An interesting article in today’s Examiner looking at the issue of unfinished estates, developers and bonds, and the plight of those seeking to get estates completed to an acceptable standard. See here. The Examiner received information from 28 county councils concerning the taking-in of estates by local authorities, wherein they take over the control and maintenance of ‘public roads and footpaths, public lighting, fire hydrants, water mains, treatment plants, public open spaces and playgrounds.’ There is little point re-iterating the article, which does a good job of explaining the main issues. The following, however, caught our eye: ‘Co Roscommon puts at 86 its number of unfinished estates. Cavan has 55.’
The NIRSA research reported on IAN concerning ‘ghost estates‘ (estates of 10 or more houses where 50% are vacant or underconstruction) puts the number of ghost estates for Roscommon at 35 and Cavan at 21. A ghost estate is a particular kind of unfinished estate, wherein there is a lack of residents or the estate is still under-construction. The Examiner survey starts to give us some idea of those estates, that could have been built any time in the last 12 years, which although they are not half-empty, are nonetheless unfinished in that they fail to fully comply with the planning permission conditions and therefore have not been taken over by the local authority. The Roscommon and Cavan figures, if they were replicated across other counties, would suggest that there are about 1500 unfinished estates in the country, of which 621 are ghost estates. Without hard data, the true number of unfinished estates is speculation, but it is clear that there are certainly more unfinished estates than the NIRSA estimate of ghost estates.
These unfinished estates as well as being a problem for residents, are potentially a large headache for local authorities, as unlike many ghost estates they will probably not be heading into NAMA (given that most, if not all, the properties have been sold) and the bond in many cases will be insufficient to cover the full completion costs, and yet they will need to be finished off and taken-in. According to the Examiner, in Wexford alone, planning enforcement action has been taken against ‘developers in more than 90 cases over the past two years’. There are clearly a lot more enforcement actions to take place and much of the bill, as with so much of the present crisis, may ultimately fall on the taxpayer.
Ireland after NAMA 
April 6, 2010 at 10:08 pm
Donegal has had the practice of leaving the roads, footpaths, playgrounds, etc. to management companies, usually made up of residents. There is much more to be discovered on this matter. A good auld FAS scheme would have been better than the frenzy we witnessed. At least there wouldn’t have been any victims.
April 7, 2010 at 6:17 am
Interesting article indeed but what a sorry picture it paints of planning regulation and enforcement and there is an implication that the development bonds are practically worthless, either because they are set at too low a value (€2000 per dwelling) or are only accessible after completion costs are incurred (and councils may not be able to cashflow these)and many may be subject to protracted claims and negotiations because they are by way of insurance as opposed to cash.
Plainly there is a need for reform in the regulatory and planning environment so that home owners are not left for more than a decade with seeping sewage or eye-sore spaces – speaking of which is Prof Kitchin suggesting sealing as a long term solution? What about the need for a degree of moisture in the property and protection from extreme cold? What about vandalism and antisocial behaviour (gun-metal seals on doors and windows?)? What about building insurance?
There was speculation in yesterday’s Independent that NAMA may lower the threshold for loans to €1m for BoI, AIB and Anglo – down from €5m presently. This may mean that estates with unsold units may come into NAMA though hopefully the prices paid will account for completion works.
Anything that presses NAMA to early consider its €5bn development pot is to be welcomed given the state of the construction industry. Given it’s not added to national debt and as long as it is economically feasible I think we should be urging the release of these funds as soon as possible.
April 7, 2010 at 8:56 am
Agreed that it would be good to see NAMA use some of its €5bn to finish off estates, etc., but at the same time it needs to have the full portfolio in to assess what it is going to commit the funds to (which residential estates, shopping centres, etc.) There is no point throwing more money after bad if it is not going to lead to a sensible return.
re. sealing of buildings – it’s a mid-term solution (5-8 years) for keeping the stock viable. Agreed that they also need maintenance, but if they’re not sealed then it won’t take long at all for entropy to set in and the buildings will have to be knocked. Admittedly this does nothing against vandalism (and security would be needed to deal with that issue), but it does potentially make them salvagable.
April 7, 2010 at 6:15 pm
Indeed any use of the development pot of €5bn should be financially justified but I would hope that it will be before February 2011 (the EU deadline for completing the NAMA transfers) that spending can start.
Also it’s not immediately clear if NAMA can attract further public-private funding to jointly develop which might increase that €5bn resource. I’m not advocating throwing money at the construction industry but it is plainly a sector on its knees and if spending can proceed on a justified basis, we might all be winners.
April 7, 2010 at 1:47 pm
Great write up in The Examiner, cheers.