75% of Ireland’s property sector believe that the newly named An Coimisiún Pleanála, or ‘the Commission’ (previously An Bord Pleanála), should have a mandatory timeline of less than 16 weeks to determine a planning appeal, according to our latest survey.
We polled more than 250 agents, developers and property managers at our recent Real Estate Update webinar. The event focused on the outlook for Ireland’s housing market and discussed planning and development issues along with the viability challenges facing the construction sector. Ronan Lyons, Associate Professor of Economics at Trinity College Dublin, spoke at the event on building a healthy housing system.
The survey found that the majority (60%) believe that appeals for Large Scale Residential Developments should be prioritised for mandatory timelines. It also highlighted that 38% believe the number of judicial review challenges is the most pressing planning issue.
Jay Sattin, Senior Associate, commented: “There are proposals under the Draft Planning and Development Bill to introduce mandatory timelines for all of the planning applications that are submitted to the Commission, with the intention of speeding up those decision-making processes. The timelines are not set, but they have to be reasonable – if they are too fast and the Commission isn’t given sufficient resources, then that could lead to rushed decisions and potential errors, which could be subject to judicial review applications.
Proposals are also being brought in to reduce the number of judicial reviews, which include stricter criteria on the type of applicant who can issue proceedings. The respondents, including the Commission and the developer, will also be notified at an earlier stage of the process.”
Ronan Lyons commented: “Some countries have a zoning system, some countries have a planning system - we have both, and we seem to have embedded both into the legal system now, resulting in a three-way approval process. I think we need to at least go from three down to two, and ideally go from two down to one like other countries. It doesn’t have to be zoning or planning, let’s pick one and do it well, and learn from other countries. If it were up to me, I’d pick a good zoning system that allows medium to long-term construction to happen.”
When asked about viability challenges in the Irish construction sector, almost half (48%) said that reforming the planning system to make it more cost-efficient would have the biggest impact on viability, while 20% favoured a reduction in the VAT rate on the purchase of new homes.
Joanne McGilloway, Senior Associate, commented: “Over the last 12 months we’ve seen increased concerns over the viability of many of the construction projects in Ireland. That’s due to a variety of reasons, including rising material and labour costs, labour shortages, high interest rates and the high cost of capital. All of these factors have a direct impact on the costs faced by developers, and the tender prices received from contractors.
Contractors are taking a more considered approach to pricing terms, and it is having a material effect on the time it takes to get contracts agreed and signed. In fact, in the first three quarters of last year a lot of contractors were simply refusing to enter into fixed price contracts. Now contractors appear to be more comfortable with supply chain risk and as a result, we are seeing contracts being signed that would not have been signed 6 months ago.”
Ronan Lyons said: “Viability is that price to cost relationship and for nearly 15 years now that’s been out of sync. Compared to other countries, it is really expensive to build in Ireland relative to our own incomes. We were a cheap place to build in the 1990s and by the 2000s we were an expensive place. The problem with costs is that they can go up easily, but it is very hard for them to come down.”
However, he added: “There is a receptiveness in the right parts of the system to find out what the true answer is - every senior politician knows now that they will be judged first and foremost on how they handle the housing situation at the next election.”