Thursday 19 September 2019

Paul Melia: Empty estates already coming back to haunt us

Paul Melia

Paul Melia

RECESSION, what recession? Ireland's construction boom continues apace with gung ho developers convinced they will turn a profit churning out more new houses.

Construction work has started on 11,000 new homes in the last 15 months, just as the full extent of the horrendous nightmare that is Ireland's property market is emerging.

That planners across the country continued to grant permission for houses and apartments at a time when the State is sitting on 300,000 empty units is beyond belief.

These trained 'professionals' -- accused yesterday of overseeing the "catastrophic failure" of the planning system -- seem to believe that more houses are needed at a time when property prices have plummeted and banks aren't lending to house-buyers.

Four reports put the number of empty units at more than 300,000. A separate study is underway at the Department of the Environment, which it hopes will give a definitive figure.

But one thing is for sure, there are far too many houses out there. What to do with them is the bigger question -- demolish them? Complete them in the hope the banks start lending again? Turn them into social housing?

The only certainty is that you and me -- citizen taxpayer -- will pay the bill.

A year ago today, the Government published the heads of bill establishing the State bad-bank NAMA, to take over property loans, both performing and non-performing.

It is also highly likely to take control of tens of thousands of the unsold housing units that litter the countryside today.

Experts say that the property market in the main urban centres -- Dublin, Galway, Cork, Limerick and Waterford -- will recover quicker, but it is in the rural areas that the real problems will emerge as its inhabitants leave in search of work and the house-buying market shudders to a halt.

The last thing the country needs is another 11,000 homes coming down the line, irregardless of whether they're one-off homes or estates of houses and apartments.

The NUI Maynooth report spells out what could have happened to avoid this: "The banks could have lent all they wanted, but if zoning and planning permission was not granted, property construction could not have gone ahead."

How we laughed at John Gormley and his Green Party chums for being party-poopers with their warnings about overzoning and overdevelopment. How right they were.

Developers are just business people. They take risks and for much of the last decade those risks paid off, helped by a planning system that didn't join up the dots and a banking system flush with cheap money to lend.

NAMA will take 1,800 developers under its wing, but there are hundreds more who did well out of the boom and who aren't sitting on multi-billion non-performing loans.

They quietly churned out and sold 30, 40, 50 homes a year making them very wealthy indeed.

It is these people who are still building. They're not going into NAMA. For them, nothing has changed. The right house, in the right location, will always sell. They are willing to make the punt based on years of experience built up before and during the Celtic Tiger boom.

Many of them will seek planning permission this year for other developments, knowing that the property market will eventually recover and that it is better to have permission now than to look for it under a more rigorous planning system coming down the line.

The Construction Industry Federation, which represents builders, will never say there are enough houses.

Earlier this year the Irish Independent revealed there was enough land zoned to build 1.1 million houses. This was facilitated by county and city councillors, hell-bent on protecting their patch and showing cash-rich developers their county was open for business.

But councillors don't grant planning permission for those lands. The decision rests with each of Ireland's 34 city and county managers. They can refuse for a variety of reasons including a lack of essential infrastructure such as sewerage systems or roads -- but tens of thousands of applications still got through.

One reason, without a doubt, was the financial windfall that arose from granting permission in the form of development levies.

Between 2004 and 2008 some €2.4bn was paid by developers to local authorities to fund essential services.

In 2008, when the property market was in freefall, €370m was handed over. Roscommon got €7m. Cavan €4.5m. Almost €3m went to Sligo, and €1.7m to Monaghan.

There was every type of guidance document available to planners to help them make the right decisions. The National Spatial Strategy (NSS) planned the development of the country. Regional Planning Guidelines set out how areas should be developed, how many houses and shops were needed to meet projected population growth.

County Development Plans did the same thing but on a county by county level.

But the actions of central Government didn't help. It ripped up the NSS when it decided to decentralise the civil service to ministers' constituencies. When that happened, all bets were off.

Things are changing. Next year, county managers will be allowed to refuse planning permission if there are too many units already built to meet demand. If they aren't taking the right decisions, the Environment Minister can step in.

The focus to date has been on the role councillors played in making land 'suitable' for housing. The blame for deciding houses should be built rests firmly with the managers.

They granted 52,000 planning permissions in 2008. These will have to be built out within five years, or the permission expires. Which means there are more units coming down the track.

Irish Independent

Today's news headlines, directly to your inbox every morning.

Don't Miss