Large-Scale Residential (LRD) Bill – Will it Help the Housing Shortage?

In this instalment of our Housing for All Blog Series, we look at the new replacement to the Strategic Housing Development bill – the Large-Scale Residential Development bill (LRD) 2021. An ever-changing bill that finally came into law on the 17th December 2021.

The LRD process, much like the SHD process, is designed to fast-track the planning decision-making process, thereby allowing for the faster delivery of housing. It covers developments of 100 housing units or more, student accommodation developments comprising 200 bed spaces or more, or a combination of same. It also includes a three step process of pre-application consultation, planning application stage and an appeal stage, however the main difference with LRD is that the first two stages are carried out by local authorities and the third stage, where required, with An Bord Pleanála.

There is no doubt that change is needed – in the 5 years that the SHD has been in existence, it seems to have over promised and under delivered. Planning is still ranking number 1 in the obstacles to the delivery of new housing in Ireland*. Over 27% of decisions were held up in judicial review, adding further delay to final decisions and additional cost to an already costly process.

In fact, of the 223 development proposals granted permission under the SHD system, only a third (72 proposals/8,700 units) have commenced and 138 have yet to commence. And although 2021 has seen an increase in commencements, these are mainly from the lockdown backlog and this will most likely taper off in 2022, owing to the reduction in SHD planning permissions granted in the first 3 Quarters of 2021 (a 29% reduction in apartments and 73% reduction in multi-housing unit developments).**

The LRD is said to position itself to enable the planning system to become more responsive to the requirements and complexities around housing delivery at a local level and to tease out any issues at an early stage. The focus is on consultation at a local level and adherence to local development plans. In short, it should, in theory, reduce the number of LRD applications being referred for judicial review, which would fundamentally speed up the process and progress of developments.

Ironically, the process of creating the new LRD bill, with its various iterations, objections and speculation has in fact added to the uncertainty around large-scale residential development. The lack of clarity has made it difficult for developers and investors to calculate the viability of schemes and increased the risk of investment. It has, in some cases, led to developments being put on hold until certainty is provided.

These are delays which the Government can ill afford, with housing targets set at 33,000 new homes per year. We may well see a backlog of applications, now that the bill has been passed, adding further pressure to under-resourced local authorities and an already overstretched planning system.

But will the LRD bill lead to a more efficient process and the faster delivery of housing? Its success is very much dependent on the resourcing of local planning authorities. If not properly managed, this could potentially lead to an increase in applications being refused.

One wonders whether a fast-track system has a place in the planning process, or should it have been scrapped altogether? After all, the SHD arrangements were never intended to be a permanent development consent process.

Although delays and issues around planning in Ireland are much talked about, there are changes underway, with a major overhaul of the planning system, designed to make it more efficient and to speed up the end-to-end process. The digitisation of planning applications is expected to be rolled out on a county-by-county basis from early this year and in place by the end of 2022. An Bord Pleanála have also announced they intend to secure additional resources and increase staff numbers and the same has been promised for local authorities, with an emphasis on increasing the numbers of planning specialists. Unless these changes happen, the LRD process may very well suffer the same fate as the SHD.

The argument for replacing SHD with LRD is not entirely convincing, however the priority now has to be speed and clarity in the planning process and better resourcing at a local level, if the annual housing targets are to be reached.

Dates to Note and Transitional Arrangements from SHD to LRD

The LRD bill came into law on the 17th December 2021.

Proposed SHD developments which have already been the subject of an SHD opinion from the Board on the commencement of the Act will have 16 weeks to submit an SHD application from the date of commencement of the Act.

Proposed SHD developments in respect of which an SHD opinion is awaited from the Board on the commencement of the Act will have 16 weeks to submit an SHD application from the date of receipt of the opinion.

Development proposals which have not commenced the SHD process on the date of the commencement of the Act – 17 December – will be required to go through the new LRD process.

 * PII Housing Completion survey (Nov 2021)

** CSO Planning Permissions


(This Blog article was updated on the 11th January 2022 to reflect the enactment of the LRD bill into law on the 17th December 2021.)

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Cogent Join the Retrofitting Debate on RTE Radio1

Cogent Associates’ Anthony McCarthy joined the retrofitting discussion on RTÉ Radio 1 this morning, discussing the challenges facing the industry in retrofitting Ireland’s housing stock and reaching the 2030 target of retrofitting 500,000 homes.

Listen back RTE Radio 1, 2nd November 2021 – Retrofitting

For more on retrofitting, read our Retrofitting blog, the first in our Housing for All Blog Series, where we dig deeper into the Housing for All plan; looking at different areas of it, identifying some challenges and proffering some solutions.

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Blog Series: Retrofitting – it’s about Incentives

Over the course of the coming weeks, we will be delving deeper into the Housing for All plan, exploring how this well intended strategy to solve a nationwide housing crisis will be delivered – or if it will be deliverable at all.

Fundamentally, we admire the plan’s ambition. We believe the timing is right and are keen to see how it will evolve to overcome the many challenges it faces. We also believe that patience will be required as progress will be slow – so much so that it may fall, at best, up to 5,000 houses short of the average annual target for the first few years, as the legislation and incentives are put in place and the industry mobilises.

Given the impacts of Covid-19, the skills shortages and materials sourcing challenges alone, it is a remarkable achievement that the industry is on target to deliver c. 22,000 completions in 2021 (according to the BPFI), noting this is 10% higher than the previous year. Based on this evidence, it’s not hard to see that ground will be made-up over successive years of the plan, especially if it is managed correctly, with period reviews to evaluate progress and address any issues that are hindering progress.

The retrofitting programme, which is an important link in the chain, is a perfect example of the challenges that lie between the strategy and its execution. It’s a fine statement of intent: 300,000 houses by 2030, but as a means to providing residential homes, quickly, retrofitting appears to provide the quickest win, as these properties are in towns and villages across the country, where services and infrastructure (i.e. utilities, amenities and transport) are already in place.

It is also a very sustainable way to provide housing – as we are repurposing rather than building from scratch, so significantly less whole life embodied carbon is emitted. What’s more, retrofitting supports the objectives of the 15 Minute City and the Government’s Town’s First initiative, where places of work, education and social needs are all local to place of residence. An aspiration that has recently become even easier to achieve with the post-Covid hybrid working model, seeing more people working from home.

Based on the figures committed to in the plan and support from the EU recovery fund, the financial resources may, for once, not be the biggest issue in executing the retrofitting plan but, instead, putting in place the administrative systems and incentives required to deliver what tend to be more complex projects.

The reality is that many of these buildings are old and quite often protected structures, which were never designed with modern Building Regulations, fire and disability access requirements in mind, so need to be brought into the 21st century. However, due to their nature, the actual scope of the project will only be fully known when the opening up works begin.

Health and safety issues arise, as most properties are adjacent to occupied properties and although services may be running to these properties, those services will need to be inspected and in some instances replaced to comply with current regulations. Not to mention the potential planning issues that may arise. The government has suggested that change of use retrofit projects may be exempt from planning, but we can’t foresee this being extended to protected structures.

For the retrofitting plan to work, what we really need is easy access to guidance, resources and the funding.

Significant incentives will be required to encourage individuals to view retrofitting as an attractive and viable proposition and the 35% grants that SEAI are offering are not incentive enough to renovate properties, requiring significant levels of upgrading. It may be time to consider a whole different approach that sees the prospective owner as the solution to bringing our dilapidated, vacant properties back to modern, energy efficient housing stock, much like Italy’s incentive scheme.

Begun in Sicily in May 2020, as part of Italy’s economic recovery programme, Italy’s ‘One Euro House’ scheme saw derelict houses offered for €1. With reasonable conditions such as a nominal deposit and a requirement to commence work quickly once the building permit has been issued, it would appear that this scheme has proved to be very popular.

Similarly, the Italian ‘Super Ecobonus’ scheme effectively pays homeowners to make their home more energy efficient by funding 110% of the renovation costs through fiscal credits. By the end of March 2021, over 10,000 constructions worth €1 billion were in progress or successfully completed thanks to the new schemes. Residential building renovations are now up by over 500% since the Super Ecobonus was introduced, with the scheme hailed as a welcome boost to economic activity by the Italian building sector.

On the face of it, 110% may appear overly generous, but if a similar plan was coupled with the reintroduction of local authority commercial charges for vacant properties and the introduction of the Vacant Property Tax, it may be enough to unlock those vacant town centre properties, that would be more cost effective than building from scratch.

The fact is that upgrading the country’s housing stock is an extremely efficient and sustainable way of helping to meet our housing targets, but the bottom line is, the success of it is down to incentivising people to do it.

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Our ‘Housing for All’ Series

The significance – and scale – of the Housing for All plan for our industry, indeed for the nation, is such that weeks on, it is still being digested and will most likely be chewed over for many weeks and months to come.

Fundamentally, the immediate critique must have been palatable for Minister for Housing, Local Government and Heritage Darragh O’Brien and his officials.

From a Cogent perspective, having had time to consume and break it down in more detail, we like the ambition and intent. We believe in its potential.

However, consistency and commitment are going to be key as this plan is going to be a slow-cook for sure, and not without its hiccups.

Too many cooks may, indeed, spoil the broth but in this instance one of the big challenges is keeping all those with a hand in this pie onboard, working together.

There’s an ‘all in’ approach almost required here; we’re that starved of housing that we need to, in so far as is possible, bring everyone together on this one – ‘all-of-government’ (if that’s at all possible), local government, private sector, etc.

The plan certainly does not need political opportunism getting in the way.  That’s not to suggest that all is perfect, that we like everything on the menu. Far from it.

As the weeks and months go by, elements will be picked apart. Only last week, for example, we heard serious concern from the third-level sector that the extension of borrowing facilities, as provided for in the plan, will do little for them if rental yields won’t cover their borrowings, not least with materials costs escalating as they are.

There are other examples where Housing for All is not quite there, but, by and large, it is a fair start but with a tough course to follow. It may, indeed, get worse before it gets better. But it will be about buying-in and staying the course because if we don’t, we’ll be no better off.

In summary at this juncture, this is just the beginning and not even the beginning of the end. We believe it’s the right course. So, let’s summon the resolve and get on with it!

Over the coming weeks, we will be digging deeper into the ‘Housing for All’ plan; looking at different areas of it, identifying some challenges and proffering some solutions, starting next week with a look at ‘retrofitting’. If interested, make sure to follow us for more updates.