Emergency measures needed to address housing crisis, developer says

Emergency measures to tackle the State’s housing crisis are needed, including changes to zoning and planning rules, according to one of Ireland’s biggest developers.

Michael O’Flynn said unprecedented actions were taken in the past to deal with the banking crisis, and, more recently, the Covid-19 pandemic.

“We need a similar approach to the housing crisis if we are to ramp up housing really quickly.”

Mr O'Flynn is chairman and chief executive of the O'Flynn Group, which is currently completing more than 300 homes and 150 apartments in Cork, Dublin and Kildare.

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He made headlines recently after it emerged he was involved in a joint venture with billionaires JP McManus and John Magnier to build 5,000 homes on 250 acres in west Dublin. However, the project planned for Edmundsbury, near Luttrellstown Castle and the Hermitage Golf Club, is at an early stage as the land needs to be rezoned.

The Government’s Housing for All plan, published this year, aims to deliver 33,000 homes annually until 2030 to meet housing needs.

Mr O’Flynn welcomes the plan, but says he believes it has little chance of being realised unless changes are made.

"Unless we look at fundamental issues like zoning, planning administration and infrastructure provision, it will remain aspirational," said Mr O'Flynn, who recently aired his concerns at a Construction Industry Federation conference in Cork.

Zoned land

Although the €4 billion worth of State investment in housing would help, he said, “redirecting money towards the problem is only part of the solution and it’s a question of how you set about dealing with the real issues”.

Currently, he says, Ireland has "probably" only two to three years' supply of zoned land available, which puts pressure on land prices and, ultimately, the affordability of housing.

In the past, there was enough “head room” in the amount of zoned land that took account of the fact that some landowners did not go ahead and sell, or if other lands could not be serviced in time with services such as water and sewage.

The amount of zoned land available should be twice what is expected to be needed, Mr O’Flynn said, but the new Development Plan Guidelines rule that spare capacity should be no more than 20 to 25 per cent, which he said was too restrictive.

The zoning flaws date back to the National Planning Framework 2040, which aims to have a 60-40 split between brownfield and greenfield construction nationally, and a 50-50 split in Dublin, Cork, Galway, Limerick and Waterford.

Emphasising that he was not in favour of greenfield developments that leave homeowners with long commutes, Mr O’Flynn said: “It’s all very admirable to develop brownfield.”

However, he doubted if brownfield targets could be met. “Historically, housing on brownfield sites in Ireland is probably lower than 10 per cent. It might be higher now in Dublin because of the docklands, but it’s still a long way short of 50-50.”

The focus on brownfield has curtailed greenfield zoning, he says, which fails to recognise that brownfield construction is considerably more expensive and not viable unless subsidised. Brownfield sites face contamination risks and other costs, while they are also more costly to develop given they are more often used for apartments, which are more expensive to build than houses.

“A typical apartment costs between €200 and €230 per square foot to build, whereas a comparable own-door home would be €120 to €140 per square foot,” he says.

Apartment building is viable only in better-off parts of Dublin, where builders can earn the 15 per cent profits demanded by financial institutions to cover lending.

“The only way [brownfield sites] will become viable is if the Government introduces some subsidy scheme for buyers to purchase them or some designated tax breaks for developers to build them,” he said.

Slow planning

Besides zoning, Mr O’Flynn said changes would have to be made to speed up planning decisions, adding that he could build a house in nine months once he got on to the site.

“Getting on site is the issue, with clearing planning taking anything up to three, four or even five years. Time is money and such delays are adding ultimately to the cost of the home for the potential buyer,” he said.

Mr O’Flynn welcomed the Government’s decision to look at establishing a planning court to deal with judicial reviews, but he believed the entire system needed root-and-branch reform.

“It isn’t fit for purpose and is taking too long,” he said. “The Government thinks legal issues are the problem with planning. They are a problem but nothing like the problem that the administration of planning is.

“Now it seems to be about control,” he said, adding that pre-planning meetings with planners and demands for further information “which were a rarity in the past, are today the norm”.

He said the supply of infrastructure needed fundamental reform, too, if enough land were to be serviced to meet the 33,000-a- year houses target set by the Government.

"Irish Water is the key infrastructure supplier and they will have to be better funded if they are to supply what's needed," said Mr O'Flynn, who would not be drawn on whether water charges are needed.

“We need to service land that is either likely to come on the market or is already in the hands of those who are going to develop it,” he said, adding that some of the projects Irish Water were involved in would not deliver housing for years.

“It’s not enough to put [infrastructure] where development may happen, it has to go where development will happen given the scarce resources and huge demand for housing that there is.”