Up to 29,000 housing units are being held up in the planning process or in judicial reviews, a new report from construction consultancy Mitchell McDermott has found.
That amounts to almost a full year of housing output at current levels of delivery.
The report calculates that 20,683 residential units are being delayed by up to a year and a half owing to what is referred to as a “logjam” at An Bord Pleanála.
Another 8,139 units are being held up in judicial reviews, Mitchell McDermott concluded.
Combined, it accounts for 28,822 units – about 1,000 units shy of the total housing completion volumes for 2022, as reported by the Central Statistics Office.
The units are part of what is known as Strategic Housing Developments, or SHDs.
This is a process that was introduced in 2017 as part of Rebuilding Ireland with the aim of expediting the planning application process and to accelerate the delivery of larger housing developments.
Paul Mitchell, one of the authors of the report, said it was unacceptable that such developments could be kept in limbo in the midst of a housing crisis.
“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. 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 explained.
He said the delays were not only undermining confidence in the process and creating uncertainty around developments, but they were adding to the cost too.
“For example, on a 100-unit scheme, it costs about €2,500 on average per unit to submit a scheme for planning. This means the delays in An Bord Pleanála have cost developers, and ultimately the buyer or renter, €75m on these 20,683 units,” he calculated.
“If you add the finance holding costs, it increases to €125m. This cost – over €6,000 per unit – is passed onto the consumer and all because An Bord Pleanála doesn’t have enough planners.”
He pointed out that the inefficiencies were driving up the cost of housing at a time when the Government was offering financial incentives to first-time buyers to help address affordability.
In addition to the units awaiting planning decisions, a further 87 SHD schemes – comprising 31,000 units – have planning permission but have yet to commence on site.
In contrast to the situation regarding SHDs, almost all Large-scale Residential Development Projects (LRDs) are proceeding on time with no judicial reviews outstanding at the end of last year, the report noted.
The Mitchell McDermott report also pointed to a fall in general construction inflation last year to just 2%, down from 12% in 2022.
The stabilisation was accounted for by falls in the prices of materials including timber, steel reinforcement and bricks, but it noted that it was being countered to a certain extent by upward pressure on the cost of ready mix concrete, blocks, mechanical and electrical, materials and labour.
“2% is the lowest increase we have seen since we started tracking the inflation figure in 2016. While the geopolitical situation remains fraught and the potential exists for conflicts to impact supply lines, we are guiding a 2% to 4% increase for 2024,” Paul Mitchell said.