Can vacant housing solve the social housing waiting list?

There has been some recent talk in the Dail and the media about the extent to which Ireland’s vacant housing stock could solve the social housing waiting list and save the state half-a-billion euros worth of rent supplement payments per annum.  To what extent is this wishful thinking?

In principle it looks like vacant housing stock should be the answer to the social housing waiting list.  There are 98,318 households on the waiting list and 230,056 housing units vacant in the country (excluding holiday homes) according to Census 2011.  However, both figures are composed of a variety of types of household and housing units that deny a simple matching up.

The 98,318 households on the waiting list are composed of the following categories: 65,643 persons unable to reasonably meet the cost of the accommodation they are occupying; 9,548 persons in need of accommodation for medical or compassionate grounds; 8,534 persons sharing accommodation involuntarily; 4,594 persons living in overcrowded accommodation; 2,348 homeless persons; 2,226 older persons; 1,824 Travellers; 1,708 persons living in accommodation that is unfit or materially unsuitable; 1,315 persons with a disability; and 538 young people living in institutional care or without family accommodation.

The 230,056 vacant housing units consist of 18,638 unsold, vacant units on unfinished estates owned by developers or banks, a few thousand unsold, vacant one-off houses, and c.200,000 units in private ownership  that consist of units presently for sale or available for rent, empty bereavement properties, vacant investment properties, units where owner is in long-term nursing care or retirement home, or empty due to short-term or long-term migration.  In addition, there are another 8,794 nearly complete units and 9,078 under-construction units on unfinished estates.

On the one hand then, we have 65,643 people in suitable accommodation which they can’t afford, along with 13,129 people (medical condition, disabled persons, older persons) that need specialist or sheltered accommodation.  On the other, we have a stock of vacant units that are universally in private hands (either owned by an individual or a company), are not designed for social or sheltered housing, and are often in places unsuitable for social housing tenants (they lack public transport, social facilities and access to employment).   A small proportion of this vacant stock are in unfinished estates and these are owned by developers and banks, only a small proportion of whom are in NAMA (a large number of unfinished estates were funded by foreign-owned banks).  The means for the state to presently access this unfinished estate stock is the Social Housing Leasing Initiative.

Put simply, vacant stock is privately-owned (even in cases where the loan is with a state bank or NAMA) meaning there are only two options with respect to moving people on the social housing waiting list – move them into other private accommodation reliant on rent supplement or into private accommodation reliant on the social housing leasing initiative.  Neither is going to save the state much money as the state does not own the property and does not have any excess stock of its own.  Moreover, the latter will leave empty private rental stock in its wake whose buy-to-let mortgages will start to default, placing more pressure on the state-guaranteed banking sector.  In other words, vacant stock is not the answer to the social housing waiting list; it’s just moving people around privately owned stock.

Ultimately, the only solution to the social housing waiting list is for the state to build or buy social housing units, or to accept that the 65,643 private rental sector units that are presently unaffordable for tenants is de facto social housing stock held in private hands.  The only solution to vacancy is household growth, so that supply and demand equalise.

Rob Kitchin (@robkitchin)

 

The need for a land banking strategy

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

 

NAMA and debt forgiveness

As reported in The Irish Times on Wednesday and on NAMAWineLake it seems there might have been a fundamental change in the extent to which NAMA will pursue developers for repayment of loans.  As Vincent Browne noted, in the NAMA debate in the Dail the then Minister for Finance, Brian Lenihan, stated:

“Let me be clear – Nama is not designed to be and will not be permitted to operate in practice as a bailout mechanism for developers who have operated irresponsibly.  The amount a borrower owes will not change because of the transfer of a loan from his bank to Nama. The agency will have a statutory duty to maximise the taxpayers’ return and will therefore be expected to use its entire means to this end. The Bill also provides the agency with the wide range of powers it needs to pursue borrowers and enforce security.“

However, on Saturday Night Show on RTE1 (clip below), the developer Harry Crosbie stated:

HC: “The money we’re going to pay back is what they [Nama] paid.  That’s the only money.”

[...]

BOC: So the amount that was taken off on the haircut that we [the taxpayers] paid through recapitalising the banks effectively …

[HC] That’s correct, I will pay that back

[BOC]… that money’s gone?’

[HC] ‘Over above the haircut is gone.’

[...]

[BOC] ‘I paid crazy money for a house, but I have to pay back every penny of that. And I have to face those consequences.  Do you get that people might be looking and thinking, so he’s going to pay back, whatever, half the money, what NAMA paid for it, and we pay back the rest of it and Harry is laughing like.’

[HC] ‘I’m not saying it’s going to happen [but]  there’s no other way it can be fixed.

[...]

[BOC] ‘So we all just have to accept there is a lot of money gone?’

[HC] ‘Correct, correct.’

 

In other words, if a developer borrowed €100 million from Anglo for a failing development, and the loan was transferred to NAMA with the average haircut of 58%, then he expects to only pay back €42 million.   Now, not only has the developer been saved from going bust, which he would have done without NAMA stepping in to take on the loan, but he’s also had his debt radically reduced, and the €58m loss to the banks is being picked up in part or full by the state.  This distinctly sounds like a bailout for developers at the citizens expense.  As Vincent Browne notes, however we look at this it is not maximizing the return to the taxpayer.

.

NAMA’s response so far: “The priority of Nama is to recover the amount Nama paid for the loans … Nama would pursue the full amount in many cases, depending on the level of co-operation they had received from the borrower but often there was no point.”   That’s it.  It seems to me that there is a point in pursuing Harry Crosbie given his confidence as to how his developments will turn out.  At least he should fail a whole series of stress tests before the pursuit is abandoned, or the debt repayments restructured over a much longer period, or the asset be transferred either in part or full back to the loan holder as happens when a home owner fails to pay back a mortgage on a house.

NAMA has been critiqued by both the Right and the Left.  For those on the Right, NAMA represents state interference in the logic of the free market, disrupting its ‘natural’ recovery by artificially controlling large elements of the property market and protecting failed developers and speculators in the short term who otherwise would have gone bust, thus blocking the growth of more resilient players or new start-ups.  For those on the Left it protects those who created the crisis but it does nothing to protect home owners and tenants struggling to pay mortgages and rent and who are also underwriting NAMA’s costs (and do not have access to debt forgiveness).  It seems that both of them are correct.

What NAMA is up to on behalf of the nation clearly needs to be more fully explained.  These kinds of relevations should not come out through a chat show.  Are decisions about debt forgiveness being decided by NAMA alone on behalf of the nation or have the government made this decision?  In either case, where is the public debate on the issue?  It is after all a state investment on behalf of citizens.  A key priority it seems is for NAMA to be opened up to freedom of information and the rationale for their strategy and decision making made much more transparent.  There is a lot to learn here from the Resolution Trust Corporation in the US who were much more open and clear about what they were doing and why.  They understood that good communications builds understanding and trust.  We deserve the same.

Rob Kitchin

 

Innovation and the Built Environment

If the last decade was dominated by ‘creativity’, then ‘innovation’ has surely now been well and truly adopted as the current buzzword of choice. This can be witnessed throughout various institutions and endeavours, from the recently re-titled Department of Jobs, Enterprise and Innovation, to Innovation Dublin (an outcome of the ‘Creative Dublin Alliance’), and the  TCD/UCD Innovation Alliance. It is hard to trace exactly where the focus on innovation came from. Perhaps notions of ‘culture’ and ‘creativity’ are too difficult to clearly define, too loose around the edges, so to speak. Innovation is clear. It has a direction and a specific output. It represents a desire to connect diverse elements such as scientific output, technological change, the creative arts, and, at times, the social sciences towards largely economic goals. The new Provost of Trinity College, Professor Patrick Prendergast, recently emphasised this perspective as follows; “When James Joyce wrote Ulysses he was being disruptive in changing the way we think about the novel. Joyce was a true innovator. A century later he might have created Google” This might have been a throwaway comment, yet it highlights the current desire for that which might once have sat on the outside to be brought centre-stage. Certainly those areas associated with ‘culture’, the arts, and ‘creativity’ remain a feature of current activities and debates, but increasingly there seems to be a desire to quantify their actual impact. While I am not questioning the role that those sectors focused upon innovation in various guises (such as the afore-mentioned tech and science sectors) will play in reshaping the Irish economy in the coming years, there seems to be a very real danger that the role of those elements that are less tangible, such as the ability to critically engage with, and challenge, the structures of society, will become lost in the search for direct  and measurable outputs at every turn. While economic recovery is paramount, the current period also offers the potential to challenge the very structures that shape our society.

'Trees on the Quays': Proposal for 'Vertical Park'. Source: http://www.treesonthequays.com

To narrow the focus a little here, the recent plan,  by Mahoney Architects to convert the half-built Anglo Headquarters into a ‘vertical park’ raises some interesting questions about the relationship between innovation, the built environment, and the widely accepted norms of property markets. As outlined on the project website; “The Trees on the Quays project  proposes to radically transform the shell of the abandoned Anglo Irish Bank Head Quarters into an innovative Public Park which will become a focal point for the commemoration of the Centenary of the Irish Republic.” There is much to be admired in this proposal, both in as much as it would stand as a permanent reminder of the problematic nature of a system so orientated towards property development, and the ability to transform it into something completely different for public use. Crucially however, the potential for such a project to gain traction or receive support lies in the willingness of different agencies, such as NAMA and the Dublin Docklands Development Authority, to challenge the status quo. It will take a willingness to show that land-use is not simply at the mercy of booms and slumps, and that the alternative use for the Anglo Headquarters (or similar half-built developments) is not just about finding temporary solutions until, as The Irish Times recently stated, “…the property market recovers.” If Irish society is to get past the obsession with property that so dominated the last two decades, there must be a willingness at different institutional levels to challenge the meanings of urban space beyond that which is related to the property market. Ideas such as the Vertical Park, and similar proposals by NamaLab, can help redefine the meanings of our towns and cities, so long as they are allowed to. This requires critical reflection of the structures that contribute to and shape urban space in the first place.

Philip Lawton

 

NAMA properties database

The Journal.ie yesterday picked up on a Dail question asked by Sandra McLellan, T.D. to the Minister for Finance, Michael Noonan, T.D.   Noonan responded by saying that NAMA will release shortly a database of NAMA properties.   The Journal.ie suggests that NAMA will ‘publish a comprehensive list of all the properties under its control.’  I interpret the Dail statement differently – that it will not be publishing a comprehensive list of all the properties in its portfolio but that it will only publish properties that are in ‘control of receivers appointed to enforce against NAMA debtors (appointed either directly by NAMA or by participating institutions working on its behalf)’.  In other words, they are only putting up the properties they are seeking to offload (effectively advertising them).  If the properties are not in receivership they will not be included in the database.  Whilst it would be preferential to have a list of all NAMA properties this is at least a start. Hopefully, more data will follow in due course.  Another Dail question in this regard might be a useful one.

Here is the Dail question and answer, with the latter part of the answer confirming that NAMA will give first option on receiver properties to public bodies, thus fulfilling some social and economic objectives.

53.  Deputy Sandra McLellan  asked the Minister for Finance  if he will engage with the National Asset Management Agency to identify buildings and properties in its portfolio which might be suitable for local sports pitches and facilities; and if he will make a statement on the matter. [13705/11]

Minister for Finance (Deputy Michael Noonan): NAMA has, in the first instance, acquired loans and it advises me that property or other assets securing these loans remain in the possession of debtors unless it takes enforcement action against them. I am informed that, under an initiative currently in preparation, NAMA will shortly include on its website a database of properties which are under the control of receivers appointed to enforce against NAMA debtors (appointed either directly by NAMA or by participating institutions working on its behalf). This will provide a single source of information on NAMA assets which are for sale and it will be updated on a very regular basis. It is expected to be up-and-running within a matter of weeks.

Within the context of its commercial remit, NAMA has made it known that it is open to considering proposals aimed at contributing to broader social and economic objectives, including facilitating public bodies and it has committed to giving first option to such bodies on the purchase of property which is within its control and which may be suitable for their purposes. In these circumstances, NAMA is available to meet with public bodies to discuss any specific proposals that they may have regarding local facilities.

Rob Kitchin

 

NAMA only has loan book on 10 percent of worst unfinished estates

At the first day of the Irish Planning Institute’s annual conference, Minister of State for Housing and Planning Willie Penrose has given some indication of what is coming down the tracks in terms of planning and housing policy and a bit more information concerning unfinished estates and land dezoning.  I’m not attending the conference, so this post is based on the reports in the Irish Times and Independent.

The Minister revealed that NAMA only has the loan book of about 10 per cent of about 150 of the worst unfinished estates that pose health and safety risks.  I’m not sure quite what has happened in the last couple of months, but it was previously reported by the Advisory Group on Unfinished Housing Developments that there were 348 estates where vacancy is over 50% that pose significant health and safety risks.  Somehow 200 estates seem to have been taken off the health and safety risk list, although it is highly unlikely there is any significant change on the ground.  Regardless, the point is that NAMA actually has influence with respect to a relatively small number of estates.  Rather, the vast majority of unfinished estates requiring substantial work were financed by foreign-owned banks operating in Ireland.  If the developer has gone bust and defaulted, then these estates are owned by those banks and the liabilities with respect to health and safety rests with them.  It’ll be interesting to see how they respond to these liabilities and the obligations they impose and complete works or make sites safe.

The Minister revealed about 28 per cent of the loans at Nama relate to land and development, about 16 per cent are in the Dublin area.  I’m not quite sure what this really means.  Dublin area is quite vague – is this the four counties, the metropolitan region or the commuting footprint or some other area? Is the Dublin portion 16 percent of NAMA loans or 16 percent of all land (ie 4.5% of all loans)?  Is the 16 percent land value or land size?  Certainly the vast majority of zoned land in the country is outside of Dublin.  Presumably much of this land has also been financed by foreign-owned banks operating in Ireland.  Either way, land values have dropped substantially in value – 75-95%, especially if it was bought at zoned prices and it has been dezoned.  If NAMA has overpaid for land, then this will be one part of their loan book that will underperform.  Saying that, the NAMA land, along with the DEHLG land aggregation scheme, represent a real opportunity for Ireland to take a long term strategic approach to spatial planning underpinned by a landbank controlled by the state.  Over the long term, if this approach is taken, the state will massively benefit in both planning and financial terms.

In terms of dezoning, 12 of the State’s 34 local authorities have so far made changes to their development plans which has led to thousands of sites being reclassified as either surplus to present planning need or unsuitable for development.  The remaining local authorities will have dezoned land by October.

There will be a national co-ordination group established to oversee action by local authorities in dealing with the most problematic unfinished housing developments.  The report of the Advisory Group on Unfinished Housing Developments will be published in the next week or so.

He stated that the planning system should be “focusing demand in a way that will rekindle market interest in stalled developments”.  I’d be very interested to see the detail as to how it is envisaged this should happen.

He reaffirmed the commitment to the core strategy approach and evidence-based requirements to planning as set out in the Planning and Development (Amendment) Act 2010.

He also stated: “We are refocusing on revitalising our city and town centres, moving against the tendency of the Celtic Tiger era to envisage extensive, even sprawling extensions of our cities and towns, drawing the lifeblood out of older, established central urban areas.”  Again it will be very interesting to see the detail in terms of such revitalisation.  The rhetoric might be good, but it is the substance that matters.

Rob Kitchin

 

What will be the fate of architectural heritage in the NAMA portfolio?

It’s not just Ireland’s newest build of unfinished estates that requires maintenance, restoration and completion work. The Royal Hibernian Academy (RHA) have just released a statement, reported in the Irish Times, concerning the fate of some of Ireland’s historic buildings, such as the Hume Street Hospital in Dublin, bought by developed Michael Kelly for €30 million in 2006. They note that such buildings are suffering in two respects. First, that some of them are being left to the mercy of the elements, with nature doing a fair amount of damage to the structures. Second, that some of them are being visited by plunderers and vandals. For example, in the Hume Street case, the roof has been plundered of lead and building of copper piping, and no doubt ornamental fittings and other items. Belcamp College, on the north side of Dublin, was recently ransacked and set on fire.

The RHA strongly criticise NAMA for failing to ensure that developers with properties in their portfolio properly secure and maintain historic buildings. They argue that ‘conduct of omission as in itself an act of vandalism.’ They have accused the organisation of ‘not taking its legal responsibility seriously in regard to appropriate protection of several historic buildings currently under their ownership’ and said its ‘response to our approaches to them . . . has been evasive and ambiguous’. NAMA it said, would not admit to possessing the loan book on certain historic properties and would not any commitment with regards to safeguarding them. In this sense, NAMA is staying true to form, as it’s hardly a paragon of openness and transparency.

NAMA has responded by stating that it does not directly own any of the properties, only the loan books, and a spokesperson for the agency said that ‘it is incorrect to say that Nama has a direct responsibility in this area’, although it ‘has directly taken action with the property owners or with the relevant authorities to try to ensure that the properties are properly secured.’

However, properly secured is not the same as properly preserved and in response, the RHA has said that ‘section 141 of the 2009 Act that established Nama gave it the authority to seek “entry and maintenance” orders in the District Court to secure any building “at risk from trespassers or vandalism”.’ They would clearly like to see NAMA be much more proactive in forcing developers to secure and preserve Ireland’s architectural heritage.  The alternative route will be, as with the Hume Street Hospital, seeking planning enforcement notices to try to force both the developer and NAMA to take action.  That action has been taken by Dublin City Council and it requires repairs to be carried out by April 29th (this Friday).  Having to serve notice on NAMA to ensure saving some of our most historic buildings is not an ideal way to proceed, but it might well be the principle route open to the RHA and others unless a more proactive approach is adopted by the agency and developers.

Rob Kitchin

 

NAMA and Northern Ireland

NAMA have today revealed a bit more of a detailed breakdown of the NAMA loan book in Northern Ireland and its geography.  NAMA NI loans total £3.35bn (c. €4bn) and relate to 180 individuals and companies.  The loan book is 5% of NAMA’s portfolio.  Undeveloped land accounts for £2bn (60%), investment properties £1bn (29%), and land and property under development, £350m (10%).  Just 1% relates to residential development. With respect to Geography: 32% of the loan portfolio is located in Belfast, 21% in County Down, 19% in County Antrim, 8% in County Londonderry, 7% in County Tyrone, 7% in County Armagh, 4% in County Fermanagh and 2% in the city of Derry.

What is striking here is the amount of land in the portfolio.  I’m assuming that the £2bn figure is after the haircut is applied and using Nov 2009 prices.   Of course the market has fallen since Nov 2009 and £2bn in today’s market will buy an enormous amount of acreage, so one presumes the NAMA holding constitutes a very sizeable landbank.  Given the geographical spread of the loans, much of it has to be located in rural areas and around small towns and villages, and one presumes that it’s main commercial usage over the short term is agriculture.  It would be very interesting to get a further breakdown of the size of the landbanks, where they are, and how much was paid by NAMA for the loans on them, so as to get some idea as to how they view the long term use of the land – I’m working on the principle that much larger haircuts will have been applied to land that has limited development potential and is more suited to agriculture.

The size of the land holding in the portfolio is what troubles me.  It is the part of the portfolio that has fallen most in value and will be more difficult to sell on, unless an investor is prepared to sit on it for a while to let it appreciate in value.  Most developers seek to turn land over quickly because it’s a sunk cost with no working return.  Clearly NAMA has time to wait for the market to stabilise and recover before selling on, but even so that’s a lot of land to be managed, sold on or developed.

Clearly, one of the concerns for the Northern Ireland property market is for NAMA to destabilize it through firesales, and Ronnie Hanna, Head of Risk and Credit, who released the figures today, went on to try and reassure that this would not happen and that NAMA will act responsibly.  To quote him, he said that NAMA would:  “assist in the stabilisation of the property market in Northern Ireland, by providing liquidity to the market and by being able to take a longer-term approach where necessary”.   That’s all well and good, but what I would like to see is a more detailed business plan as to how NAMA intends to try and realise its assets over the long term in NI given the nature and geography of the portfolio.  This is likely to provide more reassurance to the property market there.  At the minute we’ll still at very broad brush generalities, though at least it’s a small step in the right direction.

Rob Kitchin

 

Land zoning questions

Frank McDonald writing in today’s Irish Times reports that the local area plan for Bandon has zoned land for an additional 1,700 houses.  And yet he notes that land is already zoned for 1,500 houses, much of it it seems within the NAMA portfolio.  There are 6,119 houses in the Bandon Electoral Area Local Plan as of 2010.  The DEHLG survey of unfinished estates show that there are 9 such estates in the town of Bandon itself with a total of 370 planned units, of which 229 have been commenced (84 are occupied; 105 are completed and vacant, 40 still under-construction).  4 of the 9 estates have yet to be fully completed.  There are 305 unfinished estates in County Cork.

The local area plan then begs the usual questions. Why does Bandon need land zoned sufficient to increase the number of residential units in the area by 50%?  As it presently stands, the area already has an oversupply of units that it is finding it difficult to source residents for. Does the area really expect to double in size in the next 2-10 years (in other words are the population projections realistic)?  And why does the area want to zone land above and beyond that in the NAMA portfolio, on which the taxpayer has staked it’s financial future, at this point?  Surely additional zoned land is going to undermine the potential value of existing zoned lands, thus undermining the ability of NAMA to fulfil its mandate, and thus run counter to the national good?

It may well be that Bandon forms part of the Cork commuter belt, and it is projected to grow in the future, but surely land should be zoned on a needs be basis?  Or is there some other agenda at work in the local area plan?  Or perhaps the plan is still caught in a different era?  Whatever the rationale, it seems extremely unlikely that Bandon is going to need land for 3,200 additional houses in the immediate future.

Rob Kitchin

 

CIF and NAMA

CIF and NAMA were never going to be happy bedfellows.  The former represent the interests of developers and builders, the latter is charged with relieving the banks of property loans to try and address the banking crisis, and to manage and offload those loans on behalf of the state and taxpayers.  Whilst most citizens view NAMA as a bailout to developers, keeping them afloat when most of them would have gone to the wall a couple of years ago, CIF views NAMA as a predator that is trying to radically overhaul and restructure the building industry, is trying to gain at the developers’ expense and country’s best interests, and is a punative instrument that is inflicting more harm than good on the property sector.

As reported in some of the papers today (here and here), Lombard Street Research have just published a report commissioned by CIF, attacking the rationale and practices of NAMA (which makes interesting reading).  NAMA has responded by arguing that the developers are living in denial and they need to wake up to the new realities of property development and the market. Whilst there is undoubtedly a number of issues concerning the formation and operation of NAMA, CIF’s principle problem is that there is little public sentiment for their views given that they’re clearly a vested interest who seem to care for little else other than the interests of its members (which they try to spin as, what is good for us, is good for the country – the same as they did all through the boom).  From NAMA’s perspective it is finding its work tough because the banks and developers seem very reluctant to work with it, they are economical with the truth, are slow in coming forward with documentation and workable business plans, and are clearly more interested in their own self-interests than acting as good citizens in dealing with the present crisis.  No doubt the spat will continue to run and run.  There are unlikely to be any winners and ultimately citizens will pick up part of the tab.  Sounds about par given the history of the crisis so far.

Rob Kitchin