Delays in planning process see 20,000 homes waiting on decision

Construction consultants Mitchell McDermott expects total housing output this year to be 33,000 units but it will take until the end of the decade before 50,000 units a year is reached.

Plans for over 20,000 homes categorised as strategic housing developments (SHD) have yet to be determined by An Bord Pleanála while a further 8,139 are being held up by judicial reviews, a new report has found.

The report by Mitchell McDermott, an independent firm of construction consultants, said decisions on these applications are now overdue by an average of 16 months as housing affordability becomes increasingly an issue for prospective buyers.

A further 31,000 homes in SHDs have secured planning permission but have yet to be commenced.

The firm estimates that these delays are costing developers €125m which will be passed on to buyers in the price of homes.

SHDs are applications that go straight to An Bord Pleanála for decision and these decisions cannot be appealed. Developments that fall under this category include housing projects of 100 or more units as well as student accommodation units.

Paul Mitchell, one of the report authors, said the delays are “undermining confidence and creating uncertainty around so many developments”.

He added that while the SHD process has now ceased, “existing schemes still in that system need to be decided upon in an efficient manner”.

Unlike the costs of imported building materials, planning is within our control. But rather than deal with them effectively they are just being left to wither on the vine.” 

The delays in SHDs stand in contrast to the 98% of large-scale residential developments (LRDs), introduced to replace the SHD system, that have been decided on in time, with no outstanding judicial reviews for them as of the end of last year.

The LRD process was introduced in December 2021 and restores the two-stage planning process, with decision making for applications returning to the local planning authority in the first instance, with the subsequent right of appeal to An Bord Pleanála.

Mr Mitchell said the very different outcomes for LRDs provide some grounds for optimism.

The report notes that construction cost inflation as of the end of 2023 was running at 2%. However, this is forecast to increase to 4% this year.

Construction inflation in 2022 was running at 12%.

The report said it expects housing output this year to be around 33,000 units but it will take until the end of the decade before 50,000 units a year is reached.

Mr Mitchell said 168,000 people are working in construction in Ireland but to get to 50,000 units a year another 50,000 workers are needed.