
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It’s not just that we’re starting from the wrong baseline, we also need to address the tsunami of population growth this year and to come. Immigration in the 12 months to April 2022 was at its highest annual level in 15 years. While 60,000 people left the State in that period, twice that number came to Ireland. Add to that the 75,000+ Ukrainian refugees we will welcome this year and up to a further 25,000 refugees from elsewhere, our population growth for 2022 will be enormous.
The NPF is the flawed bible on which our entire planning system and population growth targets are based. It assumes a one million increase in our population to 5.7 million people by 2040, equating to about 45,000 growth annually. But we are now on track to beat that by a massive margin.
Next year it is quite possible that our population will reach 5.3 million people, a growth rate almost 80 per cent more than that assumed under the NPF. And even if we make conservative assumptions of net migration averaging 30,000 annually out to 2040 and natural growth doing likewise, it would find us with a population of 6.3 million, over 600,000 more people than the NPF envisages.
Let that settle in and think about what this means for housing demand. Our targets are way out.
We are in the middle of a tsunami of population growth but we choose to ignore the elephant in the room that local authorities are using utterly redundant population data. It’s like we’ve decided to fail before we’ve even started
Despite the facts on the ground, which the Department of Housing and the Office of the Planning Regulator are fully aware of, they continue with a housing policy that assumes our housing requirement will average 33,000 new build units for the foreseeable future. There is now pretty much no scenario where this will prove to be the case, or even close to it.
Notably, our average household size (2.7 persons per house) is reducing towards European norms (2.2 per house), which will place further demands on the housing market, particularly for smaller homes. Other factors that will heap more pressure on housing are the high numbers of those entering Ireland under the employment permit system (50,000 this year), the strong increase in the number of EU and international students coming to Irish third-level institutions and the housing needs of our rapidly ageing population.
We are in the middle of a tsunami of population growth but we choose to ignore the elephant in the room that local authorities, at the direction of the Office of the Planning Regulator, are using utterly redundant population data. It’s like we’ve decided to fail before we’ve even started.
Another real problem is that the population and housing targets in the NPF are treated by local authorities as maximums rather than minimums. Historical translation rates between zoned land and the development of this land during a development plan cycle are less than 50 per cent across all local authorities, so we need to at least double the current quantities of zoned land in order to achieve the targets in the next cycle, which are far too low already.
The translation rate in Ireland, which the Office of the Planning Regulator is well aware of, has been consistent because significant parcels of zoned land are in the wrong place, are not serviced, are removed from public transport, local schools and other public amenities (all of which limit their market appeal) or are owned by people who don’t want to or can’t develop them. When deciding to retain the zoned status of lands, councils don’t consider the probability of those lands being developed.
The executive in each council must be obliged to point out the length of time land parcels have remained zoned and unused when seeking the approval of their councillors for the retention of their zoning, and to clearly explain the rationale for retaining the land as zoned in future when it hasn’t progressed, often for several prior development plan cycles. The Office of the Planning Regulator must insist on this detail.
It is time to acknowledge we have a problem that is much worse than many would like us to believe. Persisting with the population growth targets in the NPF, which couldn’t have foreseen the extraordinary growth of very recent years, is not an option. Likewise, persisting with development plans, many now in place until 2028-2029, based on obsolete data from our 2016 census, would be nothing other than negligent.
Michael McElligott is chief executive of Tetrarch Homes
