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A hard lesson from the reality zone

DIGGING holes and filling them in again has long served as an image for pointless and valueless labour. During the boom, Irish local authorities added several refinements: not just digging but building, adding value and then destroying it.

Now we hear calls for the ultimate example of futility, the demolition of "ghost estates". No decisions on that have been made yet, but 12 out of 34 councils have already dezoned large tracts of land zoned for development in the boom years.

At the height of the construction and property mania, about 44,000 hectares were zoned for housing. That meant enough to build more than one million dwellings. And this in a country with a population of four-and-a-half million. The figure was more than 32,000 hectares higher than the country needed.

How it came about is all too well known. Councillors rushed to rezone land, often in places unsuitable for housing, far from sources of employment or from public transport. 'Ghost estates' mushroomed on floodplains and remote hillsides.

But a large part of the 'land banks' was left untouched by the spade or the digger. Developers often simply sat on their purchases, confident that prices would rise. Some 'flipped' property from one to another. These transactions were facilitated by the banks.

But when the crash came, the banks crashed as well. So did the potential value of the land.

In 2007, an acre of residential land outside the main cities cost €750,000. Now it is worth no more than agricultural land, which can cost as little as €6,000 an acre.

What to do? Nothing for it but to reverse the earlier decision to supply supposedly "desperately needed" land for housing. The days of beginning the beguine were over. This time the councils had, as it were, to rezone the rezone.

Sadly, however, the end of the dance comes at a price. In a country whose rulers, of all parties, incessantly impede the operations of the markets, the burden will not fall on the councillors who made foolish decisions, or the developers who built up land banks, or the banks who lent them money. It will fall on the taxpayers.

But we should not simply chalk it up along with all the other billions we have to pay for others' folly. We should remember the names of the councillors who made the decisions -- as often in councils controlled by Fine Gael as by Fianna Fail. Some will be standing again in the next local elections.

When they come to our doorsteps, we can ask them to account for themselves.

Irish Independent