A wheelchair user crawling up the stairs of his unsuitable rental home. An international student living with scores of people under one roof. A pregnant mother living in one room of a hotel, with no alternative in sight. Three generations of women living in one council-owned flat with mould so bad they all suffer continuous chest infections.
These are just some of the people The Irish Times has spoken to over the last four weeks dealing with the stresses and hardship of Ireland’s housing crisis.
Why is there such a shortage of homes to buy and rent in Ireland?
Planning system
In order for a greenfield site to become a new estate of homes, a number of things need to happen. There must be an established need for housing in the area under the National Planning Framework. The land must be zoned for housing, and serviced by Irish Water and the ESB. Next, the scheme must be in line with the anticipated development in the relevant Local Area Plan. Then, a planning application can be made to the local authority.
At every stage of this process, obstacles can arise.
The National Planning Framework was published in 2018 and its housing targets are based on 2016 census figures. The population has grown significantly since then, but a revised framework has been delayed and is still not published, meaning the assessment of housing need in certain areas may not be up to date.
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Secondly, the land may not be zoned or serviced. Rezoning only happens every five years, unless the local authority sees a particularly strong reason not to wait that long.
The most cumbersome stage is actually securing planning permission to build. Developers can seek planning in the traditional way, through a Section 47 application, or through the Large Scale Residential Development (LRD) process for schemes over 100 units.
Objections by third parties can be made while the planning application is being considered by the local authority, they can appeal it after a decision is made to An Bord Pleanála (ABP), and they can apply to appeal ABP’s decision for a judicial review.
All of which means that turning a greenfield site into an estate of homes can take decades rather than years.
John Downey, a chartered town planner and managing director of Downey Planning, gives the example of about 400 acres of agricultural land in Donabate, north Co Dublin, which was rezoned for housing in 2003.
“That land was all rezoned in 2003 but houses are being built now since 2023, so that took 20 years because of all the obstacles in front of us,” Downey says.
Michelle Norris, director of the Geary Institute for Public Policy at UCD and a member of the Housing Commission, says that while the public needs to be able to legally challenge poor decisions, “the level of litigation in the planning system ultimately undermines the democratic basis of the planning system”.
Paul Mitchell, director of construction consultants Mitchell McDermott, suggests two changes Government could make “overnight”.
“A lot of land zoned for housing was previously dezoned, so the Government could issue a decree and rezone all of that previously dezoned land overnight. The second thing is they could issue another decree automatically extending all planning permissions which are currently up for renewal for another five years,” Mitchell says.
Financing and the exit of big players
The financial crash of 2008 led to the mass exodus of large property developers in the State.
The construction industry still has not recovered to its pre-crash levels, with Central Statistics Office (CSO) data from 2024 showing employment in the sector is still well below its peak in the mid-2000s.
There are only two large developers, Cairn and Glenveagh, which have the capacity to deliver homes at scale. The rest of the State’s developers are small- to mid-sized housing providers that struggle to access the necessary finance required to build at scale.
“If Ireland is going to scale up housing output to 50,000 or 60,000 a year over the next several years, it needs bigger-scale players,” says Dermot O’Leary, economist at Goodbody Stockbrokers.
But why can’t these smaller developers scale up?
“Banks are still quite cautious about lending into the space, so that constrains the ability of the builders to scale up,” says O’Leary.
Development lending at AIB and Bank of Ireland has fallen steadily since the crash, with a recent report by the Central Bank of Ireland finding that the value of this lending across both banks was €1.6 billion, or just over 1 per cent of total lending.
While banks need to consider how they could play a role in terms of increasing finance into the space, O’Leary says the State should also consider ramping up equity investment to cover the gap between what the bank will lend and the cash reserves a developer can put up as a deposit.
Another option suggested by Housing Europe researcher Dara Turnbull is to use the excess savings of Irish households held by banks to fund social housing providers.
“In France the excess savings of households are collected in a national savings account system called the ‘Livret A’. These funds are then lent to social housing providers, forming about 75 per cent of the capital required to develop the typical new social housing project,” he says.
“This model has existed for over 100 years and has been very successful in bringing in additional ‘private’ capital to develop affordable homes.”
International investment
Attracting more private international investors into the Irish housing market has been the biggest talking point of Government parties since the new Dáil term started. Taoiseach Micheál Martin says the State needs to pivot in order to secure this kind of investment, which has fallen back in recent years.
There have been calls for a review of rent controls and a more stable housing policy that is not subject to so much change to give foreign funds more certainty when investing in the State. There has been significant backlash to the idea among Opposition parties, which argue that foreign investment does not result in more affordable homes and housing policy should not be determined by the wishes of private investors.
Over-reliance on private investment in the absence of other finance options could also result in difficult decisions for Government.
The model “is heavily dependent on access to international capital and a more ruthless push for profit maximisation,” says Turnbull.
“This poses a potential issue for the Government, as it may have to choose between making Ireland a more attractive place to invest in housing, and trying to protect tenants and vulnerable households.”
But if access to finance remains an issue for the smaller developers, and housing output needs to be upscaled significantly, it follows that private investment will need to be part of the solution.
There was an Irish presence at the high-profile MIPIM property conference in the south of France last week for the first time.
Representatives from the Department of Housing and the Ireland Strategic Investment Fund were among the Irish delegation hoping to secure finance at the international forum which is attended by more than 20,000 delegates, including investors managing more than €4 trillion of assets.
Claire Solon, managing director of US investment fund Greystar Ireland, said the mood music among investors at the conference towards Ireland was positive, but that there were certain risks “working against us”.
“We have a number of specific risks that may not exist in other countries. These would include political uncertainty in terms of policymaking, the rapidity of changes in policy and the risk around planning policy in particular, and the length of time that it takes to actually get a viable planning permission.”
Solon points out that changes to rent controls, along with changes to co-living and build-to-rent planning permissions, and building regulations in general have an impact on investment and creating a more high-risk environment for investors.
Rising interest rates have hit the property investment market globally, and the viability gap in apartment building has worked against the Irish market in attracting outside investors into this segment of development in particular.
Social housing
So if the cost of development is so high in the State, and the capacity of the private sector so low, why does the State not step in to do what the private sector cannot?
In some instances, it already is. The Land Development Agency takes publicly owned land and develops affordable and social homes on it.
Approved Housing Bodies (AHBs) receive funding from the Government to provide affordable housing on a not-for-profit basis. Both provide homes under the cost-rental model and the affordable purchase scheme.
Groups of local authorities would get together and set up jointly owned, separate specialist organisations that would do the housing delivery on their behalf and would be able to take on the specialists needed such as quantity surveyors, architects, engineers. That’s the model used to deliver elsewhere in western Europe
— Prof Michelle Norris
UCD professor Norris, whose research focuses on social housing, says the AHB sector has similar problems to the private developer sector in terms of scale, with just three large AHBs carrying out the vast majority of building.
The complexity of the planning system and delays in grant approval also hamper the sector in delivering housing quickly.
There are also “strict and cumbersome” public procurement rules, as well as “competition for land, builders and labour”, Norris says, which prove to be significant challenges for local authorities “most of whom are small organisations”.
One solution Norris suggests to tackle this is to establish a number of local authority housing organisations.
“Groups of local authorities would get together and set up jointly owned, separate specialist organisations that would do the housing delivery on their behalf and would be able to take on the specialists needed such as quantity surveyors, architects, engineers,” she says.
“That’s the model used to deliver elsewhere in western Europe – in France and Sweden for example – the vast majority of them do their housing delivery through these specialist organisations.”
The cost-rental model also has the ability to “play an important role”, Dara Turnbull says, but it will take time to deliver.
“This is the model that already exists in countries like Austria, Denmark, and Finland where the social housing system is built on a cost-rental approach and where the housing providers are quite financially self-sufficient,” he says.
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“However, based on the current approach, it would likely take at least another 30 years before the Irish cost-rental model was mature enough to gain a similar level of self-sufficiency. While this will be welcome when it happens, it obviously comes too late for those struggling to access affordable housing today.”
While the solutions to the housing crisis are varied and often polarising, the contributory factors are generally accepted by all sides.
An overly complex planning system, a lack of zoned land, difficulty in raising finance and the absence of large developers in both the public and private sector appear to be the biggest obstacles.
As the Government grapples with deciding the best way to tackle those issues, one thing is certain to continue: the impact of the Irish housing crisis on the ordinary person trying to find a home shows no sign of abating.
