The Past Can Hurt
But you can either run from it, or learn from it
I’m fully aware my blog is heavily titled towards criticising public policy, and probably comes across as whiney and annoying. It is important for those who think they have some knowledge on the subject to speak up, because it is technical in nature and isn’t easily described in a headline or in a TikTok.
So I’m going to keep writing it because you nerds you keep reading it.
Some quick notes on the new housing plan which is officially called Delivery Homes, Building Communities 2025-2030. They are clearly running out of ideas for naming these things, which is the first clue as to how things are going.
LDA
The LDA being injected with more capital to effectively bring about a semi-state into the private housing market is ridiculous. Through no fault of the people who work there, the LDA cannot develop lands in a cost effective manner, because as a semi-state it has A) its hands tied up in procurement rules, B) is by definition run by a committee and C) will never have a true commercial mandate. So the result of this will be that they end up delivering property into the private market for a greatly increased cost to the exchequer than it otherwise would have been.
Planning & Development Act 2024 (the name is important)
In an act of absolute self sabotage, this is still not fully commenced. I did a podcast episode with Brendan Slattery (the legal GOAT of planning law) fucking EONS ago where the first stage of this law was enacted which regulated circuses. The fact that it is still not fully commenced would be laughable if it was funny. The new housing plan goes into detail on the commencement schedule, for example taking a bow for doing the bit that ‘established An Coimisúin Planalá’ - when by established they of course mean changed the name. The excuse given for this long drawn out commencement, where a law passed in 2024 may not be fully operational until 2026, is to ‘give time to market participants to adjust to the new measures’. I don’t know who these market participants are. Literally the entire private market would’ve accepted the commencement of the law in full on day 1, which may have sped up certain parts of the housing market. Instead, 18 months are lost again and we aren’t getting them back.
The Housing Activation Office (The Czar!)
Well, it won’t be Mr. 430k who gets this job but whoever does has to navigate this fucking bullshit:
I have drawn what this chart should look like, and no I don’t take commissions:
Maybe we should’ve let Brendan have the 430k after all because it seems the ‘broad powers to kick in doors’ that have been granted to this person amount to a bill pay mobile phone and a bevvy of staff to send emails. Make of that what you will.
Strengthening The Judicial Review Process (yes you read that correctly)
The document literally titles the section on JR’s as Strengthening rather than weakening as if all the JR people will just read the headline and think oh right that’s fine and go back to polishing their doc Martens.
Like come on. Obviously the aim is to weaken the process so that there are less JR’s, even if in reality they are tinkering with it rather than making any substantive change. It may seem like a small thing but to me this encapsulates everything that is wrong about what’s happening. Trying to be all things to all people. Telling everyone they can have what they want. It’s a big massive fucking lie for a government to tell. JR’s have to be reduced, that’s a fact. Will it solve the problem on its own? No of course not. Just tell people that. Just say ‘this is a crisis, we have to take extraordinary measures’. Instead this softly softly nonsense just means that absolutely nobody buys into the message, apart from the Government themselves.
RZLT
Another victory lap here whey they claim land sales were up 30% and land prices were down 6% (absolutely no attribution) and that that was because of the RZLT? Land prices were down because the market is FUCKED and it’s next to impossible to acquire land with planning permission and land without it is so toxic that there are often no buyers apart from the state itself. The RZLT was a good idea, its introduction was botched because the people implementing it had no idea what they were doing and didn’t bother to ask anyone who did. It should be scrapped.
Apartments the 9% VAT rate
This is a good idea but I don’t think it’s going to make much difference because while it will bolster the profits of builders who plan to deliver apartments, it doesn’t change the underlying reality that nobody (apart from the state) wants to own these apartments in a volume and at anything approaching the price needed to justify them. I don’t believe it is well understood just how incredibly unappealing it is for investors to fund new rental stock currently. I have droned on about it, as have others, and it’s not sinking in, despite the fact that there are basically no private rental units under construction now. The for sale market would be buoyant if 2 bed apartments could be delivered in Dublin for 400k, but they can’t be*, so the volume of units will be restricted to well off people buying step down homes or units for Saoirse and Ronan so they can go to Trinners without the headache of a house share. The vat cut reads like a sop to builders, when really it probably won’t make much difference. By the way I absolutely hope I’m severely wrong about this.
*Absent the Government providing subsidy, which they are sort of trying to with Living cities, but this is not sustainable to say that private housing needs to be directly subsidised by the state. How will you take this away? It will be like the CAP subsidy to the farmers, permanent.
Apartment Cost Cutting
Sorry not sorry but this is just a lie:
MMC
Just don’t get me started about this. MMC sounds so good to people who don’t know which end of a shovel to put in the ground. It is a buzzy TLA and has limited use in Ireland due to (among other things):
Lack of standardisation among local authorities and their complete and utter refusal to embrace it
Building regulations being much tighter here than essentially anywhere else in Europe
Construction materials having to be imported here, which bakes in higher costs to begin which will be unaffected by building in a factory
Lack of volume even if above issues didn’t exist
A market utterly dominated by short term state investment is not attractive to invest in (investment needed to build these magic MMC factories) because when state inevitably stops spending its, you know, an issue
One thing MMC is great for is to act as an excuse for politicians to come up with reasons why costs are so high “oh we don’t use MMC we should be doing that costs would come down”.
Finally
You can’t fault them for trying. They are trying, that is evident. But they are failing and that’s going to keep happening if they don’t accept certain realities:
Government doesn’t know how to deliver housing at scale, so they should ask people who do how to get going (ie builders)
When they get told, they should implement those suggestions with speed (shock and awe)
The financial measures should be temporary until they get a good deal of production going (no welfare industry)
It should be explained clearly to the public that these measures are not that palatable but are necessary (emergency)
Don’t overpromise
This last one is the biggest sin. Successive Governments have overpromised massively on what was possible for them to achieve, even if they had done the right things. There are housing shortages in every corner of the western world, pretending that we can make announcements and make little tweaks and there will suddenly be 50-60,000 units a year built is really stupid. That was only going to happen if they left the PRS guys alone (they didn’t) and even if it had happened, it wouldn’t solve all the issues around housing (homelessness is not just a supply issue for example).
The impulse to try to make up for past mistakes is a human thing, we all do it, rushing places when we could’ve got up 10 minutes earlier, but if we don’t learn from our past mistakes nothing is going to change and we’ll still be talking about this shite 10 years from now. Listen to Rafiki!
PS - Go buy Mike Bird’s new book The Land Trap and read it and then you can unsubscribe from my substack and everyone else’s because he clearly explains what went wrong basically everywhere.