Government Proposed Changes to Design Standards

The Government has this week introduced proposed changes to design standards for apartments.

This is intended to provide a solution or at least part of a solution to allow apartments to become viable again. This is a critical consideration considering that there are reportedly over 50,000 apartments in Dublin alone with planning permission that have not progressed due to viability. Effectively the apartment development space over the past few years has been led primarily by CALF and similar funding structures basing them effectively in a cost plus. The reality is the cost of developing apartments is way beyond the means of couples and families hoping to start out their lives with their own homes.

What has surprised me is the backlash that has been received. There seems to be a mindset that Communal, Community and Cultural facilities are the responsibility of developers but what doesn’t seem to be realised is that such costs are ultimately passed on to the first time buyers and perspective home owners. Quite simply a pencil manufacturer will not manufacture pencils below the cost of production. Developers will not naturally construct units, and associated facilities, below the cost of production. Anyone can see the declining number of apartments being built, and particularly the non-existent apartment developments for private sale as clear evidence that first time buyers and perspective home owners cannot afford the cost of producing an apartment.

We are generally now seeing apartment schemes with mixes of 1 bed and 2 bed units are now surpassing the 600K mark for basic viability. Within this there can be up to 150K costs for the perspective home buyer in Utility fees, council levies and direct taxes (including vat) going to the state and utility providers, including the associated finance and other costs associated with these taxes and utility aspects. After this we are into standards and direct costs. Quite simply we can have the best standards in the world which no one can afford, or standards that are within the means of peoples affordability.

I feel any efforts to bring cost of apartment development to within the means of persons should be welcomed. I wound wonder how many of the detractors are themselves struggling to get on the property ladder and paying rents that are beyond their means.

Some musings on the specific changes that have been introduced.

Communal, Community and Cultural Facilities: I have long wondered why the first time buyer or potential home purchaser on new apartments should be levied and burdened with the cost of providing such extensive open spaces, playgrounds, communal facilities and creche services. I would feel such services should be a matter for the state and for private actors. Pushing such costs on to would be purchasers or first-time buyers through such design standards is in my view effectively a form of taxation. I was only in the past week been in Tbilisi and Baku and seen the efforts made by the relevant municipalities to provide public spaces and community amenities, without forcing the cost of same on to potential 1st time buyers.
Dual Aspect and Stair/Lift Core Provision: I have long criticised the lack of interaction between the provisions of the Building Regulations and the Planning Design Guidance provisions. However, given the recent 2024 TGD Part B provisions, and particularly the provisions for sprinklered flats, allowing for open plan arrangements and more important, up to 15m travel distance in one direction, I would expect significant reductions in build costs can be achieved in careful design.
Apartment Sizes: In traditional lobby arrangement apartment layouts, coupled with the requirement for proportions of apartments to be greater than minimum sized resulted in apartments that often came in significantly over the minimum sizes, securing their faith as non-viable. Utilising sprinkler design provisions as provided in the 2024 TGD Part B, removing the dark entrance lobby, and the changes to the proportion of apartments that need to be over the minimum areas, I would expect significant reduction in areas overall in schemes may be achievable with careful design. Furthermore, having such open plan arrangements as provided for in TGD Part B 2024,may result in a better-quality, brighter and a much improved living space in spite of any size reductions or other changes.

In terms of cost savings, I have yet to do a detailed analysis in a sample project. However there has been several figures provided in various sources. The minister himself is reportedly estimating €50,000 to €100,000. I have seen reports in the paper that Mitchell McDermott have put the figure at between €22,000 and €30,000 based on newspaper reports based on a high level review. There was an opinion piece in a newspaper this weekend that mentioned a figure of just over €3,490 for a studio and suggested savings would be wiped off on redesign. I would intend to do more work on this over the coming weeks but initial very high level estimates by me put the savings for the potential purchaser/1st time buyer between the upper end of Mitchell McDermott and the lower end of the Ministers Assessment (allowing finance costs, vat and other costs assessed as a % of either build or sales costs). This is a considerable move in my view in the right direction, and should it be coupled with consideration in terms of the utility/vat/levies may provide a situation that apartments could be developed and sold in the 300K – 400K category bringing them within the reach of potential purchasers.

I am therefore of the view that this is a very important step towards creating a potential market in the future whereby would be purchasers could dream of owning a new apartment and developers could dream of having purchasers of their scheme and options outside of state sponsored schemes paying above market prices. I do however need to wonder how informed the detractors are from the true finances are involved in residential apartment development and sales and understanding of the plight of would be purchasers desperately needing a home. If I had one criticism it would be as to why schemes currently underway cannot benefit from proposed Amendments to the Planning and Development Amendment Bill, that may enable immediate increased units delivery at a time that is needed, as opposed to schemes that have yet to be commenced as indicated by the government.

Donal Fitzgerald