Section 47, the Dinosaur Teddy Bear and the effects on PRS

I was sitting at home recently at the worktop when my 4 year old marched in holding my 6 year olds favourite Dinosaur Teddy bear, and threw it In the bin. “What are you doing” I asked. “I don’t have any dino teddy” she answered. I asked “Are you saying if you’re your sister has something that you don’t, she shouldn’t have it either”. “Yes” was the direct answer. I was stunned but then I considered the honesty, and thought, in many ways is it any different to housing policy during a housing crises.

There are as we know very limited and declining numbers of residential units being built year on year. There are also a number of parties vying for such units. These include first time buyers, right sizers, PRS, local authorities and AHBs. This can leave the impression that parties are “competing”, Based on the various projects that we have been involved in, we have found in many situations the reality is that certain schemes will only work for a specific end buyer.

One would feel the focus should be in getting units built one way or another and let the market decide afterwards who gets what. A simple principle of do not be a barrier to building housing. What has happened in previous years however is that Government seems to weigh in where one party or another as an end purchaser has been successful in getting schemes constructed, and as with the teddy bear, felt they shouldn’t have it if other parties cant. It would seem there has been a number of policy decisions over the years based on the dinosaur teddy-bear. A recent article on Limericks Live 95 FM dated 7th May 2025 was titled “Taoiseach agrees housing market in Limerick is unfair to private buyers” (https://www.live95fm.ie/news/live95-news/taoiseach-agrees-housing-market-in-limerick-is-unfair-to-private-buyers/) would indicate such views and approaches remain.

Such commentary is likely in the misguided belief that the specific residential units will be built anyway and that there could be influence on whom the purchasers would be. In reality, many of these schemes are not viable by any other means and they are instead undeveloped when a particular end user is removed from the equation. The results contributing to year on year reduction in numbers of units delivered.

One such measure that was introduced and has become prominent is the Section 47 Agreement. This came about following a few high profile bulk property sales. It would appear that it was felt this was unfair on 1st time buyers and other parties. The view in some ways being that if everyone cant have a teddy bear, no one should. This approach with Section 47 agreements in effect I feel has pitted first time buyers and social homes against renters. It is policy makers as opposed the market deciding who can own a home, irrespective of viability. I feel the true effects of this measure are still to be fully felt and will be in years to come. These are in ultimately planning conditions placed on many developments over the past few years to control who can or cant own it on completion.

A sample wording on these would be

the developer ……… shall enter into an agreement with the planning authority ……….. that restricts all houses permitted, to first occupation by individual purchasers i.e. those not being a corporate entity, and/or by those eligible for the occupation of social and/or affordable housing, including cost rental housing.

The utilisation of section 47 agreements to effectively prevent more rental units coming into the market is a recipe for rising rents for years to come. The daft quarterly report only published this week for Q1 2025, detailing year on year rent increases of up to 20% in places is a stark reminder of the problems facing renters. With planning permissions having a life span of 5 years, section 47 conditions on planning permissions will have an effect on rental property being built for years to come. This can only result in rental prices going up more and more.

Recent discussions are reportedly being held by government and others around rent caps. The Irish Times on line in an article dated Sunday February 9th 2025 quoted the Taoiseach as saying “We have time to see if we can develop an alternative system which protects renters but also enables people to have a clear, stable environment in which to invest,”( https://www.irishtimes.com/politics/2025/02/09/taoiseach-signals-possible-end-to-rent-pressure-zones-by-end-of-year/) . If the concept is that there could be more rental properties constructed which would increase supply and help stabilise rents, then the section 47 agreement could become a very real obstacle, and prevent a particular sector as well as renters from having any dinosaur teddy bear for years to come.

Donal Fitzgerald BE C Eng MIEI FCABE

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