Housing LandOne of the great innovations of the past few years has been the increasing availability of spatial data. User-friendly and freely accessible online interactive tools such as Myplan and AIRO provide easy access to a wide-range of mapped datasets and other resources to help inform policymaking, research and those commenting on matters of public interest. However, despite this, the problem of what Carol Weiss refers to as the ‘problem of little effect’ remains i.e. that a great deal of this evidence tends to sit on the shelf (or on the web) completely unnoticed and has, in fact, very limited impact on policy debates.

This is certainly true of Colm McCarthy’s most recent commentary on housing supply in Dublin. McCarthy’s long-standing thesis has been that the planning system (zoning) caused an artificial scarcity in the supply of development land for housing in and around Dublin throughout the Celtic Tiger, inflating a massive property bubble and simultaneously scattering new residential development to the four winds and far-flung corners of the Midlands and beyond. He further maintains that it is these same restrictive practices, with local authority planners and politicians unwilling to confront vested interests and local communities to zone more land, which is the root cause of the current lack of housing supply in Dublin. Instead, McCarthy argues, that the power to zone underutilised land should be removed from local authorities and centralised. (On this last point, he overlooks that zoning powers were de facto centralised with the introduction of the 2010 Planning Act.)

While this simple supply/demand thesis may, at first glance, appear convincing, it is undermined by one basic flaw. Throughout the Celtic Tiger period there was in fact an enormous surfeit of zoned residential land within Dublin and its environs. An audit carried out by the DoECLG in 2010 found that a total of 3,302 hectares of undeveloped residential zoned land existed within the four Dublin local authorities. Even with conservative residential densities of 35 units per hectare, this was sufficient for at least 115,000 new homes. Within the adjoining Greater Dublin Area (GDA) counties of Kildare, Meath and Wicklow there was a further 4,120 hectares. Most, if not all, of this land was initially zoned in the late 1990s and early 2000s and remained undeveloped throughout the Celtic Tiger period. For example, the 220 hectare Adamstown site in South Dublin was originally zoned in 2001 and was intended to provide 9,950 homes via a ‘fast-track’ planning scheme approved in 2003. Similarly, large greenfield tracts of land at Carrickmines, Clongriffin, Pelletstown, Phoenix Park Racecourse and Hansfield were all zoned well over a decade ago and remain undeveloped or only partially complete. The figures above are exclusive of the abundant supply of brownfield development land, infill sites and mixed-use zonings readily available throughout Dublin and which could potentially have provided for tens of thousands of additional new homes.

It is evident, therefore, that a deficiency in the availability of zoned land was not the cause of the extreme property price inflation in Dublin throughout the Celtic Tiger. Nor is it the cause of new housing undersupply today. The most recent 2014 residential land availability survey by the DoECLG shows that there are currently 2,654 hectares of ‘Stage 2’ zoned land available in Dublin i.e. lands which have been prioritised as potentially available for immediate development, much of it already benefiting from significant public investment in capital infrastructure and services. This is reported to be sufficient to provide approximately 117,000 new dwellings at modest densities i.e. an increase in the total number of dwellings in Dublin by one-quarter. In addition to being zoned and serviced, many of these sites currently also have extant planning permissions. In the remainder of the GDA there is enough land zoned for a further 95,000 dwellings, while zoned residential land nationally could currently accommodate approximately 415,000 units (The DoECLG have even gone to the trouble of mapping the precise location of each of these zoned land parcels). Despite the vast array of evidence to the contrary, it is therefore remarkable how the notion persists, particularly amongst leading economists, that an obstructive planning system is hindering the operation of the housing market and was, and remains, a chief cause of the undersupply of new dwellings to meet demand. For example, earlier this week in his evidence to the Banking Inquiry the former chief economist of the Central Bank, Tom O’Connell, submitted that: “the demand mania for property took off against the background of restrictive zoning which limited the supply of housing, the inevitable result was huge property price inflation”.

Zoned Land

The extent of zoned land currently available in the Dublin metropolitan area for new housing

What this analysis also plainly overlooks is that the simple act of zoning land (colouring in a map) does not ipso facto result in an increased housing supply. Urban development is a complex and heavily capital intensive enterprise on both the supply-side (buildings, roads, sewers, schools etc) and on the demand-side (mortgages) and requires a functioning credit system, state intervention through public planning and a means to bring zoned land into production (i.e. to prevent speculative hoarding). While it may seem counter-intuitive to economists , it was in fact a massive oversupply of zoned land (Ireland had c.44,000 hectares of undeveloped zoned residential land at the end of the Celtic Tiger) that caused the rapid price inflation and poor spatial outcomes of the property bubble. Within Dublin, planning typically operated with a certain modicum of probity (albeit not without serious deficiencies), requiring that development on zoned land took place somewhat in tandem with physical and social infrastructure delivery. Outside Dublin local authorities generally had no such compunction, zoning land and permitting massive developments willy-nilly, including regularly on land with no zoning whatsoever. Facilitated by the shiny new radial motorway network and cheap credit, developers simply leapfrogged the suburbs and extensive hinterlands were turned into fields of gold leaving a disastrous economic, social, environmental and spatial legacy. Amongst the Dublin developer cartel, there were few complaints at the slow pace of real development as paper asset prices continued to soar. Ironically, had restrictive zoning measures actually been put in place and enforced in accordance with the National Spatial Strategy, it would have precipitated the early confrontation of the supply/demand/location problem – and history would have perhaps taken a different trajectory. Such problems  were of course foreseen by the Kenny Report as far back as 1974.

Rail Focussed

Strategic rail focussed housing land-banks available in Dublin  

The solutions to today’s housing supply issues are not to be found in simplistic calls for more zoning.  One of the curious outcomes of the relatively slower pace of development in Dublin during the Celtic Tiger is that we now have more than sufficient suitably zoned and serviced land available to meet current demand. The National Transport Authority, for example, has identified strategic locations where thousands of new homes could be sustainably delivered focussed along rail and light-rail corridors. In a number of cases rail stations have already been constructed in anticipation of future development. What is needed is a means of prioritisation and to bring this land into production. Earlier this year, the Department of Finance launched a public consultation on precisely this question. The current Housing and Urban Regeneration Bill 2015 proposes the introduction of a vacant site levy to disincentivise the underutilisation of brownfield land. What is now also urgently required is the introduction of a similar Site Value Tax (SVT) as a recurring annual charge on all undeveloped zoned land as recommended by the Commission of Taxation in 2009 and by the ‘Thornhill Report’ in 2012. The numerous compelling arguments commending the merits of a progressive SVT have been well rehearsed elsewhere and McCarthy, of-course, will be well familiar with same, having previously written the preface for a notable book on the subject. We need smart future-orientated solutions to make best-use of available resources to solve Dublin’s housing supply issues and not a return to failed past thinking and the exclusively supply-side logic of the Celtic Tiger.

Gavin Daly