Dual Challenge of Housing Shortage and Stifled Development in Ireland

As Ireland’s original alternative real estate funder, we see first-hand the dynamics of the Irish housing market play out, and one glaring issue that continues to hinder progress is the interplay between a severe shortage of houses for buyers, and developers grappling with planning challenges. These are not opposing issues, addressing one will allow us to address the other.

One side of the housing crisis (‘housing emergency’?) equation involves prospective homebuyers who are faced with a scarcity of available housing options. The persistent shortage of homes exacerbates the affordability crisis and leaves many families and individuals unable to secure suitable accommodation. As the demand-supply gap widens, prices surge, placing homeownership further out of reach for most people. Addressing this issue requires concerted efforts to ramp up construction and increase the supply of housing units. While recent policy changes in favour of homebuilding are to be welcomed, their success depends upon a functioning planning system. 

On the other side of the equation, homebuilders find themselves trapped in a cycle of uncertainty due to the non-functioning planning regime in Ireland. Many developers and project owners we work with experience a lack of viable sites to transition to once they complete their ongoing projects. These delays are primarily caused by sites caught in planning limbo, stuck in protracted decision-making processes, appeals, and judicial reviews. As a direct result of this, developers face the disheartening prospect of having to let go of skilled crews, which not only affects their businesses but also the wider economy.

Addressing the planning system’s deficiencies is crucial to unlock Ireland’s housing potential and facilitate the construction of much-needed homes. 

But what would this even look like?

Reforming the planning system is an unavoidable step toward streamlining the decision-making process, reducing bureaucratic hurdles, and accelerating permissions. As a starting point, adequate resources must be allocated to An Bord Pleanála to ensure timely and efficient handling of planning applications and appeals. Increased staffing levels and improved coordination between planning authorities and developers could help expedite the process and minimise delays.

Also, engaging communities and stakeholders early in the planning process could foster collaboration and address concerns effectively, reducing the likelihood of prolonged objections and judicial reviews. Frankly, as an industry we need to acknowledge that we don’t do this well. There is a two-way respect and trust that must be rebuilt. In practice, encouraging public participation while ensuring transparency and fairness will help strike a balance between development needs and local interests, and this is the only route to non-politicised sustainable development.

Finally, better collaboration between project owners, planning authorities, and other stakeholders is vital to address the challenges at hand. Regular dialogue and open channels of communication can improve understanding, enable proactive problem-solving, and foster a cooperative environment conducive to progress. 

These are just a few ideas, as always, we look forward to hearing yours…

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group