The construction of almost 21,000 homes in strategic housing sites, the majority in Dublin, has been held up because of decision-making logjams at An Bord Pleanála while a further 8,000 units are on hold because of judicial reviews, according to a new report by construction firm Mitchell McDermott.
The study indicated that the delays were adding roughly €6,000 to the cost of each housing unit, which it said would most likely end up as an additional cost for the buyer or renter.
It found that decisions on 20,683 units in strategic housing developments (SHDs), which are intended to move through the planning process quicker, were overdue by an average of 16 months at the end of 2023 because of an ongoing backlog at the planning agency. Another 8,139 units have stalled on the back of judicial reviews.
Combined, the 28,822 units comprise almost a current year’s housing output, the report noted.
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While SHDs are being held up in delays and subjected to judicial reviews, almost all the Large-scale Residential Developments (LRDs) have been decided on time and there were no outstanding judicial reviews for them at the end of 2023, it said.
The report calculated that on a 100-unit scheme, the planning costs per unit were on average €2,500 and that delays on the 21,000 units caught up in the planning system had cost developers €75 million, or €125 million when the “finance holding costs” are included.
This equated to over €6,000 per unit, which the report indicated would be passed on to the consumer “and all because An Bord Pleanála doesn’t have enough planners”.
“So, on the one hand unnecessary costs are being generated because of inefficiencies in a State agency while on the other, Government is offering first time buyers financial incentives to help buyers address affordability,” Paul Mitchell, one of the authors of the report, said.
It was unacceptable that in the middle of a housing crisis so many SHDs are “being left in limbo”, he said.
“We highlighted this issue at An Bord Pleanála previously and urged them to take on more planners, but the situation has not been addressed in any meaningful way,” he said.
“ We are told increasing the supply of housing is the number one priority but that doesn’t appear to be the case when you see delays of this magnitude in what is supposed to be a fast-track planning system,” he said.
“As well as undermining confidence and creating uncertainty around so many developments, these delays also come with a cost,” Mr Mitchell said.
The report also highlighted that another 31,000 SHD housing units have planning permission but have yet to start. It also calculated that construction costs rose by just 2 per cent in 2023, the lowest rate of increase since the company started tracking them in 2016. It forecast inflation would be 2-4 per cent this year.
Government supports are playing a key role, ensuring the continuation of between 10,000 to 15,000 units, it said.
Of the more than 20 incentive schemes available for homeowners, renters and developers, the report identified Project Tosaigh (LDA), an initiative to kick-start stalled construction projects, and Croí Cónaithe, the vacant property refurbishment grant, “as being most effective in improving supply”.
[ After years of tumult, An Bord Pleanála battles the legacy of crisisOpens in new window ]
On the affordability side, Cost Rental, First Home and Help to Buy were seen as having the biggest impact. Critics, however, contend these scheme keep prices inflated.
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