Planning Regulator speaks out against flawed approach to planning

The first few reports of the new quarter focused on property price increases. This week, the focus is firmly on the supply side of the market. The latest BNP Paribas Real Estate Ireland Construction Total Activity Index recorded a slowdown in growth for Q1.  The slow down in growth was felt across all activities, including new orders and employment. Significantly, ‘business confidence’ across the industry dropped sharply in the first three months of the year. Overall optimism dropped b the second-largest degree on record, behind only that recorded at the start of the Covid-19 pandemic. The hikes in input costs are described by BNP as “near-record”, with more than 83 percent of respondents noting rising costs in March. Report author John McCartney explained that “This tips the balance against marginally profitable developments, softening growth in the demand for construction services”, which is the start of a bigger problem brewing.

One ray of hope for construction came this week as the Minister for Public Expenditure Michael McGrath “hinted” (according to The Irish Times) that a compromise for fixed-price contracts might be on the cards. This will come as a huge relief to contractors who are currently committed to problematic projects. There appears to be an understanding that the ambitions of the National Development Plan will not be fully realised unless the State adopts a reasonable approach to risk-sharing through price variation clauses.

On the planning side, the State’s deputy planning regulator, Anne Marie O’Connor, spoke out this week about the need for  “evidence-based” zoning when local authorities are drafting their development plans. It comes on foot of data showing that only one in six zoned sites are subject to an application for homes during the lifetime of a development plan. This follows a submission by the Office of the Planning Regulator (OPR) to the draft Dublin City Development Plan, advising the council that proposed restrictions on build-to-rent (BTR) schemes would breach national policies and ministerial guidelines:

 “The idea that clear breaches” of national planning policies “can be facilitated within the planning system and that is in some way going to lead to good outcomes I think is a flawed way of thinking… The planning system could not operate business as usual and hope for different outcomes”.

It is probably not a coincidence that these comments were made in the same week that Dún Laoghaire-Rathdown County Council has been threatened with Government intervention over attempts to require BTR schemes to comprise 40 percent three-bedroom apartments. The planning regulator Niall Cussen has asked Minister of State for local government Peter Burke to issue formal directions to this particular council. The OPR also asked the Minister to issue general directions over new restrictions on buy-to-let apartments in the development plan. 

Frankly, it’s about time that State bodies moved to facilitate the delivery of the political promise made on behalf of the industry. 

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group