Housing supply in Ireland since 1990: The role of costs and regulation

Abstract

Housing has been central to both global and Irish economic fortunes in the past generation and was a major contributory factor in the Great Recession. Recently, greater attention has been paid around the world to the economics of housing supply, including the costs imposed by regulations relating to land use and building. In Ireland, the last few years have seen a growing shortage of accommodation, particularly in the Greater Dublin area, as population growth is unmet by new additions to the housing stock. This paper examines both costs and regulatory conditions relating to Irish housing supply since 1990. It brings together a range of studies on the cost of building in Ireland currently and relates these to both house prices and household incomes. It then derives a number of summary statistics of regulatory conditions, based on the full dataset of over one million planning permissions across Ireland’s 35 local authorities over the period 1990-2013. These include: the median time-to-planning-decision; the proportion of projects approved; and the median number of conditions imposed. The connection between these and Ireland’s extreme housing market cycle since 1990 is then explored, before the paper concludes by noting avenues for future research.