The blueprint: 25 ideas to deliver 300,000 homes

Executive summary

• High construction costs, scarce land, and slow planning are all exacerbated by existing policies; to accelerate housing supply, immediate steps must be taken to cut costs, free up land, and speed up planning. 

• To reduce construction costs, regulations must enable the construction of affordable homes and the conversion of older buildings into new homes. 
• Artificial constraints to land supply, especially in Dublin, are driving housing scarcity. 

• Releasing more land does not require any changes to legislation. The Minister has it within his power to remove the cap on Dublin and change the way in which land is set aside for development.
• Planning delays are partly due to an opaque system which prioritises flexibility over speed. 
• Minor reforms to the development plan process could make development less risky and more ambitious.  

Introduction: a hundred small decisions

The housing shortage wasn’t caused by one big decision. It was caused by an accumulation of hundreds of decisions over decades. The aggregate of these decisions has seen housing costs spiral out of control.

To make progress on housing, we need to do the hard, unglamorous work of fixing, simplifying and removing rules and processes. Each individual process was put in place for a reason, to solve a particular problem. But they compound on each other. When you add them all together, you get a situation where it is illegal to build an apartment that normal people can afford. Where land capacity is being constrained in the places people want to live. And where planning can take years. 

No single policy will solve Ireland’s housing shortage. To undo the mistakes of the past, policy should comprehensively address each part of the problem.

This is why Ireland needs a new housing plan. In September, the government will launch their plan. To be successful, they will have to do at least three things: cut construction costs, free up land, and speed up planning. 

This paper sets out Progress Ireland’s suggestions on how to do just that. The paper is split into three sections accordingly: cut costs, free up land, and speed up planning.

Section 1: Cut costs

Housing is too expensive in Ireland. One reason is that we don’t build enough of it. But another reason is that regulations designed to improve the quality of new buildings have driven up their cost. Now, apartments built to the minimum standard are unaffordable for most households. That means that it is illegal to build an apartment that most people can afford. If an apartment costs €550,000 to build, it must sell for more than €550,000, or the government must subsidise it. To get prices and rents down, Ireland must cut construction costs, ensuring high quality and affordable prices.

The cost of the high cost of construction

High construction costs act like a handbrake on construction. They make the housing system move slowly. Ultimately, high construction costs mean fewer and more expensive homes. But why?

High costs increase the breakeven cost for development. Breakeven costs are the costs at which developers do not make a loss on a project. Breakeven costs work like a traffic light system. If it costs more to build an apartment than that apartment can be sold for, then the traffic lights will be red. This is what economists mean when they say that below breakeven costs, supply is totally inelastic. 

By the same reasoning, lowering costs increases housing supply. A recent paper by Günnewig-Mönert and Lyons measured the relationship between high costs and the supply of housing. They found that a fall in costs of approximately 10 per cent brings with it about a 19 per cent increase in supply.

High costs do not just affect the supply of private housing. High costs slow down the delivery of public housing too. As costs go up, the state spends more for less. The Central Bank notes that housing outlays have risen from €1 bn to €6.5 bn a year since 2014 and that Ireland now has the second-highest proportionate housing expenditure in the EU. 

Approximately €1 billion of housing expenditure in 2014 equated to circa 11,000 new units. In crude terms, that equates to about €90,000 of public spending per new home. In 2024, housing outlays per new home were €214,000. In short, the government is spending more and getting less for it. 

Whatever way you cut it, high costs mean fewer homes of all types. But how expensive is it to build in Ireland? And how does Ireland compare to other European countries?

How expensive is it to build in Ireland?

It costs about €550,000 to deliver a two-bed apartment in Dublin and €460,000 to deliver a three-bed house. Of these figures, the SCSI estimates that approximately 49 per cent is hard costs, while the Central Bank estimates the proportion to be between 40 and 60 per cent. Hard costs can be viewed as the cost of actually building the home, rather than the cost of financing it or taxes. Whatever the precise figure, their share of overall delivery costs is high.

Of ten European cities surveyed, Dublin is the second most expensive to build apartments. In Belfast, it costs €1,754 per square metre to build an apartment; in Dublin, it costs €2,363.

This chart includes everything from hard costs, such as concrete and electrical fittings, to soft costs, such as taxes and risk allowance. The chart gives an indication of the differences in specification between apartments in each country. For example, energy conservation requirements are higher in some countries than others. The higher these requirements, the higher the per square metre cost.

The rise in the cost of construction in Ireland is not entirely due to the rise in input costs either. Below is a graph of three indices, comparing their growth since 1971. The first is the consumer price index, tracking inflation. The second is a labour and material index, tracking the growth of input costs into construction. The third line, in yellow, is labelled ‘hedonic cost index.’ This line tracks the growth in the cost of construction of dwellings. 

When all three indices are compared, it is clear that the cost of construction has risen faster than the cost of inputs. 

Together, these lines paint a stark picture. Over the past 53 years, the consumer price index has increased 14-fold. In the same period, labour and material costs for construction have increased by just over 29-fold. Construction costs, meanwhile, have increased just over 45 fold since 1971. In real terms, construction costs in 2024 were nearly 2.5 times higher than they were in 1971. As we can see in the graph, the growth in the cost of construction has far outpaced the growth in labour and material costs. 

But why have construction costs risen so fast, ahead of input costs?

Why are costs so high? 

A big part of the answer to why construction costs are so high is the overregulation of building in Ireland. This is particularly true of apartments. At present, it is illegal to build an apartment that is affordable to most people. ¹

No single regulation is the source of high costs. For example, in 1995, a two-bedroom apartment in Dublin could be 55 sqm; now they must be 73 sqm. Windows which are now considered standard in Ireland are considered “premium” in Berlin. The minimum balcony size of a three-bedroom apartment in Ireland is equal to the minimum apartment size in Paris. All of these decisions–along with many more– increase the costs of delivering new homes. Alone, any one decision wouldn’t make an impact. But together, these decisions have meant there are fewer and more expensive homes than there needs to be.

Since Irish construction costs have risen so quickly, you might think Ireland is an outlier in this respect. But that’s not the case. When construction costs of an identical apartment were compared across EU markets, Dublin didn’t stand out. 

We’ve already seen that Dublin is the second most expensive city in which to build apartments per square metre. Here’s what’s going on: even though Dublin construction costs are not higher on a like-for-like basis, they are much higher in reality because Dublin apartments are bigger and nicer than their peers in Europe. The difference in construction cost comes down to a difference in quality, and not a difference in efficiency or input costs.

To see this, let’s compare the cost of construction in Dublin and other European countries. On a like for like basis, building an urban apartment in Dublin is no more than 1 per cent more expensive than Copenhagen (the cheapest city compared in the Residential Construction Cost Study). When building the same apartment in Berlin as in Dublin, the difference is less than 1 per cent. 

However, homes in each of these cities are not the same. There are important differences. When we look at the typical two-bedroom apartment built in each city, the cost differences widen. The hard cost of building the typical two-bed apartment in Dublin is €60-70,000 more than in Berlin.

This stark difference between build costs in Berlin and Dublin prompts the question: why is it so expensive to build in Ireland?

When size, quality, and specifications are included, the Residential Construction Costs study said Dublin’s apartments are significantly more expensive than Copenhagen, Utrecht, and Berlin. For suburban apartments, Dublin was 30 per cent more expensive than these cities; for urban apartments, Dublin was 33 per cent more expensive. 

Irish houses are typically bigger than in other countries. With size comes internal complexity. And internal complexity increases costs. One reason why Birmingham is cheaper is that their houses are typically smaller. Smaller homes typically mean simpler homes. In Birmingham, a 93 square metre home will not have an ensuite. In Dublin, new homes are larger (typically around 110 square metres) and fitted with an en-suite. As a consequence, homes in Dublin are 15 per cent more expensive to deliver than in Birmingham. 

When we turn to apartments, the quality differences–and cost differences–are even bigger. Irish apartments stand out as high quality in comparison to European countries. Dublin’s apartments typically have unusually high scope. In Copenhagen, Berlin, and Utrecht, apartments are commonly sold or rented without finishes such as kitchens, appliances, and fitted wardrobes. In Dublin, new apartments are typically ‘turnkey’, meaning they are ready to be lived in straight from the developer. Irish apartments also have more bathrooms.

What is true of these cross-country comparisons is also true of Ireland over time: Irish homes cost more to build now because they are bigger, warmer, and more complex than in the past. 

The best evidence available shows the influence of minimum planning regulations on construction cost. In 2007, the then Department of the Environment issued a set of national apartment standards. The government encouraged local authorities to change these standards in their own areas. Calculated by Mitchell McDermott, changes in 2007 to apartment sizes, dual aspect requirements, balconies, and floor-to-ceiling heights by Dublin City Council increased the cost of delivering apartments at the stroke of a pen. This graph shows the increased costs due to changes in regulation at the council level.

Construction costs for one-bed apartments increased by €32,000 relative to the minimum standards; two-beds cost €38,000 extra to build, and three-beds cost €34,000 extra. This is relative to a national minimum standard that, itself, marked a significant rise in standards (before 2007, there were no national minimum apartment standards guidelines). 

The influence of regulation on construction cost is clear both across countries and across time in Ireland. The 2007 changes in Dublin City Council added an additional 20 per cent in costs across a 100 bedroom apartment scheme.

How to cut costs

Regulations, such as the building regulations, protect the safety of households. Minimum planning standards uphold the idea that everyone deserves a high-quality home. But regulatory oversteps now mean that perfectly safe and high-quality homes are now banned from being built. To cut costs, Ireland must remove the ban on building affordable homes.

Minimum sizes are significantly higher in Ireland than in comparable European nations. In the Netherlands, new builds must be no smaller than 18m². In France, they need to be no smaller than 14m². In comparison, the minimum balcony size for a three-bed apartment in Ireland, 9m², is the same as France’s total minimum habitable apartment size (for existing units).

Sizes alone do not drive high construction costs. Balconies, for example, add about €10,000 per unit to the cost of building a two-bedroom apartment. Dual-aspect, which requires openable windows on two different sides of an apartment, add about €10-15,000 per home and is required for about half of all new apartments. This adds costs by limiting the number of homes per floor. It also adds costs by forcing designs which are unusual and costly. En-suites add about €5,000 per unit.² 

It isn’t just new builds which suffer from overregulation. The conversion of older buildings into residential use triggers modern standards. For example, if the floor area of an ‘above the shop’ unit is 25 square metres, it will typically be difficult to convert this unit into residential use. This is because the minimum studio apartment size is 37 square metres. While these may be waived in individual cases, many are not. A more pragmatic approach to regulation would lower the cost both of new builds and of renovations.

Section 2. Free up land

Ireland has an abundance of land. Ireland’s population density is 73 people per square kilometre. In the UK, it is 279 people per square kilometre. And it isn’t just in the countryside: flying into Dublin Airport, you will see the city is surrounded by green fields. Whatever Ireland’s problem with housing is, it isn’t space.

Government policy has restricted the amount of zoned land. Restrictions to land availability occur at every level. At the very top, national housing targets rest on an underestimation of unmet demand. The national planning framework (NPF) also restricts the amount of zoned land in the Dublin area. To compound this, local authorities interpret targets as caps, rather than as minimums. All of this is the result of policy choices. 

To build more homes, Ireland needs to free up more land. But why is freeing up land such an important part of addressing Ireland’s housing shortage?

Why freeing up land is important

Land is the essential ingredient in housing development. Freeing up land is important because a healthy supply of zoned and serviced land drives down land costs, accelerates housing supply, and may increase construction productivity. The converse is also true: artificially constrained land supply drives up costs, slows down supply, and may decrease construction productivity. 

Low availability of land relative to demand results in fewer homes being built. In their recent review of the empirical literature, Baum-Snow and Duranton claim that constrained land supply means fewer homes. It is easy to see why: if you cannot get land, you cannot build. A system that aggressively restricts land supply is one that restricts housing supply.  

Low land supply also drives up costs in at least two ways. First, low supply means that available land gets bid up. Land typically makes up about 10 per cent of development costs. This is a cost that is ultimately passed onto households. However, there is another and more subtle way in which low levels of land supply affect cost: productivity. 

It is well known, both in Ireland and abroad, that a fragmented industry made up of small firms damages productivity growth in construction as with other industries. One reason for this is simply scale. Small firms do not have the capital to reinvest in innovation. Nor are their projects large enough to achieve economies of scale. 

This suggests one reason for the Irish construction industry’s low productivity: firms are typically small, and small firms are typically less productive than big ones. 91.6 per cent of those employed in construction in Ireland are employed by an SME firm of 250 employees or fewer. The vast majority of construction firms in Ireland, 96.6 per cent, employ 9 or fewer people. 

But how does tight land supply cause the fragmentation of firms, and therefore poor productivity growth?

The simplified model for how this might work is that tight land supply makes it difficult to do big projects. Where there is only land capacity to deliver small projects, only small projects happen. And when there are only small projects, there can be only small firms.

All of this is to say: a healthy supply of land is important for a functioning housing system. Constrain land supply and you constrain housing output. But why is Ireland’s land supply so constrained?

Why land supply is low

At every level, Irish policy restricts land supply. 

Ireland’s housing system is hierarchical. Legislation and the national planning framework (NPF) are at the top of the hierarchy. Below these are regional, county, and city development plans. Targets set at the bottom rung must be consistent with those set from above.

At the top, Ireland’s housing targets are underestimating unmet demand by as much as 100,000 units. The NPF is capping Dublin’s growth, making homes scarcer and more expensive. Dublin’s cap comes not just from the top, it also comes from how each local authority interprets the NPF. At the local authority level, targets are treated as caps, rather than as minimums. Let’s get into each one of these problems individually. But before that, it is worth setting out how land is set aside or zoned. 

How land is zoned

Land is made available to build homes by the local authority in its development plan. Land can be set aside according to its use, such as commercial, mixed, residential, industrial, recreational and so on. 

The amount of land zoned for residential use is supposed to reflect the demand for housing in the area. To find out their need, the local authority prepares a Housing Needs and Demand Assessment (HNDA). The HNDA is a centralised spreadsheet used by local authorities to assess its housing demand under a range of demographic scenarios. The HNDA takes as its principal input the most up-to-date ESRI estimate of structural demand along with the government’s own target (more on this later). In short, the HNDA is the tool local authorities use to figure out how much housing is needed in their area. 

The HNDA is used by local authorities to create Housing Supply Targets (HSTs). The HST is the number of new homes, given demographic, financial, and other factors, that the local authority wants to see built. These targets feed into the local authorities’ Housing Strategy. It is the strategy that identifies the extent of residential zoned lands to be set aside for development.

150,000 missing homes: How the government is underestimating unmet demand

To reach any goal, it is useful to know how far away we are from reaching it. That is why it is important to have an accurate estimate of unmet demand. Unmet demand is the housing demand that currently exists which is not being met. But the government’s estimate of unmet demand rests on a mistake. 

The Department of Housing, Local Government and Heritage (DHLGH) estimated unmet demand as roughly 110-170,000 units. Whereas the Housing Commission estimated unmet demand as 212-256,000. That number was estimated over two years ago by the Commission and is likely to be over 300,000 by now. Why are these figures different?

According to the Department, the difference between these two figures is the result of a difference between the Commission and the ESRI’s estimates of household size. A household, in this context, is the number of people living together. In a world with large families, household sizes were much bigger. As people have fewer children, household sizes have shrunk. 

Household size matters because it determines how many homes are needed to meet demand. The difference between a household size of 2 and 1 is that you need double the number of homes to meet the demand for the same number of people. 

DHLGH says that the Commission estimated household size as 1.9 and that the ESRI estimated it to be 2.7. According to DHLGH, it is this disagreement that explains the difference in their estimates.

However, this distinction is not what explains the difference. There are two related but distinct ideas being confused by the department. One is where household size will be in the future. The other is where underlying household size is right now. 

Knowing where household size will be in the future is useful because it will tell us how many homes we will need in the future. If we expect household size to converge with our European peers, we will need more homes in the future. 

But that is distinct from what the underlying household size is right now. Underlying household size is what household size would be if people lived as they currently want to. A house share with three couples has an observed household size of six people. But if each couple wants a home of their own, the underlying household size is two. There is an unmet demand, in this case, for three one-bedroom homes. 

The gap between underlying household size and observed household size, as Professor Ronan Lyons put it, “is the housing deficit.” 

The government has dramatically underestimated unmet demand because it has confused these two related ideas. 

To land on their estimate of unmet demand, the Housing Commission used five different methods. They looked at the long-run household size trend in Ireland (which has fallen by approximately 0.31 since 1980). They studied demographic fundamentals, ie fertility and longevity. They looked at comparisons with peer countries such as England and Wales. They examined the EU-SILC “living with parents” evidence, which showed the share of 25 to 29 year olds living with parents jumping from a third to two thirds. On top of all that, they conducted their own survey of 18-39 year olds comparing their actual and preferred living arrangements. 

As long as these mistaken targets are in place, the supply of land will not be allowed to meet demand. Targets are based on an assessment of demand. And Ireland’s targets systematically underestimate unmet demand. By underestimating unmet demand, HSTs around the country are too low. Since HSTs partly determine the amount of land that can be built on, this error means that there is insufficient land to meet demand. 

I said that government policy restricts land supply at every level. Low national targets feed through to low local targets. But each location has different needs. We will now see how government policy restricts land supply in the areas with the highest demand. 

How government policy downzones Dublin

Revised this year, the NPF is the most important planning document in the country (besides the Planning and Development Act 2024 itself). The NPF is at the top of Ireland’s planning hierarchy. What is decided at the top flows downhill to Regional Spatial and Economic Strategies and development plans. What can be built, and where, is determined by planners using their city and county development plans. 

The NPF and its predecessors restrict the supply of land in Dublin. The NPF caps Dublin’s growth in the hopes that the growth will boost the rest of the country. This idea rests on a mistaken belief that restricting Dublin’s growth will divert growth to the rest of the country. 

It is national policy to pursue balanced regional growth. There are roughly two ways to achieve balanced growth: one is on the demand side and the other is on the supply side. In reality, government policy typically uses a mixture of these two strategies. The NPF is no exception to that, but it is worth prying them apart to understand their differences. 

The demand side strategy seeks to boost the attractiveness of regions. The basic idea is that if you want businesses and people to move somewhere, you make that place more attractive to them. The demand-strategy was advocated by the so-called Buchanan report in 1969 which sought to establish nine ‘growth centres,’ including Dublin. The idea was to allow these centres to grow by empowering them politically (via directly elected mayors). Buchanan’s approach did not advocate for any restriction on Dublin. Similar approaches have been proposed by the Irish Cities 2070 group, the Housing Commission, by economists, such as Eoin O’Leary, as well as an OECD report on the NPF. But what approach does the NPF take instead?

While the NPF does set out ways to boost regional attractiveness, it is not the only strategy it uses. The other option, the supply side approach, seeks to ‘move’ or ‘divert’ growth away from areas that have too much of it and towards areas that do not have enough. This is achieved by restricting growth in one area in the hopes that it will be diverted in the desired direction. Like with a balloon: you squeeze one end and the air moves to the other. 

The NPF does this through its 50:50 rule. That rule says that 50 per cent of Ireland’s population growth should go to Ireland’s cities. Within that 50 per cent, 25 per cent is earmarked for Dublin and the other 25 per cent across Cork, Galway, Limerick, and Waterford. But how do these targets translate into a cap?

The 50:50 rule is incorporated into the HNDA and HSTs. The HNDA takes the 50:50 targets as its “default population scenario.” It includes other scenarios but divergence from the default must be rigorously defended by local authorities. This means targets are based on where the government wants people to live more so than predictions of where people want to live. In practice, when setting HSTs, this means adjusting housing targets using the NPF’s targets. 

To illustrate, consider a hypothetical example of how the NPF changes population targets. Since the NPF’s 50:50 scenario is taken as the default, let’s assume that a given area has an NPF target of 10 new people. For simplicity, let’s assume that we’re just dealing with single person households, so that 10 new people means you need 10 more homes. Since the HSTs use the figures taken from the ESRI as well as the NPF, suppose now that the ESRI predicts demand for an additional 20 new people. The way the HSTs work is that if the ESRI’s numbers exceed the NPF’s 50:50 numbers, they split the difference. In this case, the local authority will adjust its Housing Supply Targets down to 15. In this hypothetical, there are five homes missing in the area. Those five people do not just disappear. They end up commuting into the area, emigrating, taking a less well-paid job in their home county, or cramming into a shared house. And all of this is the result of policy choices made in the drafting of the NPF. 

The problem with the supply side strategy is that growth is not like air in a balloon. Squeezing Dublin does not divert growth to the rest of the country. Growth cannot be easily directed by national plans. 

Take an example from the UK. After the Second World War, Britain attempted to restrict the growth of London and other successful cities in the hope this would assist regional development. The majority of empirical analysis has shown this to be a failure. For example, European research into schemes which sought to relocate industrial investment away from the Midlands and London found that they destroyed several jobs for every job that was successfully relocated. 

In Ireland, the policy has been just as damaging. Restricting Dublin does not “deflect” migration in predictable nor desirable patterns.

Due to the NPF, available zoned land does not meet demand. This graph from the Central Bank uses data from the Residential Zoned Land Tax data and the CSO. It shows the difference between the share of young people and the share of zoned land capacity across the country.

National policy has decided that, in areas like Dublin at least, the five people in the hypothetical example ought to live elsewhere in the hopes that this will result in a more spatially balanced country. To use the words of one planner, they will be “deflected”.

As the Housing Commission and OECD pointed out, there is no evidence that the 50:50 rule has resulted in the rebalancing of population across the country. The graph below shows the percentage change in population in given areas between 2016 and 2022. The NPF targets higher levels of growth in areas like Limerick and Cork, but actual growth levels are concentrated in the Greater Dublin Area (GDA). 

But the policy is worse than just failing to rebalance growth. It is actively harming Ireland’s capital. The last iteration of the NPF resulted in about 100,000 fewer homes being zoned for in the Greater Dublin Area (GDA) between the last two development plans. The National Planning Guidelines that preceded the NPF set a target of about 22,000 for the Greater Dublin Area per annum. In the last NPF, the GDA’s target was 12,000 per annum. 

The result is that Dublin’s housing supply cannot keep pace with demand. Despite significant job growth in Dublin, population growth has lagged behind. Of the 7,911 hectares of residentially zoned, serviced land with no active planning in Ireland, 40 per cent is in the Northern and Western region, compared to 34 per cent in the East. This is despite the fact that it is the Eastern region which has most of the jobs. This mismatch between land supply and employment opportunities is shown in the following graph.

How targets are treated as ceilings

There has been a strong political consensus that targets should not be treated as ceilings. This is one reason why section 86(7) of the Planning and Development Act prohibits planning authorities from refusing an application for planning permission solely on the basis that its targets have been exceeded.

There are two ways that land supply targets are treated as ceilings: bottom-up and top-down. The first is by councils themselves and the second is due to another provision with the NPF.

At the council level, there have been controversial cases of the dezoning of land. While Ministerial guidance advises against this practice, there is no equivalent of section 86(7) for land supply that prevents land from being dezoned on the basis that targets have been met or exceeded. 

From the top-down, the National Planning Framework puts a ‘cap’ on greenfield development. The NPF targets 40 per cent of new development as ‘compact growth’. This target sets a de facto cap on greenfield development at a time of immense scarcity. 

While the case against sprawl is well-known, the NPF defines compact growth as development in existing ‘built-up areas’. These areas are defined by the CSO and roughly mean areas that have artificial surfaces or some kind of urban land use. 

The problem with a cap on greenfield development, so defined, is that it is not a cap on sprawl. National Policy Objective 8 of the NPF states that at least 50 per cent of all new homes in Ireland’s major cities are to go within their built-up footprint. While this goal is desirable, it does not follow that development outside the existing built-up footprint of these cities would constitute sprawl. 
It is difficult to square the push for compact growth and direct restrictions on the land supply of Ireland’s capital. Due to limitations in land availability in Ireland’s leading employment centre, Dublin, many of Ireland’s workers are forced into long commutes. In 2019, Irish workers faced commute times in the top third of European countries. In this graph, you can see Ireland has the 10th longest one way commute on average.

One reason for these long commutes is that the areas in Ireland with the greatest population growth are commuter counties for Dublin’s labour market. These people do not move to Meath, Kildare, or Laois purely for the amenity (though some might), many move to access housing. These people are being pushed out of Dublin rather than being attracted into commuter counties. When we break down commuting times by county, we can observe two facts immediately, one about levels and the other about changes. The highest levels of commuting times are observed in the Greater Dublin Area. We also observe that between 2011 and 2022, commuting times are increasing in all counties.

 The gap on greenfield development, as above, is most stringent in Ireland’s cities. A high compact growth target of 50 per cent makes a lot of sense. But the interpretation of the previous iteration of this target as a cap has resulted in more dispersed development, rather than less. 

The simple reason for this is that greenfield development in Dublin is more “compact” than definitionally “compact” growth in Meath, Wicklow, Kildare, and Laois. The commuting time data shows that these counties are being treated as increasingly distant suburbs of Dublin. 

How to free up more land

To free up land, the government should remove its self-imposed restrictions on land supply. Land supply is being constrained by the misinterpretation of unmet demand, how housing supply targets are using the NPF, and how ‘compact growth’ is defined and interpreted. To free up more land, the government can ensure local authorities free up as much land as possible, ensure that local authorities do not place a cap on greenfield development in principle, and ensure that targets are treated as floors and not ceilings on ambition.

How to remove the cap

To remove the cap, the NPF’s 50:50 rule need not be changed. As I said, the goal is good and it’s politically popular. What can change is the means by which the NPF achieves it.

As before, the cap is operationalised through inputs called the Housing Needs and Demand Assessment (HNDA) and the Housing Supply Targets (HSTs). The HNDA is a tool used by local authorities to assess the housing needs of their area. The output of this process is the local authority’s HST.

The NPF’s regionally balanced population goals feed into the HNDAs, and in turn, the HSTs. The upshot is that in Dublin and the east, the amount of zoned land is lower than it would otherwise be.

Removing the cap is something the Minister can do at a stroke of a pen. Here’s how it would work. When preparing a HST, local authorities consider a range of ‘scenarios’ provided for in their HNDA. These were helpfully presented in the following table by Carla Maria Kayanan as follows:

At present, ‘convergence’ is the default scenario for councils when preparing their HSTs. Divergence from this default must be rigorously justified and defended.

This could be changed to remove the option for the NPF’s targets to decrease the ultimate target. What this would mean is that where the ‘high migration scenario’ (which, incidentally, is lower than each of the last three years of net migration) is higher than the NPF’s target, the council would have to choose the higher number. No splitting the difference. The new rule could be, in a phrase, always pick the largest number.

To illustrate this minor modification to the HST process, consider a simple example. A council in Dublin is preparing their HST. They take a look at their HNDA spreadsheet. The NPF’s default scenario aspires for 10 additional people in the area. But when they look at the high-migration scenario, it looks like there may be an additional 30 people in the area. This proposal says the council should always pick the higher number.

The NPF says it does not seek to limit the potential of Dublin. But the way the NPF’s targets work on the ground demonstrably does just that. This small change would show that while the NPF seeks to enable more regional balance, it will not place caps on Dublin.

Crucially, this change would still allow the NPF to increase the quantum of zoned land in those places where the NPF’s goals exceed projected demand. This change allows the NPF to boost Ireland’s regions without suppressing Dublin, a win-win.

To fully remove the cap, the Minister would need to reissue the HNDA and HST methodology to reflect the removal of the ‘cap’. Each document would need to make it explicit that councils must prepare their targets using the highest growth scenario.

Alone, this fix won’t totally align the targets with actual need. However, this small change could be achieved quickly. And the small change could make a big difference, not just to the capital but to the entire country.

Increase the buffer in urban areas 

In setting aside land for development plans, a buffer of land is set aside to provide “headroom.” This means that enough land to deliver an extra buffer of homes over and above the housing targets is set aside. The current guidelines recommend headroom capacity of 20 to 25 per cent.

Given how low land supply is around Dublin, applying a much higher headroom requirement for urban areas would release more land without changing the NPF. It would also assist in realising compact growth across Ireland’s cities. 

Allowing a 100 per cent headroom in Ireland’s two urban centres, Cork and Dublin, would not only build on the recommendations of the 1969 Buchanan Report but would apply a targeted means to dramatically increase land supply where the greatest deficits exist. 

No net decreases in land supply

Dezoning is when land which was available to build on is removed from a plan. Land can be rezoned or dezoned for lots of reasons. But in the last few years, there have been cases of land being dezoned because (among other things) housing supply targets have been met. It is hard to get a sense of how many cases have been hinged on exceeding targets because usually many more issues are cited (most typically, infrastructure deficits).

To prevent both the perception and reality of dezoning, the Minister can do two things. First, he can instruct councils that no land should be removed from availability or put into strategic reserve (“dezoned”) due to the area exceeding its targets.

The government has already made an important step to remove this problem when it comes to planning permissions. Prior to the Planning and Development Act 2024, planning permissions could be denied on the grounds that the area had met its housing supply targets. Section 86(7) of the 2024 Act fixes that. But the problem remains with land. This small change would fix that and could replicate the language in the 2024 Act above.

Second, when land must be dezoned, councils can be required to rezone other lands, ensuring that their net housing capacity does not decrease overall.

For example, a Section 28 Ministerial Directive of late 2024 enables landowners to opt-out of residential zoning. Any such dezoning could be required to be coupled with rezoning elsewhere. In a phrase, the new rule could be that no net loss in housing capacity is permitted due to dezoning.  

Remove the cap on greenfield development near cities

Greenfield lands near cities should not be dezoned due to the NPF’s compact growth targets. 

Just as 86(7) of the Planning and Development Act (2024) ensures no planning authority should refuse a planning application solely for the reason that housing supply targets have been met, similarly, the Minister could ensure that, in some cases, greenfield lands do not get removed from plans due to the NPF’s compact growth targets. 

City extensions are a sustainable way to deliver housing at scale. Extensions to Dublin will typically occur on greenfield lands. 

However, the NPF’s compact growth target is interpreted as a cap on greenfield development. This will prove to be an impediment to the delivery of housing at scale by limiting the amount of greenfield lands available to extend Ireland’s cities.

While compact growth is important, brownfield and infill development have proved highly challenging. It has also proved the most politically controversial. Setting compact growth targets as a proportion of development, rather than setting an absolute target, decreases net delivery at a time of immense scarcity. 

Promoting compact growth does not have to come at the cost of inhibiting city extensions. National Policy Objective 10 within the NPF promotes the idea of extending cities using transit links. However, this objective may conflict with the compact growth targets set out in the NPF.  

To ensure these two objectives do not conflict, compact growth guidelines could be amended to explicitly define city and town extensions as compact growth, ensuring that zoned and serviced lands outside of the built-up area of towns and cities can be used to deliver new neighbourhoods.

Section 3. Speed up planning

There are three ways planning limits development. First is by prohibiting things, whether at the plan level or in the final decision. The second is through uncertainty over whether things will be prohibited or not. Third is by the speed of the process. The second two are related. Uncertain processes are slow processes. This section sets out ideas to speed up Ireland’s planning process by making it more certain.

Why speeding up planning is important

A slow planning system drives up costs. As we have seen in previous sections, Ireland’s housing system is weighed down by high costs. We can observe the cost of delays in the data. Every additional month of development time matters to the success of a project. According to the Department of Finance, a six month delay can reduce the return on a project by 20 per cent.

Reduced returns conspire with high costs and low land availability to make investment in delivering the homes Ireland needs less attractive. As the following graph shows, private investment in housing is down 80 per cent from its 2019 level.

Why Ireland’s planning system hasn’t reached its full potential

While the vast majority of planning permissions get through, the system has come under increased pressure to increase performance. The ratio between the permissions applied for and granted is often discussed. But this doesn’t account for projects where applications were not submitted because the probability of being approved was too low or delay too high.  Our statistics do not count the homes that were not built because of Ireland’s inhospitable regulatory environment. 

One of the central challenges of Ireland’s planning system is its uncertainty. The Housing Commission, Irish Cities Group 2070, and NESC identified the “opacity” of the planning system as a major impediment to its speed. 

This lack of clarity may be interpreted as flexibility. There are virtues to flexibility. Not least among them is the ability for the planning system to offer bespoke solutions in unusual cases. This is a great skill of professional planners. However,  there is a trade-off between high levels of flexibility and speed.

The more flexible the rules, the less predictable their application in a given case and the less confidence that others can have that the rules will protect them. The more standardised they are, the less useful they will be in unusual contexts.

We can observe this trade-off in Strategic Development Zones (SDZs) and will soon observe it in Urban Development Zones. SDZs are areas designated by government due to their economic importance. The planning scheme is a set of clear and prescriptive rules about what is permissible to build within the SDZ. The clear rules of the SDZ planning scheme significantly speed up ‘activation’ times, that is, the time between when a planning permission is granted and the commencement of construction. According to a recent paper, SDZ sites are activated nine months faster, on average, than normal ones. While they were not as ambitious as the Strategic Housing Developments (SHDs), SDZs delivered homes fast due to, in part, their specificity. We should expect the same of UDZs.

International case studies suggest the importance of specific and ambitious planning rules for accelerating supply. In Croydon, London, the local council introduced clear planning guidance for infill projects. Homeowners and investors had certainty about what and where they could build. Between 2011 and 2022, the number of new homes on small plots (<.25ha) delivered in the city of London was 14; in Kensington and Chelsea, it was 163; in Croydon, it was 2,735. 

Data from Auckland gives strong evidence that reforms to speed up planning stimulated construction, leading to 21,808 additional dwellings after 5 years, about 4 per cent of the city’s housing stock. Comparisons between Auckland and other cities in New Zealand show the reforms led to rent reductions of up to a third compared to a case without any upzoning. Even more dramatically, upzoning in a Wellington NZ suburb roughly trebled consents per capita and housing starts over six years, reducing rents by up to 21 per cent.

The lesson here is straightforward: data from Ireland and abroad suggests that clear and specific planning rules enable a quicker planning process.

How to speed up planning

In the previous section, I explained the importance of specificity in planning. The government has taken important steps in this direction, both with the introduction of design guidelines and with the introduction of Urban Development Zones. But more can be done to carve out pockets of certainty that will enable a less risky, quicker, and more efficient planning system without major reforms. 

Encouraging the development of small homes

First, particular types of dwellings or extensions to dwellings could be encouraged and facilitated by planning policy. I will mention three: upward extensions, seomraí, and mews housing. 

Upward extension can enable more intensive use of plots, enabling greater levels of compact growth. A design code could expedite the planning process for architecturally attractive upward extensions.

Similar policies have seen some success in the United Kingdom. In South Tottenham, local planning rules enabled the upward extension of family homes, enabling greater levels of intergenerational living, while adding to the architectural amenity of the area.

The home in this image was upwardly extended, adding an additional storey while contributing to the architectural amenity of the area. This was due to the clarity of the design rules adopted by the local authority. In Ireland, similar rules could enable the gradual upward extension of properties while reducing planning risk for building owners.

The government is correctly pursuing an examination of potential exemptions for internal subdivisions of properties. Combining a clear and prescriptive design code for upward extensions with these exemptions could enable greater compact development and additional housing supply. 

Second, seomraí or granny flats. While the government has announced their intention to exempt detached structures from planning this year, some details remain to be decided upon.

There has been ambiguity around whether the proposal will allow seomraí to be rented. 

The arguments for allowing these homes to be rented are quite simple: Ireland needs more homes, especially small units near jobs. Allowing seomraí to be rented will allow for greater flexibility. A seomra that began as a means to provide accommodation to a family member can later be used to generate additional income. 

This is a win-win. Renters will see more options, and homeowners will be able to generate some help with the cost of living. But like with any form of renting – from having lodgers to renting out the whole house – there will be challenges. But these challenges should be weighed up against the status quo. If you’re worried about the size of these units, the relevant comparison is not a world of limitless 90 square metre southwardly facing A2 rated apartments. Rather, for a lot of people, the alternative options are crammed sharehouses, living in your childhood bedroom, living in a mobile home or caravan, or emigrating.
Finally, mews homes. Mews homes are compact dwellings typically using garden space which back onto laneways. One of the winning entries to the Housing Agency’s Housing Unlocked competition, Start Spreading the Mews, suggested that allowing the development of mews homes could deliver 15,000-20,000 new homes just within the M50. Clear planning rules could enable compact development in Irish cities, allowing for the speedy development of mews homes across the city.

Making development plans more specific 

Local development plans govern what can be built in a local authority area in a given time frame. They might run to 1,500 pages, including appendices. They reference hundreds of overlapping goals and priorities. On one page of the Dublin City Council’s local development plan, for example, the council commits to: build on local character, integrate active recreation, integrate community centres and halls, promote alternative modes of transport, promote low traffic neighbourhoods, promote sustainable design, promote liveable and attractive places and provide inclusive community facilities. 

There are many policies found in development plans, and the policies are rarely specific. It is left to planning officers to decide on a case-by-case basis how these overlapping policies apply to any given development. In a more specific system, the council would say plainly what is allowed and what is not. Specific rules let the state clearly articulate its vision for sustainable communities. They let the public clearly understand what’s allowed in their areas. And they let developers know in advance what projects can and cannot go ahead.
The Minister could instruct officials to reissue guidance on Development Plans, ensuring they are made more ‘specific’, resembling SDZs more than the current development plans. This is already occurring in piecemeal fashion. Master plans have emerged for areas of special interest, such as Ballyboggan or Clonsilla. However, delivering homes at scale means making clarity the rule, not the exception.

This decision will come with transition costs. To ensure these are targeted, the Minister could begin by instructing the city councils with the greatest demand, such as in Ireland’s five cities. Design competitions could leverage the private sector’s resources, allowing overstretched planning authorities to deliver plans efficiently. 

1. By illegal, it is meant that a development consisting of apartments of the kind that are affordable would be in breach of planning regulations and therefore would never be allowed to be built. ↩︎
2. These figures are the result of consultation with two respected firms specialising in quantity surveying and construction consultancy. They are necessarily notional since any savings will in part be the product of design choices. However, they give an indicative sense of the magnitude of savings. ↩︎