Developer Michael O'Flynn says the new government needs to radically re-think housing delivery

That issue was housing.

The reality is people are very unhappy, indeed angry, with the current situation on housing. Voters have put their faith in the two large parties to deliver - but have also given them a clear message on the doorsteps that when it comes to building more homes, a radical improvement is needed.

Put simply, more of the same is not acceptable.

This is not to say for a moment that we have not made progress. More homes are undoubtedly being delivered, compared to say, ten years ago. But that progress is coming from a very low base, if you consider that back then almost no new housing supply was being produced.

What is more, the targets we had set ourselves were simply too low to meet the levels of demand in the market – and did not even begin to deal with the deficit of housing that we needed to address.

There is now, albeit very belatedly, a recognition that the new target should be between 50,000 and 60,000 homes per annum. However, under the current approach we have only delivered in excess of 30,000 homes each year and this despite the fact that we have been dealing with the “low hanging fruit” or those that are easily delivered.

So, it must be blindingly obvious to the political system that delivering almost double what we have achieved to-date is going to be a mammoth task which will require a totally different approach in how we go about it. We need a complete reset in our approach. The question is, will the new Government recognise this and act on it. If they don’t, they are guaranteed to fail.

We need new structures to deliver more houses. If the existing structures and planning policies have failed to deliver to-date, we cannot continue with them and expect them to suddenly start to deliver the volume of housing now required. We were promised that the new Planning and Development Act would bring about radical and meaningful changes in our planning system. The consensus in the industry is that there is very little in it that will make a positive difference and some new provisions take us a step backwards. For example, a provision which deemed a local authority to have agreed with compliance submissions if they failed to respond within the statutory time frame has been reversed so that they are now deemed to have disagreed, leaving the developer with a planning permission which they are unable to implement because of delays in the local authority and having to bear the cost of an appeal to an Bord Pleanála. Nothing has been done to address the 18,000+ homes applied for under the SHD process which have been held up in the planning system, some for over 2 years and now face the prospect of being adjudicated under different planning laws and different Development Plans. This tolerance of bureaucratic failure must stop.

No provision in the new Act comes into effect until a Commencement Order is made. There are rumours that it is already accepted that some sections will never be commenced.

The new Planning Act is definitely no silver bullet.

An immediate requirement of the new Government is to move to zone significant tracts of land and move away from the policy of recent years of actually dezoning land already targeted for housing. We only have to look across the water to see the determined and brave moves being made by the new British Government in their efforts to tackle their housing crisis. In an act of immense political bravery, the Labour Government has committed to doing things the previous Government failed to do. They are radically transforming the planning laws in the UK so that they begin to deliver housing, rather than acting as an impediment to delivery. This includes overruling local authorities and MPs who seek to block new development. This is the kind of thinking and action we need if we are serious about drastically increasing supply. Change won’t happen without change.

A recent appearance of officials from the Department of Housing, Local Government and Heritage before the Oireachtas Committee on housing disclosed a lack of understanding on their part on how housing deficit should be calculated.

Other examples of policies based on poor understanding of the real issues include bizarre policy decisions that have increased the cost of housing delivery and disincentivised housing investment. Incredibly, in the midst of a housing crisis, when the focus should be on simplifying the delivery of land and homes, recent decisions have made it more complex.

No greater an example of this was the introduction of the Residential Zoned Land Tax, or RZLT. Introduced in the mistaken belief that there were thousands of acres of zoned land that were deliberately not being built on, all it has done is to scare away investment and make houses more expensive. The concept of a tax on land hoarding is a good one but not when it becomes a tax on development – this adds to the cost of housing.

There is no shortage of demand for zoned land, and no shortage of ambition to develop it. However, the proposed new Land (Zoning Value Sharing) Bill is a prime example of policy makers lacking understanding of the impact of their proposals. Heralded as a tax to capture 25% of the uplift in value from zoning of land, it ignores the fact that currently 33% is already captured through CGT, as well as the 20% captured by means of Part V Social and Affordable housing provisions. When you add all of those to development contributions paid, over 85% of the uplift is already taken by the State. VAT paid on serviced land and the VAT paid on new houses result in the tax take by the State from new housing far exceeding 100% of the uplift in the value of the underlying land. The more the State takes in taxes from the process from zoning land to housing delivery, the more it adds to the cost of the houses ultimately delivered. Zoned land will not be developed until it has planning. Planning applications for housing developments are costly and complex and require input from the party proposing to develop the housing. Land will not be sold if the State insists on taking almost all of the value of any uplift arising from zoning. If it is not sold, it will not be developed. The proposed new tax is causing turmoil in the market and is currently driving up the value of land with planning permission and reducing the incentive to sell or buy zoned land. It is adversely impacting investor appetite for housing in Ireland. It beggars belief that our policy makers do not understand the seriousness of the damage they are causing by this proposal.

So, let’s get real. We have a deficit of 300,000 homes. That means there is a deficit of over 30,000 homes in Cork alone. We need to tackle this deficit by streamlining planning decision making and building quicker. On top of this, we need at least 60,000 homes at a national level per year for the rest of the decade to meet current and future demand.

Against this somewhat gloomy backdrop, however, there is a blueprint for progress. Earlier this year, the Housing Commission, of which I was a member, made its recommendations to Government. The incoming administration could do worse than to urgently consider what we proposed.

A key recommendation was to establish a group, with legislative powers, to tackle the barriers to housing supply in Ireland. The group, known as the Housing Delivery Oversight Executive, would exist for five years and be empowered to clear the blockages that prevent the timely delivery of new homes. One of the benefits of the Housing Commission in terms of assessing housing was that the Commission membership and membership of working groups included people actually involved in the front line of public and private housing delivery: people who have a proper understanding of the issues and real experience of how they impact. The Housing Delivery Oversight Executive would include such people and unless such people are given teeth in terms of steering housing policy, there will be no meaningful improvement in the delivery of public or private housing.

The Commission made other recommendations that the new Government should also act on as a matter of urgency. One proposal – to base housing policy on an assessment of the housing required for a well-functioning society, and that this should not be conflated with market demand or construction sector capacity - seems like a no-brainer.

So too does the alignment of housing provision and economic development in the National Planning Framework to ensure sufficient housing supply to meet the needs of the population in all parts of the country.

Crucially, Recommendation No. 10 to assess all policy measures and interventions against their impact on housing supply is vital.

So, whilst the crisis is severe, there are solutions.

And as the new Government takes over, and hopefully takes on these ideas, we in the sector will play our part. O’Flynn Group will have built 350 new homes in 2024 and is looking forward to delivering in excess of 450 next year.

The question now is, will the new Government take a bold approach or continue down the same path which simply cannot deliver. By taking on a new approach early in the life of this new Government there is a good chance of success. In my view the electorate will deliver a damning verdict if the crisis in housing is not resolved during the lifetime of the new administration.

It is time to act and be ambitious in our decisions and policy making.

• Developer Michael O’Flynn is chairman and CEO of O’Flynn Group and a member of the Housing Commission which reported in 2024