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15 December 2021

Large-scale residential – addressing the shortcomings of the SHD process

With an overhaul of the controversial fast-track planning process with regards to large-scale residential development underway, this article explores some of the fundamental shortcomings associated with the SHD process, as well as providing an overview of the proposed LSRD process as it currently stands. Associate - Cost Management, Barry Cusack explores this topic in the below article.

The Strategic Housing Development (SHD) process was enacted in December 2016 and came into effect in July 2017, with the aim of speeding up the planning application process and accelerating the delivery of larger housing and student accommodation proposals. Since its inception, the legislation has been marred by controversy because it bypasses local authorities by allowing direct applications to An Bord Pleanála for large housing schemes, and many SHD processes have been faced with judicial reviews as a consequence. This in turn has led to marked decline in planning permissions this year in spite of pent-up demand in the market, the pandemic, along with the uncertainty and cost associated with the SHD process, are having a bearing. 

The scheme is set to close to new applications as of February 2022, with plans to replace it with the General Scheme of the Planning and Development (Amendment) (LSRD) Bill 2021, whereby an initial pre-application would be submitted to the relevant local authority followed by a ‘Final Pre-Application Consultation Meeting’ with the relevant local authority under new Section 247A for its opinion.

In this article, we look at some of the fundamental shortcomings associated with the SHD process, as well as providing an overview of the proposed LSRD process as it currently stands. 

A doubling of judicial reviews

Judicial review proceedings may be taken to challenge decisions taken by public bodies and courts below the High Court, where the applicant has identified a perceived error in the decision-making process of the body in question as a result of an error of law or fact or following unfair procedure. With regards to decisions made by An Bord Pleanála, a time limit of eight weeks from the date of the decision applies. It is important to note that the Court is acting in a review capacity, so should it determine that the decision was flawed, it may nullify the decision and refer the matter back to the Board for reconsideration in line with the findings of the review. 

The volume of An Bord Pleanála decisions challenged via judicial review over the last three years has more than doubled, with the majority of those applications being from third parties as opposed to the developer side. The SHD process has led to a spike in the volume of judicial reviews, with the Board’s legal costs growing by 38.5% in 2020. According to FP Logue’s SHD Tracker, of the 49 SHD projects granted permission this year to date, 47% of those (23) have stalled because of judicial reviews. Ultimately, it should be noted that judicial reviews can have a significant impact on a project, in so far as increasing costs for developers, lengthening the schedule, leading to higher design team fees etc. This is against a backdrop in which Ireland continues to face an acute housing shortage and cannot afford for a protracted and convoluted process when it comes to large-scale residential development. 

The introduction of the LSRD Bill

The proposed LSRD Bill will supersede the SHD process from February 2022, although the definition remains largely the same. In re-introducing the local authorities into the equation for fast-track applications, it is endeavoring to address one of the fundamental shortcomings of the SHD process, with a ‘two-step’ consenting process ending the judicial review being the only route to appeal. 

Furthermore, mandatory timelines are being introduced in an effort to make for a more efficient process for large-scale residential development. An eight-week period will apply to allow for a pre-application consultation between developers and local authorities, in advance of the submittal of the formal application. There is then a five-week period for observations, and eight weeks overall for a decision to be made by the local authority. However, should further information be required, this can be extended to six months. Subsequent appeals to An Bord Pleanála must be decided upon within a 16-week mandatory timeframe, meaning that the maximum possible duration of the process should be 32 weeks. 

The LSRD definition is largely unchanged from that of SHD – developments of more than 100 housing units, or student accommodation developments comprising more than 200 bed spaces, or a combination of same. However, the 15% limit on commercial space in place under the SHD regulations will now be 30%. 

An assessment of judicial reviews

It is evident that the current system with regards to judicial reviews requires revision and reform, and under the government’s ‘Housing for All’ plan, which was published last month, this is due to take place. Its aim is “primarily to ensure that appellants access the administrative system fully in advance of court processes, and that matters of substance are referred” to the courts.

A special division of the High Court is set to be established next year, which will focus on planning and environmental issues. Furthermore, a review of the planning process will be completed by the Attorney General by December 2022. 

In summary

The shortcomings of the SHD process have undoubtedly led to distinct inefficiencies within the planning system. This in turn has lead ‘fast-track’ applications to often be particularly convoluted and protracted, as noted above, as well as contentious. It is hoped that introduction of the LSRD Bill will mitigate these flaws, in conjunction with the review of the planning process and the judicial review process. 

Ultimately, it remains to be seen as to what the full range of specific reform measures will be. It is evident that Ireland requires a much greater volume of housing completions each year to meet demand, and must have an effective and efficient system in place to facilitate development in order to achieve this.