There were more than 100,000 dormant or non-activated planning permissions for homes in the State at the end of last year, more than 50,000 of which were in Dublin, a new study by the Department of Finance has found.
The report, published as part of the department’s Economic Insights series, blamed the high number of uncommenced permissions on the “viability challenges” facing high-density developments or apartment schemes.
The viability of these developments was being challenged by a combination of issues from input cost inflation, rising interest rates and “the prevalence of judicial reviews”, it said.
The finding comes amid criticism of the State’s complex planning system and the high number of legal challenges it allows.
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The department’s study found that at the time the Government announced its Housing for All strategy in late 2021, there were an estimated 70,000 – 80,000 non-activated planning permissions across the State.
However, barely a year later this figure had risen to 100,000. Over 50 per cent (50,776) were in Dublin “on sites owned by a relatively small number of developers,” the report indicated.
Around 90 per cent (or 45,460 units) of the uncommenced units in Dublin were found to be for apartments.
The Dublin data was also broken down by sites that have planning permission to build 100 units or more, with the report noting that “such schemes are the type of high density developments specifically encouraged by national policy”.
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It found that there were 108 such sites in Dublin with no activity. Of those, an estimated 31 are subject to ongoing judicial reviews, two have had the permission quashed and four relate to sites on which the judicial review has either been withdrawn or the planning decision upheld.
Some 75 sites in Dublin at the end of 2022 were described as “actionable” in the short-term with permission to build 23,526 units, while some 44 have had no activity for up to two years since obtaining planning permission. Some 22 had been dormant for between two and four years and nine sites for greater than four years.
The analysis indicated that the actionable sites were owned by just 50 developers, meaning some sort of direct action could be taken by the State to activate the sites.
Overall, the report concluded that there may be a number of reasons why construction has not begun on individual sites with planning permission.
“However, the scale of the aggregate problem, the proportion of apartment development in the figures, the repeated assertions by industry and, most importantly, the data, all point to a structural problem with the viability of high density development,” it said.
The report noted the cost of building many apartments was now “greater than the likely achievable sales price”. Since the report was compiled, the problem has been exacerbated by inflation in the cost of construction materials.
“Government initiatives such as Croí Cónaithe aim to bring these sites into use, however, the viability of apartments is a key issue and over the longer-term ways must be found to deliver high density housing at lower cost,” it said.
“This can be achieved through increased standardisation, lower specifications and improvements in construction sector productivity,” the report noted.
