Directed research is key to Ireland’s housing recovery phase, says BRIAN HUGHES.

Background
A recent NUI–UCC published research paper confirms a two-speed demography emerging in Ireland, with substantially higher out-migration for rural areas. This mirrors the property market and construction industry, which is seeing renewed activity and evidence of increasing house values in Dublin, and to some extent in the provincial cities, but continues to fall nationally. As employment strengthens, economic ‘green shoots’ are reported by IDA Ireland, with new foreign direct investment (FDI) starts and expansions evident in the other cities. Commercial farming and food production are also on an upward trend. NAMA expects recovery and growth to commence in Dublin, Cork, Galway, Waterford and Limerick in that order. Will this growth spread out from the cities and at what pace?
Against this promising background, the following is a summary of the current and prospective trends for demography, as an influencer in end-use demand, as might be expected to apply to the supply and demand for housing. As an island, Ireland will always experience pronounced oscillations of two-way migration. With just one metropolitan city region, the propensity for out-migration will continue, unless mitigated by the population absorption potential of its provincial cities.
This is fundamental to creating the missing settlement hierarchical ‘tier’ in the 200,000 to 500,000 range in Ireland’s urban hierarchy. Establishing further urban-based advanced producer services-type employment growth in such locations is critical to Ireland’s rate of economic recovery in a rapidly urbanising world that adds another billion in population each 12-14 years.
Census outcome
The 2011 Census confirmed housing vacancy at levels above those of 2006, with the exception of the four administrative counties of Dublin. DKM’s recent research confirms a dynamic of reducing vacancy for the capital, down from the 2011 average of 9% vacancy, to levels where ‘pockets’ of shortages are emerging. Elsewhere, the more rural a county, the higher is the level of vacancy.
The west and north-west have vacancy levels of up to 30% aggravated by the infamous Upper Shannon Area tax break scheme.
The lessons of tax-induced property schemes with little consideration for end-use demand and having no regard to location theory are hard learnt! Considerable unutilised space remains in Irish cities and towns: the so far unpopular ‘Living over the Shop’ idea needs to be re-examined, with further design innovation and environmental street improvements.

Housing types and demand
Vacancy and slow ‘take-up’ in apartments reflect an increasing awareness of their physical and cultural limitations for rearing families with children. This is providing renewed opportunities to encourage family-friendly ‘brownfield’ site development for houses in the inner city and mature suburban locations. Furthermore, apartment-type demand is weaker, handicapped by the continuing fall in the State’s 15-29 age population: in 2006-2011 this fell by 14%, in stark contrast with an 11% increase in the 0-14 and 30- to 85-plus cohorts. Likewise, greater mortgage flexibility will help to free up the progression from apartment to ‘starter’ homes.
Political pressures
The instances of people in negative equity, unemployed, with a variable mortgage, living in a rural small towns or villages – i.e,. locations with limited alternative employment prospects – combined with the inevitable long-distance commutes to (alternative) work, have created the horrific yet commonplace ‘Rochfordbridge Scenario’. This reflects the historic legacy of strong local political development pressures that often overrode spatial planning policy resistance to excessive zoning, in an ABD (anywhere but Dublin) advocacy of the now-to-be-replaced NSS.
Hopefully the workings of the ‘core strategy’ provisions of the 2010 Planning Act and subsequent related legislation, combined with fresh evidence-based research, will have put constraints on such malpractice, despite a continuing residue of local political pressure to ‘develop’.

Planning intervention
Complementing three and four bedroom housing types, experiences in DIT of completed Local Area Plan and Urban Design projects have highlighted the potential for medium to high density double-duplex accommodation, with small private gardens and roof gardens, in innovative design layouts: ones that lend themselves to utilising inner city sites, while locating people closer to potential employment. Such innovative, ‘continental-type’ residential solutions will be key to improving urban densities while reducing the surplus of vacant sites in our cities, especially in locations where commuting to work, school and college can be minimised and where existing services can be utilised to achieve economies of scale.

Current demography
Out to the next census in April 2016, and subject to migration flows, projections show that the State’s population is likely to grow modestly, by about 2% or some 100,000 above the 2011 level, in contrast with a 17.23% growth in 2002-2011. Furthermore, there is emerging evidence at the regional level from the recent CSO Annual Population and Migration Estimates, that population growth outside of the greater Dublin area (GDA) is generally very weak.
With the continuing ‘core’ in annual production of one-off rural housing there will be little demand for estate-type ‘sub-divisions’ outside of the provincial cities and some large towns, particularly in areas where housing surpluses are highest. This suggests a +40% GDA share of State population by the next census.

Awaited projections
The CSO is expected to publish its 2016-2031 regional population projections by the end of November 2013. Looking beyond 2016, it is difficult to be precise as to when the trend in the direction of net migration will again reverse, where the pace of this economic recovery and its sustainability will be crucial. Hence, a range of projections will again be provided by the CSO. At the same time, annual natural growth (births less deaths) should remain above the 40,000 level, which means that a declining State population – last experienced during 1986-1991 – may be a thing of the past.
It is already clear that the new National Spatial Strategy will have to prioritise growth centres but sensibly, needs to have considerably fewer than the 23 individual settlement locations of the 2002-2020 Plan. If presented in advance to Cabinet, robust evidence of the harmfulness of such ‘dilution’ should serve to eliminate the temptation to include further ‘growth centres’.
These centres need to achieve concentrated and rapid expansion. The objective must be to plan for viable, threshold-size ‘Gateways’, in contrast with some of the ill-advised locations of the last NSS. Drogheda combined with Laytown-Bettystown-Mornington and Portlaoise could provide dynamic growth centre alternatives in outer Leinster, while many of the ‘hubs’ should be omitted.

Conclusions
Hubert Fitzpatrick, Director of Housing in the Construction Industry Federation (CIF) recently asked (Irish Times, October 10): ‘Why aren’t we building more houses?’ He listed several simple steps the Government could take to tackle the problem. However, I believe that fundamental issues first need to be addressed. Properly funded research is needed to restore confidence to the housing industry, to its financiers and to the market. We must understand the underlying demographics and locations to be able to demonstrate to lenders and funders, where the houses are needed and when. Edgar Morgenroth’s ESRI research for NAMA should provide some of the answers.
If the industry had and was able to use the benefit of such research in 2006 and earlier, the massive oversupplies of the wrong product in the wrong location might have been avoided. In turn, the confidence from such research should encourage the early supply of new sources of development finance, to combat the threat of housing shortages and to provide the right types of accommodation in locations where profitable development can again occur. Is there a role for the REIT funds here?
Developers should then be able to access funding, confidence-infused by credible and focused research. Despite the pervasive ABD lobby, planners must plan for where development is demonstrably needed so as to prevent the re-emergence of housing price ‘bubbles’ in response to rising residential demand, particularly in Dublin. The days of relying on ‘developer intuition’ are gone, as is the production of unwanted housing estates in unviable and remote locations!

Afterthought
Is it not the case that the Local Property Tax is meant to boost the funding of our local authorities? Why, therefore, is ‘funding difficulty’ being proffered as the reason for their inability to refurbish the 3,000-plus public sector housing units that are lying vacant, despite the 90,000-plus housing waiting list? This could also boost the building industry!

 Brian HughesDr Brian Hughes FSCSI FRICS FeRSA
Brian is completing an MSc in Spatial Planning at DIT. He is a Director of the Bolton Trust in the Docklands Innovation Park, and sits on the CSO’s Expert Group on Population, Migration and Labour Force Projections.