Ghost estates

 

GOVERNMENT TAX incentives and bad planning decisions were prime contributors to unsustainable practices that have littered the countryside with half-finished building sites. Many families were forced to move out of over-priced Dublin during the housing boom in order to buy their first homes. They are now stuck in ghost housing estates with little chance of moving. Their complaints and demands for reasonable living conditions have been ignored by both property developers and local authorities.

The results of a Government survey into the problem are due to be published next month. Already, we know that more than 600 estates are affected, where more than half of all the housing units are unoccupied. A pilot study in Co Laois found that one-quarter of developments there posed public health and safety risks, with open manholes, inadequate public lighting and unfinished buildings. Twenty per cent had inadequate water, sewage or road access. The situation is likely to be considerably worse in other counties.

Negative equity is a common feature of homes built in the past five years. Owners, be they young families, speculative landlords or holiday-home investors, have all lost money. In extreme cases, the demolition of half-finished estates may be the only reasonable response. But, in a majority of cases, responsibility for cleaning up the sites and providing basic facilities may eventually fall to the National Asset Management Agency (Nama) or to local authorities. Minister of State for Planning Ciarán Cuffe is said to be preparing guidelines for local authorities concerning their responsibilities for public safety and environment protection. On past experience, however, homeowners should not expect an assertive or generous engagement by officials.

Most developers have no funds to complete these estates and are effectively bankrupt. Questions arise, however, concerning their legal obligations and whether they should be allowed to walk away from the shambles they helped create. In many instances, they ignored planning conditions and failed to lodge the bonds or securities required by law to complete the estates. By the same token, local authorities failed to ensure these monies were lodged before building commenced.

Tough decisions will be required to ensure Nama pays realistic prices for inappropriately located, unfinished estates. Only along commuter corridors or where demographic demand is likely to emerge should the taxpayer be asked to become involved.