The planning legacy
HAVING BEEN lambasted in two official reports for the banking and regulatory failures that contributed to the collapse of the Celtic Tiger, Ministers have little appetite for further flagellation. But the National Institute for Regional and Spatial Analysis (NIRSA) at NUI Maynooth has called for an independent inquiry into the role of Government and local authorities in promoting unsustainable property development through tax incentives, excessive rezoning and reckless planning. It also questions the role of Nama and the treatment of “ghost estates”.
The basic causes of the property crash are well known: greed, speculation and excessive lending. But as NIRSP director Rob Kitchin points out, without rezoning and planning permissions, construction could not have taken place, no matter how much banks were prepared to lend. A “litany of systemic failures” by Government and local authorities led to a dramatic oversupply of housing and Ireland has to learn from past mistakes if the property market is to recover.
This damning report notes, in particular, that tax breaks in the Upper Shannon region caused a 50 per cent increase in the vacant housing stock there while councillors rezoned land for a further 50,000 homes. A number of local authorities allowed developers and speculators to drive development plans while the Government encouraged excess and ignored its own spatial strategy in favour of decentralisation. Nationally, the construction frenzy led to the oversupply of at least 100,000 homes.
Minister for the Environment John Gormley may welcome some criticisms. But his Fianna Fáil colleagues are unlikely to sanction an inquiry. At the moment, the Minister is drafting new planning laws and guidelines for local authorities so that, in future, developments will conform to regional plans and to good practice. During the boom years, elected representatives frequently rejected the advice of planning officials while some managers ignored regional and national objectives.
Certain things have to happen if the housing market is to recover. Supply has to be harmonised with demand; prices have to reflect average industrial earnings and credit has to flow to first-time buyers and those trading up. In addition, the report says that uncertainties surrounding Nama because of its high property valuations and a lack of transparency should be dispelled. Information on the nature and location of bad property loans should be made available and, in many instances, agricultural value should only be paid for rezoned land.
As for more than 600 ghost housing estates that litter the countryside, where more than half of the units are empty or unfinished, NIRSA suggests that an inquiry into what went wrong on the fiscal and planning front should also consider this matter. The civilised requirements of young families trapped in these unfinished estates are being ignored by developers, bankers, public utility providers and by local authorities. That is not good enough. Powerful commercial interests have been bailed out. These families deserve better.