NIRSA calls for inquiry into planning during boom

In a working paper published today entitled ‘A Haunted Landscape: Housing and Ghost Estates in Post-Celtic Tiger Ireland’, the National Institute for Regional Spatial Analysis (NIRSA) said little attention to date has been given to the role played by the planning system in creating the property bubble.

Alaissez-faire approach to planning

The report says thatduring the Celtic Tiger period “a laissez-faire approach to planning predominated at all levels of governance that was insufficiently evidence-informed with respect to long-term demographic demand, market conditions and issues of sustainability, and which marginalised and ignored more cautious voices”.

“Both the fiscal and planning levers of development were overly pro-growth. As a result, not only was there an unsustainable growth in property prices, but this was accompanied by a property building frenzy that led to a significant oversupply of housing (as well as offices,retail units and hotels) in almost all parts of the country.

“The level of over-development that has occurred will take years to correct and seriously hamper the recovery of the housing market and the operation of NAMA,” the NIRSA report added.

The NIRSA report says that the Government has two main levers to regulate property development - fiscal policy through regulating access to incentives and determining tax rates, and the planning system through the zoning of land and the granting of planning permission.

“Explanations of the Irish property bubble have focused almost exclusively on the former, and the role of the banks, tax incentive schemes, and the failures of financial regulators. To date, the role of the planning system in creating the property bubble has been little considered,” the report says.

“The banks could have lent all the money they desired, but if zonings and planning permissions were not forthcoming then development could not have occurred in the way that it did.”

Review would not be a ‘witch hunt’

The NIRSA report goes on to say that an independent review of the operation of the planning system during the Celtic Tiger years should now take place to fully consider the role of planning in the creation of the property bubble.

It suggests that the review should be similar to the recent ones delivered by the international economists Max Watson and Klaus Regling and the governor of the Central Bank on the Irish banking crisis.

“The review would examine planning policy formation and application, and the organisation, operation and regulation of planning within and across different agencies and at all scales in Ireland. It would investigate all aspects of the planning system and its operation, including charges of localism, cronyism and clientelism where appropriate,” the NIRSA suggests.

It said the review should not take the form of “a witch hunt or a blame game”, but rather constitute “a systemic review of how the planning system failed to counter and control the excesses of the boom and provide a more stable and sustainable pattern of development”.

Read the NIRSA working paper ‘A Haunted Landscape: Housing and Ghost Estates in Post-Celtic Tiger Ireland’ [opens as a PDF]