12. Residential Applications and Housing Delivery

OVERVIEW

Following the Government’s recent announcements regarding its increased target to deliver 50,000 homes per annum in the First Draft Revision of the National Planning Framework (NPF) and the Programme for Government 2025, the pathway from current delivery patterns of c. 30,000 new homes per year to meeting such increased delivery targets is unclear. The adoption of the revised NPF is critical given the significant increase in population that was identified in the Census of April 2022.

What is clear, however is that the planning system and it’s processes will have a crucial role to play in providing the necessary level of permissions to achieve the delivery objective. Therefore, it is important to review current levels of not only permissions granted but also the number of units for which applications are made – the beginning of the housing delivery pipeline.

Utilising data obtained by Construction Information Services (CIS) and the Central Statistics Office (CSO), John Spain Associates has analysed recent trends in the number of residential units applied for and granted permission and completed over the period 2020 to 2024. This data demonstrates that there is a need to at least double the number of homes for which planning permission is applied for each year, if there is to be any possibility of meeting the target of 50,000 homes per annum.

REVIEW OF RESIDENTIAL UNITS APPLIED FOR AND PERMITTED, 2021 – 2024

Source: CIS and CSO data

• According to CIS, only c. 46,000 new homes were applied for per annum in 2023 and 2024.

• Recent CSO data confirms that the number of planning permissions granted for apartments fell by c. 39% in 2024 when compared to 2023. The CSO data also shows approvals for houses were down 2.7% in the same period.  The total number of new homes approved annually fell by 21.4% in 2024 compared to 2023.  Furthermore, this data shows a significant fall in planning permissions for apartments in Dublin, down c. 56% last year across the four Dublin local authorities.

• The number of units applied for represents a significant challenge to meeting housing delivery targets over the next few years.

REVIEW OF RESIDENTIAL UNITS APPLIED FOR AND COMPLETED, 2020 – 2024

• As observed from the below table, dwelling completions between 2020 and 2024 ranged between c. 20,500 and 30,300 no. new homes per annum, delivering an average of 26,750 no. homes per year, according to the CSO.

• Based on the number of homes applied for and granted over this timeframe, it is apparent that on average only 44% of homes applied for result in a completed housing unit being delivered. This arises because of a range of factors, including:

1. The grant rate for large-scale residential developments (LRD) is c. 84%;
2. Of LRD permissions granted, approximately 11% are subject to judicial review challenge and therefore cannot be implemented in the short term.
3. Of permissions granted and not challenged, implementation rates have varied in recent years from 34% to 65%. Assuming a relatively high implementation rate going forward of 70%, this would result in the 46,000 units applied for being sufficient to deliver up to a maximum of 25,000 new homes per annum.

• This would be sufficient to achieve no more than 50% of current national housing delivery target of 50,000 units per annum. Therefore, there is a clear need to at least double the number of units for which permission is applied for, in order to be able to meet government targets in future years.

Source: CSO data

• In order to keep pace with NPF housing delivery targets, it is estimated (based on current trends), that at least 100,000 new homes will be required to be applied for per annum.

• This translates to a more than doubling in residential units to be applied for. This significant uplift is required to commence immediately if there is to be any prospect of achieving the national annual housing delivery target over the coming years.

CONCLUSIONS – MEASURES REQUIRED TO BE TAKEN BY GOVERNMENT

While recent steps to increase resources in the planning sector are welcome, including the significant expansion of board members and staff resources in An Bord Pleanála, there are a range of additional measures that needed to be taken in order to address the issues and achieve this doubling of planning applications necessary to meet housing delivery targets. These include:

1. Zoning of additional lands for residential development, taking account of actual land activation and delivery timescales.
2. Set minimum housing delivery targets for each local authority.
3. Address financial viability of housing and particularly of apartment schemes in urban areas.
4. Revise upwards the housing targets of all development plans at the earliest possible date to reflect Census 2022 and existing unmet demand as set out in the Revised National Planning Framework.
5. Clearly state that all Core Strategy housing targets included in development plans for each local authority are to be regarded as minimums and not caps or maximums on housing development, to be applied immediately, even pre-review of plans.
6. Continue the development contribution waivers.
7. Amend Residential Zoned Land Tax provisions so that the tax is not applied to developers actively bringing forward housing development on lands.
8. Review Land Value Sharing proposals to avoid adding significant additional costs to housing construction.
9. Restate the overriding role of National Planning Guidelines.
10. Enhance planning resources in local authorities.
11. Provide additional mechanisms for the extension of planning permissions which have not been commenced to allow further implementation.

The current trends in residential applications made and granted are well below the levels needed to enable the increased national housing delivery targets to be met. The level of residential units applied for per year, in the first instance, will need to at least double to provide the annual 50,000 housing completions targeted.

It is very welcome that the government is committed to addressing the housing crisis, as clearly set out in the Programme for Government 2025. However, there needs to be an immediate greater focus at the beginning of the pipeline for housing delivery i.e. to ensure the number of units applied for each year is significantly increased to c. 100,000 units per annum, or future delivery targets simply cannot be met.  Therefore, to achieve the housing delivery targets that are in the Revised National Planning Framework, there is a need for a range of additional policy measures to be implemented at the earliest possible date as there is no simple fix to the complex process of housing delivery.

If you would like to discuss this with a member of our team, please contact us using the button below.