There was an article in Tuesday’s Irish Times concerning the land aggregation scheme run by the Department of Environment. To date, 47 sites with a loan book of €110 million has been transferred to the Housing and Sustainable Communities Agency, which has responsibility for the management and maintenance of the land. There have been 115 sites submitted, with loan debts of €260 million and interest accruing. The local authorities can only redeem the loans if they have fallen due for repayment, and local authorities have housing loans totalling €499.5 million which could possibly all transfer at when the loans mature. Nearly all loans are for more than was originally paid due to interest payments. For example, Fingal County Council owed c.€26.5 million for a 24-hectare plot near Balbriggan, originally bought in 2000 for c.€19 million (one wonders why it didn’t manage to use it between 2000-2007 given it was gaining interest every year, they had a very rapidly growing population, and there was a pressing need for affordable and social housing).
This land, and the land in NAMA, represents the best opportunity the State has had, probably in its history, to create a national land bank. Such a land bank would enable the state to control at a reasonable cost the provision of land for key developments such as social and affordable housing, schools, hospitals, play areas, community facilities, transport routes and so on. Because there has been no carry forward costs to holding land (such as property tax), and the recommendations of the Kenny Report were never implemented, the state has been held to ransom by land speculators for development. As a result, land costs have been a significant percentage of overall cost in state-led development, for example, in road building programmes.
And because the land is only in the hands of two agencies, it should be relatively straightforward to consolidate and coordinate. The Irish Times piece suggests that this might be occurring to a certain extent: “The agency [HSCA] will consult the National Asset Management Agency to determine the best use of all land banks controlled or owned by the State. In some cases, Nama may advise that lands originally bought by private developers could be combined with adjacent lands bought by local authorities, for better returns. It is also possible that some of the land will be used for social housing in the future, the department has said.” I have three concerns, however, with present arrangements and practices.
The first is that I do not believe that either HSCA or NAMA have either the mandate or requiste staff with the required skill set to determine the best use for land banks. Long term spatial planning is not in the remit of either agency and yet they are being asked to manage a key component necessary for it. How exactly are they making decisions about ‘best use’ of land banks? How is this evaluated? Against what criteria? In consultation with whom? NAMA has one full-time planner and a planning committee that includes three planners. All very experienced, but this task requires an interagency team of experts with regional/national spatial planning knowledge working on it in a concerted fashion inconjunction with the regional and local authorities. HSCA similarly does not have the in-house expertise.
Second, long term landbanking requires long term planning. In the Netherlands, who have built up a considerable land bank and use it to good effect, they have long term spatial masterplans that detail anticipated development over the next 30-40 years. They have worked out in principal where they want to concentrate population, build transport infrastructure, place industry, retail, utilities, schools, hospitals, services, etc under different demographic scenarios and organised land accordingly. We have no such masterplan. We have a broad spatial strategy that has no specifics and 400 generally uncoordinated local and county development plans administered by 88 planning authorities. Making long-term land banking decisions means have a good sense of what development land the various parts of the state are going to require well into the future.
Third, that the need for a return in the short-term in order to reduce state overhead will mean that the land will be sold back to private developers at a massively discounted price (75-98%) of its value in 2007 or the amount it cost the state. In the future we will need to buy this land back at market prices which will be much more than it is now. The result will be speculators making a fast buck at the taxpayer expense, and in the absence of proper property tax will have little overhead for doing so. This will be a disaster for the tax payer, especially given the opportunity we presently have.
In my view, NAMA and HSCA should produce (1) a public strategy document on how it proposes to manage the land bank it presently has, (2) should then put in place the structures needed to implement this strategy which is properly resourced and staffed. To make decisions about land banking in the absence of such a strategy, with no public oversight or public knowledge as to what is planned (or rather not planned) is shortsighted and foolish and will lead to costly mistakes being made. We have a unique opportunity to make long term gains through land banking, let’s not waste that opportunity by not managing it properly and frittering it away.
Rob Kitchin
Ireland after NAMA 
May 3, 2012 at 7:20 am
Reblogged this on Brian M. Lucey and commented:
“Because there has been no carry forward costs to holding land (such as property tax), and the recommendations of the Kenny Report were never implemented, the state has been held to ransom by land speculators for development. “
May 11, 2012 at 3:51 pm
When I was a young laddie of 12 years (some 54 years ago!) my Da was a self employed, small builder living in Dublin 7.
He worked for many land owners in the Castleknock/Blanchardstown/Clonsilla area at the time.
This area-from the Navan Road at Ashtown to Clonee in County Meath- was all virgin farmland.
I remember, one day, hearing him say that one of his regular employers- a local farmer in what is now Dublin 15 (who farmed in the area now described as Castleknock/Pecks Lane/Auburn Avenue) had received an offer he could not refuse, and he was going to sell his farm.
That farm lay fallow for many, many, years, until development commenced, as the city expanded slowly but steadily, over the decades.
(The Phoenix Park Racecourse,which adjoined his property on the eastern edge, was then designated as a sacrosanct “Greenbelt” area.)
This did not last either..
I often wondered about the person who had the wealth to purchase this farmers land in Castleknock and “sit on it” for such a long period of time -until it turned into pure “gold dust”!.
It is so wrong, that a small elite of wealthy individuals have been able to take control of the building land in our capital city,and elsewhere-and have always done so, and can make vast fortunes which were apparently immune from taxation on such “windfall wealth”.
Instead of this wealth being taxed to funds the “common good”, only the people who have been victimized by these policies have been taxed-again and again, first off in stamp duty when they purchased, and most recently facing new household charges,water charges etc.
The people of this nation must be educated to the catastrophic outcome of this land policy, which-incredibly- is not about to be changed by the current government.
May 3, 2012 at 8:39 am
For as long as there are agenda-driven politicians in charge of matters in our Dáil, the land matter raised here will not be dealt with by the application of logic.
May 11, 2012 at 3:57 pm
“For example, Fingal County Council owed c.€26.5 million for a 24-hectare plot near Balbriggan, originally bought in 2000 for c.€19 million (one wonders why it didn’t manage to use it between 2000-2007 given it was gaining interest every year, they had a very rapidly growing population, and there was a pressing need for affordable and social housing).”
Surely this deserves a Tribunal inquiry in itself?
What kind of public representatives are we returning to office that permit this scandalous waste of money.??
May 11, 2012 at 4:14 pm
“Third, that the need for a return in the short-term in order to reduce state overhead will mean that the land will be sold back to private developers at a massively discounted price (75-98%) of its value in 2007 or the amount it cost the state. In the future we will need to buy this land back at market prices which will be much more than it is now. The result will be speculators making a fast buck at the taxpayer expense, and in the absence of proper property tax will have little overhead for doing so. This will be a disaster for the tax payer, especially given the opportunity we presently have.”
This will be the greatest crime of all.!”
Absolutely correct.
There must be a campaign, by every good and decent citizen of this nation, to change this rotten regime of land speculation profiteering for ever and ever! Vamos!