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DDPA on Land Banks and Speculation - the real issues holding back housing supply

Updated: Sep 11, 2023

Sir, – The Department of Public Expenditure and Reform report on Planning Permissions and Housing Supply has certainly struck a raw nerve in those “involved in facilitating new residential development” (Donald MacDonald, Letters, December 27th). The report noted land-banking, viability and speculation as reasons for the slow take-up of granted planning permissions.

We fully agree his main thesis that the funding model is what is broken – not those things that have been blamed up to now by the industry for its failure to deliver supply. He is also courageous to note the capacity issues in the industry – a real challenge to delivery that must be addressed and solved.

Mr MacDonald notes that planning permission is “only one element of what is required”, a refreshing contrast to the usual industry mantra of planning permission stopping development, which has led to the attack on the right to judicial review in the forthcoming Planning Bill.

He seeks to justify “land value increases as a result of securing planning permission” on the basis of the planning system being dysfunctional. I question this assertion. The granting of planning permission for development has always increased the land value of the site and there has never been any connection between the planning system and the delivery of housing. Any dysfunction in the planning system has come about as unintended consequences of changes made at the behest of the property industry. Since 2015, the government has done everything that the industry has asked of it, from the notorious “Specific Planning Policy Requirements” ministerial directives to the failed “Strategic Housing Development” system and the current “Large-Scale Residential Development” process, when all along the broken part was the funding system.

Similarly, I challenge his view that land price is “probably” between 8 per cent and 10 per cent. While escalating costs and profits reduce its proportion, a review of the sales prices of development lands and the numbers of units granted permission shows a very different picture, closer to the 33 per cent that he previously noted.

Whether or not his plea for State subsidy will be successful, his identification of “the real issues of funding and viability” certainly warrants serious consideration. We all have our part to play and Mr MacDonald’s experience, particularly in apartment developments, is very valuable in this context. What we share is a frustration at our collective failure to provide homes for the inhabitants of our country. The Dublin Democratic Planning Alliance has been saying this for the last two years. We held a collaborative workshop in Wood Quay recently on the theme of “Solving Housing”, gathering a wide range of stakeholders and participants to look at the real issues holding back housing supply – particularly in achieving the right supply. Like Mr MacDonald, we identified not just the viability issues, but the market issues and the challenge of affordability – the most crucial aspect of the needed supply and the one most ignored by the industry.

Finally, may I reassure Mr MacDonald that the Department of Public Expenditure and Reform report to which he refers, prepared by the Irish Government Economic and Evaluation Service, clearly states that the views in the report are not the official views of the Department or the Minister. This is normal for any analytical notes. However, the report should be compulsory reading for all those involved in housing and planning policy. – Yours, etc,


Dublin Democratic

Planning Alliance,

Dublin 6.


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