Construction: Have we learned nothing from the mistakes of the boom?

John McManus’s piece in the Irish Times Business Section on 21st April should be required reading for every Government and Local Authority official. McManus contends that the current Government policy response to the potential new ‘bubble’ in the Dublin property market is shambolic.

What is very worrying is his reference to the former Head of NAMA stating that the type of policy formation that led to the construction and property crash in 2007 is still being followed today. There is no coherent set of data that tells policy makers what is happening in the property and construction markets. Policy is being made on the hoof and with Councils starved of funding and Government understandably focused on job creation inevitably both are vulnerable to those with an interest in property taking off again.

The construction lobby has certainly jumped on the problem of the shortage of housing in Dublin and their message is we need more houses so we need to increase supply and introduce measures that will allow land to be developed and banks to start lending money to develop the land. However experience has thought us that its not as simple as that.

McManus believes that we need external validation and independent evidence before Government makes a decision on the future of construction and planning. However it would appear that they have no way of assessing the construction industry recommendations. The other political issue will be managing developers and in particular those associated with the bust.

That said the Government’s construction strategy is expected to be published in the coming weeks. At all costs it needs to be aware of the devastation caused by the last construction boom. Planning needs to be based upon need and not what will make a quick buck for developers. At a time when local authorities are being starved of funding the temptation to allow developers go ahead is understandable.  More building means more development levies for the local authorities. It also means job creation. However building more houses puts pressure on services none more so than schools. The issue of a lack of school places is a direct consequence of poor planning.






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