HOUSING REMAINS ONE of the issues that Irish people care about most and it is sure to dominate many of the debates in the build-up to the general election on 29 November.
In recent weeks, government ministers have been talking up their efforts when it comes to increasing the supply of housing.
Chief among them has been Housing Minister Darragh O’Brien, who has said the number of new homes under construction has increased dramatically in the last year – but is that true?
O’Brien has said that construction began on almost 60,000 new homes in the 12 months up to September this year.
“Over the last year alone, work has begun on nearly 60,000 new homes,” the minister said in a video posted on social media on 31 October.
He said this was due to “a series of key government initiatives”, including a waiver on levies paid to local authorities as well as an Uisce Éireann and water charge rebate scheme.
He said these measures are playing “a major role in accelerating our progress”.
Minister O’Brien’s claim about construction beginning on new homes relies on the number of commencement notices filed with building authorities, which do not necessarily reflect the number of sites where construction has physically begun.
Housing experts have pointed to a number of weaknesses in using commencement notices as an indicator of construction activity.
Furthermore, a waiver on registration fees led to huge surges in the number of notices filed before the exemption expired, which critics say has artificially inflated the figure.
O’Brien’s claim refers to commencement notices filed with local authorities, which do not necessarily indicate that construction has actually begun.
A commencement notice is a notification to a building control authority that a person intends to carry out construction work on a site that has been granted planning permission. Notices are required for new builds or material changes of use to a building.
It is an offence to begin construction without having a commencement notice validated by a building control authority.
The Department of Housing has acknowledged the influence of the levy waiver on commencement figures, which it has touted as a success.
“There is no doubt the extraordinary volume of new home starts we saw in April was attributable to the expected ending of the measures at the end of that month,” a spokesperson for the Department told The Journal.
“It must be noted that to qualify for the development levy waiver, developments must be completed before end-December 2026,” the Department said.
Normally, there is no deadline for completion.
The Government has also acknowledged that the increases can be partly attributed to the Uisce Éireann water and waste water connection charge rebate, which was introduced in April 2023 for developments that broke ground before 30 September this year.
Commencement notices have to be delivered to local authorities 14 days before construction begins on a new housing project. The project is then supposed to break ground no later than 28 days after the notice is filed.
There were 57,995 commencement notices filed in the 12 months in question, according to the Department of Housing, which accounts for O’Brien’s “nearly 60,000” claim.
However, filing a notice saying that you intend to build a housing development or apartment block does not mean ground has been broken on a building site.
The notice is a statement of intent to begin building, not a notification that construction has already begun.
It also does not mean, despite it being a legal requirement, that construction will begin before the 28-day deadline. If a developer misses the deadline, a new notice must be filed.
They can also be invalidated by a local authority for a number of reasons, including insufficient notice or a lack of planning permission.
Critics, most notably Sinn Féin housing spokesperson Eoin Ó Broin, have also said the number is itself artificially inflated, which they attribute to the Government’s introduction of a waiver on the levy charged when a commencement notice is filed.
The levy waiver exempted developers from paying development contributions normally required under Section 48 of the Planning and Development Act 2000.
The aim of the waiver, which was introduced in April 2023, was to incentivise developers to begin construction of homes at a greater pace.
The expiration of the levy waiver, which was originally scheduled for the end of April 2024, led developers to rush to file paperwork and avail of the fee exemption. The deadline was then extended to the end of September.
We know this because both months saw huge surges in commencement notice filings.
There were 18,182 filed in April and 11,385 in September, according to Department of Housing figures, numbers that dwarf the other months of this year.
For example, in March the number of notices filed was 4,900, which was already a high number compared to other months, and in May it was 1,983.
The September figure was more than four times higher than that of the same month last year.
A Busniess Post report in July of this year quoted a confidential memo from the Department of Finance’s chief economist to the housing minister.
In that memo, John McCarthy expressed doubt that the construction industry would be able to start work on the 18,182 sites registered in April within the required 28 days.
“Although we understand that there is some oversight on whether works on a site have actually commenced following the issue of a commencement notice, the ability of the industry to begin construction on sites with the capacity to deliver 18,000 units in one month is doubtful,” officials warned.
The Journal asked housing experts for their assessments of O’Brien’s claim.
“In my view the minister’s claim is not at all credible, and counting commencement notices is not a reliable metric for counting actual construction activity, particularly when developers and builders have been financially incentivised to lodge them,” said Orla Hegarty, an architect and lecturer at the UCD School of Architecture, Planning and Environmental Policy.
John McCartney, director and head of research at BNP Paribas Real Estate, said that “commencement notices have traditionally been a good leading indicator of future residential completions and they are considered an important and legitimate indicator for monitoring current and future construction activity”.
But he also said there are some issues with using those figures as a metric for gauging construction activity, as did Hegarty.
“Firstly, the local authority may not check if work starts,” Hegarty said, which she added can be attributed to a lack of resources, or because they are simply not obligated to do so.
“Secondly, building work could be just digging a trench or minor works just to validate the notice,” Hegarty said, or as McCartney put it: “what actually constitutes work beginning?”
“This is compounded by builders, developers and local authorities all taking different approaches to how they lodge notices,” she explained.
Developers in some cases might file a notice that covers phase one of a project, or an entire development comprising hundreds of houses or apartments “that could take years or never be started”, Hegarty said.
The €30 cost of filing a notice (originally £25) has not been increased since it was introduced in 1990, “leaving building control departments under-resourced to inspect building standards,” Hegarty said.
Update: The original version of this article stated that the levy waiver exempted developers from paying the €30 per unit fee usually charged when filing a notice. The article was updated on 11 November to clarify that the waiver refers to development contributions.
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