Ghost estate builders got €870m tax breaks
But no cash to finish 'eyesores' as 33,000 houses stand empty
Published 22/10/2010 | 05:00
DEVELOPERS got almost €870m in tax breaks to build thousands of houses that no one wants, the Irish Independent has learned.
And the Government yesterday admitted there was no money to finish off the 2,800 ghost estates in which 33,000 houses and apartments are lying idle.
Local communities will be stuck with these eyesores for years as bulldozing them has also been ruled out.
And planners will not face any sanction for their role in fuelling the property bubble.
The first official audit of the number of unsold and half-built houses and apartments in so-called ghost estates published by the Department of the Environment yesterday showed the full extent of the problem.
The report found:
- There are 2,846 ghost estates containing 33,225 empty units ready for sale.
- Cork has the most unsold homes, 3,427. Limerick City has the least, 119.
- Planning permission was granted for 180,000 units in the estates. Work began on 120,000.
- Of the total, 77,000 are occupied. But another 10,000 are far from finished. Sources said the bill to complete the work could reach €1bn.
- Builders are working on just one in six estates. Thousands of homes are not served by roads, footpaths or public lighting.
Homeowners paying mortgages on properties surrounded by building sites, open sewers and unbuilt roads and footpaths will have to wait until next year until a plan to tackle the problem is unveiled.
The Government is to set up a taskforce including NAMA, the local authorities, the Construction Industry Federation and Health and Safety Authority to see how estates can be completed and who will foot the bill. It will report back in January.
Planning Minister Ciaran Cuffe ruled out demolition, saying this decision would rest with the developers or banks.
"It's not a matter for the department," he said. "We want to see as many of these developments as possible finished out, and that will happen in a large number of cases."
Figures obtained by the Irish Independent show how tax breaks fuelled the bubble that led to the problem.
Between 2004 and 2008, some €869.5m was claimed by developers who built housing in areas identified by the Government as being suitable for massive developments.
In 2008 alone, with the market in freefall, almost €150m was claimed under the urban, town, seaside and rural renewal schemes.
Some developers have been bailed out, as the Government has taken out long-term leases on 2,500 units for social housing purposes.
New laws allow local authorities to acquire unfinished estates, but most won't have the money to complete them.
Housing Minister Michael Finneran admitted bonds and securities lodged by developers would not meet the bill.
Planning Minister Ciaran Cuffe said the Green Party was totally opposed to the blanket tax designations introduced by Fianna Fail.
He said it was "naive" to think tax designations of entire counties ''would raise all boats'.'
The Irish Council for Social Housing said it could take over some of the homes if "outstanding issues" were resolved.
The Labour Party claimed the problem was a legacy of a government that saw housing policy "as a means of delivering bounty to their pals in the construction and investment community" rather than providing homes for people.