Ireland’s National Planning Framework is set to strangle Dublin’s housing supply

The residential housing targets and guidelines set out in Ireland’s National Planning Framework, the guiding document which determines how Ireland will develop over the long-term out to 2040, are fundamentally flawed and if left unchallenged, will only exacerbate the housing crisis. That’s according to the Residential Land Supply Study 2022, released by Savills Ireland, which stated that the four key elements of the plan are impeding the successful rollout of a residential housing development strategy that has the capacity to deliver sufficient homes in the right locations.


Commenting on the new report, Conor O’Connell, Director at the Irish Homebuilders Association (IHBA) said that it’s now quite clear that aspects of our land supply policies that facilitate housing supply are constraining the number of homes that can be built in certain areas. “There are significant implications for the provisions of much needed homes throughout Ireland and this report is a welcome analysis of the upcoming supply constraints that will impede the delivery of homes. An urgent review of these policies now needs to be conducted to ensure there is sufficient land for builders to build homes where they are needed.”

Speaking at the publication of the study John Ring, Director of Research at Savills Ireland, commented that Ireland’s residential housing market is already fraught with challenges and problems, but if we can’t get things right at a national level, then the trickle-down effect of these mistakes mean we are destined to fail no matter what resolutions we may find to the building and development issues.

“Our study shows that the reduction in the supply of zoned residential land, a focus on capping rather than boosting housing supply, an attempt to divert growth away from Dublin, aspirational rather than realistic timelines – and a rigidity around development sites – are the primary impediments that flow from the National Planning Framework as currently implemented. This must be assessed and altered if we are to make any headway into addressing our housing crisis.

“The focus on compact urban development at the heart of this strategy is a laudable and necessary objective if we are to achieve our climate change objectives, whilst also avoiding the legacy of urban sprawl that characterised the Celtic Tiger period. However, in the midst of a housing crisis, we must ensure that our goals are achievable rather than aspirational.”

Savills contends that the overall emphasis of the National Planning Framework is on capping, rather than boosting housing supply. “The focus should be on ensuring that minimum targets are met rather than maximums exceeded. We need a floor rather than a ceiling for housing delivery.

After a lost decade of housing delivery, we are producing just four homes per 1,000 people in Dublin, less than half of the nine per 1,000 recorded going back 25 years ago and just a quarter of the output of 2006. Similarly, in the Greater Dublin Area, we are producing seven homes per 1,000 compared to 12 per 1,000 people in 1996 and 23 in 2006. We need to implement stretch targets at this time to reflect the urgency of the situation, rather than limiting our ambitions to goals that are likely to fail,” added Ring.

The property advisor has set out four primary impediments that exist within the NPF to the delivery of Ireland’s much needed residential property:

The reduction of essential land for development
Savills research reveals that there has been a large reduction of zoned residential land available for development within the Greater Dublin Area (Dublin, Meath, Kildare, Wicklow), which would have had the capacity to accommodate over 100,000 units, or the equivalent of 10 years supply.

“The timing of the reduction in the supply of land for residential development adds a further hurdle to an already challenged construction market. Planning uncertainty has been especially elevated in recent years, making it very difficult to underwrite planning risk. In simple terms, it is difficult to persuade major developers to invest millions of Euro in acquiring and collating sites when they can’t be certain that the planning strategy and/or zoning won’t change in the meantime.

“Meanwhile, material and labour shortages continue to drive up the cost of construction, while borrowing costs are also increasing steeply. The culmination of these considerations impacts the viability of schemes at a time when economic volatility is high. Development uncertainty has arguably never been higher and cutting the supply of land at this juncture adds a further viability challenge into the mix.”

Flawed population projection and forecasting models
As part of the National Development Plan process, county councils are required to undertake Housing Need and Demand Assessments (HNDA’s) to estimate housing requirements for the coming six years. The analysis takes account of various factors such as population projections, age structures, tenure types and affordability considerations.

“The issue is that the overall population is forecast to grow under the 50:50 balanced population growth scenario contained within the NPF, which envisages growth to be equally split between the mid-east region (which incorporates Dublin) and the rest of the country. Under this scenario, Dublin city is set to grow by between 20% and 25% by 2040, a rate of growth just ahead of the national average. In contrast, the cities of Cork, Limerick, Galway and Waterford are allocated to grow by over 50% during the period, more than double the rate of Dublin. Basing planning on these growth patterns is flawed because they are unlikely to come to fruition.

“Economies of scale and resulting agglomeration effects in sectors such as tech are leading to a strengthening, rather than a weakening, of Dublin. Incoming foreign direct investment will not consult the goals of the NPF when deciding if and where to locate in Ireland. The majority will continue to go to Dublin where the talent pool is deepest. In this context, utilising the unrealistic 50:50 population projection results in a large reduction in the GDA housing target to 12,000 per annum, compared to the 22,000 per annum identified within the preceding National Planning Guidelines 2006-2022, and means we are structurally under provisioning housing supply in the Dublin region for the next 20 years.”

Lack of flexibility on targets and timelines
Savills say that the quantum of land zoned for residential development contained within the various development plans is too little to realistically deliver the required housing, even at the low targets prescribed by the HNDA’s.

“The NPF contains a maximum zoned land headroom allowance of just 25% over the quantum required to deliver on the HNDA target output – down from the 50% contained within the previous planning guidelines – and relies upon the vast majority of sites being successfully and fully developed within the time period of a development plan. This means that four out of every five sites must be developed within the development plan period to meet the housing target. There are many reasons why development may not proceed, even with the best will in the world, with risks such as inflation, the rising cost of finance and labour shortages just some of the serious challenges facing builders on a day-to-day basis.”

Rigid brownfield site development rules
As set out in the NPF, 40% of the delivery of new homes must take place on brownfield sites, i.e. sites already within urban areas. However, Savills argue that these sites are more expensive to develop due to logistical and environmental factors, being smaller in scale, as well as having legacy ownership structures which complicate delivery.

“If we really want to plan properly, the councils would need to put in place a system where they can reasonably ascribe a probability for each site such that an overall projection of likely supply is achievable within the timeframe of a plan. For the councils, this would require additional resources that are currently not at their disposal. The reality is that many of these brownfield sites are not going to proceed for a variety of factors as they are not economically viable, thus ensuring housing delivery targets are missed in the coming years.”

Finally, Ring added that by having a public policy perspective that’s based on desires rather than reality, as we currently have, we are planning to fail. “We can alleviate the current housing crisis and properly plan for Ireland’s housing needs, but these impediments must first be addressed.”


Denise Maguire   Editor of Irish Construction Industry Magazine & Plan Magazine