Friday 28 November 2014

David McWilliams: Bad planning costs us a lot -- just look at NAMA

Published 18/04/2012 | 05:00

This weekend, friends from Uruguay visited. For Guillermo O'Neill and his wife Alessandra Lawlor, the trip was a sort of homecoming. They are part of the great Irish Tribe down in Latin America. Their great grandparents left here -- from Navan -- at the turn of the 20th Century and they have kept their Irish links.



In Guillermo's case, going to the Irish Christian Brothers School, Stella Maris College in Montevideo, immeasurably strengthened these links. The school was set up by Irish brothers in the 1950s and is famous for being the Alma Mater of the Uruguayan rugby players who survived 72 days in the Andes after a horrific air crash. The story was documented in the movie 'Alive'.

They arrived in Dublin having travelled around the country. Of all the places they visited, Donegal blew them away. Despite living in a country with a significant Atlantic coastline, they couldn't get over the beauty of the Atlantic and the countryside in Donegal. For these two, Irish-Uruguayans, Donegal was a magical place.

The way to destroy this magical place is to ruin it with bad planning. Given what I heard from these enthusiastic tourists and my own experience up there two months ago on the Inishowen Peninsula, it pained me to read the latest An Taisce report on planning in Ireland.

An Taisce has done us some service. It has ranked the abuses in the Irish planning system over the last 10 years. It is a league of gombeenism and environmental vandalism.

Shamefully, Donegal Country Council comes out worst on this league table of environmental opportunism and shortsightedness.

Not far behind come Kerry and Galway -- encapsulating Connemara. These county councils jumped out of the page at me, not because they were amongst the worst offenders, but because on most objective indicators they are probably Ireland's most beautiful counties.

An Taisce judged each of our county councils on the following eight specific criteria:

• Overzoning: amount of zoned land as a percentage of population in 2011.

• Decisions reversed by An Bord Pleanala 2005-2010.

• Decisions confirmed by An Bord Pleanala 2005-2010.

• Percentage of vacant housing stock in 2011.

• Change in vacant housing stock 2006-2011.

• Water quality: urban areas with secondary treatment failing to meet EPA Standards 2011.

• Percentage of one-off houses permitted as a percentage of all residential planning permissions 2001-2011.

• Legal proceedings commenced following non-compliance with enforcement notice 2005-2010.

According to the report: "Donegal had approximately 2,250 hectares of residential zoned land in 2010, sufficient for an additional population of 180,000 people. Despite this, approximately 50pc of all residential planning permissions in Donegal over the past decade were granted on unzoned land. These trends are symptomatic of a wider systems failure in which counties Donegal, Roscommon, Leitrim and Kerry perform worst."

It's not surprising after such a decade that these counties also have the highest number of vacant houses, some but not all of which are dilapidating in front of our eyes in ghost estates. These counties are also experiencing some of the highest levels of population decline and the highest levels of unemployment.

What are we going to do about it?

Will anyone lose their jobs? Will the buck stop with anyone? Or will we put it down to the usual, a shrug of the shoulders and a sigh: "Well that's the way it goes."

Will the same old system continue for a new generation of opportunists?

If so, then what is the point?

People pay, the environment pays and the country pays. But because it is hard to measure the cost to society of environmental degradation, this type of vandalism is sometimes seen as being without a cost.

For example, if you are a cowboy builder and build your estate on a floodplain because you have managed to avoid planning regulations and the plain doesn't flood this year, then what's the cost?

The cost is only apparent when it does flood but then, who picks up the cost? The State does and then the insurance companies. Subsequently, taxes and insurance premiums increase for everyone. However, because it can't be traced specifically back to you, the general public pays for this planning.

According to the report, the Irish Insurance Federation put the cost of the major flood events in recent years at more than €370m -- a cost which is passed on to all homeowners through higher insurance premiums. Many other buildings are now uninsurable and so they will simply fall into disrepair and have to be knocked down over time.

But let's think about the real dynamite under the Irish banking system that is the high explosive called "development land". Development land was not only the high explosive that was detonated by the collapse of the market, but while things were going up, it was also the elixir for greedy bankers and dodgy developers.

And what's the upshot for you? Well it is NAMA.

A few years ago, before the crash, this column argued that the real value of development land was the "price that a farmer would give you to put cows on it". Now this is coming to pass.

Approximately 40pc of the €75bn property portfolio transferred to NAMA is 'development land'. Much of what was hastily rezoned to 'development' is in truth pasture and tillage land for farming. In the years ahead it will be officially reclassed to agriculture. Therefore, the value of NAMA's development land portfolio will plummet from a paper figure of €30bn to a single-digit figure at most. This will crystallize tens of billions in losses for us, the taxpayers. This direct NAMA loss does not take account of the additional billions to be written down on non-NAMA development loans, which remain with financial institutions and haven't made their way into NAMA.

Over lunch, my Uruguayan friends cited the litany of bad decisions foisted on the average citizen down there, but few were as outrageous as the great Irish planning fiasco.

This will cost you personally thousands of euros. Your children will pay for it too, well after you are six feet under.

Now how does that make you feel?

www.davidmcwilliams.ie



Irish Independent

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