Delivering in the face of short-sighted housing policy

There’s nothing quite like a statistic to create a fall-out between government and media. Earlier this week The Irish Times ran an opinion piece with a headline likely to antagonise the industry:  ‘House building in Ireland is at a 15-year high. This is the truth, but it’s also Government spin’, suggesting that “although the Government certainly isn’t lying when it says that the 32,695 new homes completed in 2023 represents the largest annual delivery in 15 years, it shouldn’t try to insult people’s intelligence…”.

When it comes to home building in Ireland, recent statistics marking a 15-year peak in the construction of new homes, with 32,695 units completed in 2023, ostensibly paint a picture of construction progress and achievement. This figure, celebrated by the government, objectively marks a significant step in addressing the country’s housing shortage. However, a deeper analysis reveals a more nuanced reality, one that is still vulnerable to poor policy making. For this reason, it is important for the industry to understand the context behind these figures and the overarching policy framework that shapes them. The assertion of reaching a 15-year high in homebuilding, though factually accurate, hides a more complex issue. It fails to consider the decline in housing construction post-2008, and the subsequent stagnation in the housing sector. As pointed out by the Times piece, this decline becomes even more critical against the backdrop of a population that grew by 8.1% to 5,149,139 from 2016 to 2022. The mismatch between housing supply and demand was and remains painfully evident. Such statistical milestones, while noteworthy, should not serve as a smokescreen for the underlying challenges that persist in the housing sector. 

Also, governmental declarations of a 22% increase in new-home commencements in 2023 compared to the previous year, and the surpassing of the Housing for All target by almost 13%, while encouraging on the surface, do not adequately address the scale of need that exists. These achievements, though commendable, must be viewed within the context of targets that many argue are set too low to begin with. Industry leaders advocate for annual supply targets to be adjusted upwards to between 50,000 and 60,000 new homes to more accurately reflect and respond to the current and projected housing needs.

A critical factor in scaling up housing delivery is the availability and zoning of land for development. The current National Planning Framework, relying on outdated data, has led to the dezoning of land, thus constricting the pool of land available for housing. This point, underscored by developer Michael O’Flynn, highlights the necessity of revising planning and zoning policies to make ample and suitable land available for development, an essential step towards mitigating the housing shortfall. This makes it clear that Ireland needs a properly resourced planning system and a stable and competitive policy regime, as called for by many bodies, incling the IIP. 

The increase in housing completions is a welcome step in the right direction, but without comprehensive policy adjustments that address land availability, zoning, and financing, Ireland risks falling short of its potential to provide adequate housing for all its citizens.

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group