The body representing developers has rejected the suggestion its members have been engaged in land speculation or hoarding planning permission — insisting it is a practice they have “no interest” in.
Conor O’Connell, the Construction Industry Federation's (CIF) director of housing, said that for developers “land is a raw material” only.
“We have no interest in land speculation. Our business is to build more homes for more people, our business is the delivery of homes,” he said.
Mr O’Connell's comments come following news that just 36% of the housing projects greenlit under the State’s Strategic Housing Development (SHD) system have broken ground since SHDs were introduced in 2017.
The scheme, designed for developments of 100 homes or more, was slated for cancellation in December 2021, however, 41 new schemes comprising almost 12,000 units have been granted permission since.
The news that just a third of those large developments have to date commenced led to claims that the system has been prone to abuse by developers seeking to capitalise on the increasing value of land.
Sinn Féin housing spokesman Eoin O'Broin said: “A large number of these developers weren’t genuinely applying for planning permission in order to build, but rather to speculate on the value of land.”
Mr O’Connell insisted this is not the case, with the slow delivery of such developments — which are dominated by apartment-centric projects — largely caused by the “dramatic effect” of post-Covid supply constraints.
“If you look at the projects with SHD approval, our members are reporting major challenges to us in terms of delivery,” he said.
He would not be drawn as to whether or not the CIF believes that SHDs have been unfairly appraised.
“We use the planning system that’s in front of us, that’s put in place by legislation,” Mr O’Connell said.
He said the greater financial risk attached to apartment developments — which in recent years have dominated SHD applications — meant that “the only people funding them really have been the REITs (Real Estate Investment Trusts, large-scale corporate landlords)”.
Traditionally apartment developments have been seen as more difficult to make commercially viable, given they cannot be built in phases as is the case with housing-only projects.
“With apartments you have to go all in, it creates challenges for the funders,” he said, adding that there has been “not much progress across the board” in changing the viability of such developments in recent times.
Despite this, Mr O'Connell rejected the notion that ‘use it or lose it’ legislation — designed to confiscate planning permission, which lasts five years, from developers who have not commenced construction on a site with approval — would have served to fix SHDs, or indeed the large-scale residential development system which will be its successor.
“Use it or lose it is a simplified notion in lots of ways,” he said. “The industry needs land supply, and planning supply.
"There is always going to be a need to have excess planning in place to ensure that the industry can move forward.”