On Monday the Irish Independent reported that local authorities approved 43,000 apartments and homes in housing estates in 2009 and 2010 (not including one-off houses), despite the well known problems of oversupply and overhang in the housing market (see our key housing statistics).  A few months ago, the Indo also reported (also see here) on the land zoning bonanza that has occurred over the past couple years, deep into the recession, as local authorities sought to zone land ahead of the introduction of the Planning and Development (Amendment) Act 2010.  It seems that local authorities have been facilitating developers and banks who wanted to protect or inflate the value of their property and land assets ahead of valuations by NAMA or to sneak it under the guillotine of the new Act.  The Act and the quotas in the Regional Planning Guidelines will help rein back future zonings and permissions, but there is a question mark over existing permissions and zonings.  It could be a case that any attempt to rescind permissions and dezone may lead to cases around injurious affection (compensation for the loss of value by actions of the state).  The new windfall/betterment tax of 80% on trading profits and capital gains arising from disposals of land, where it has increased in value due to a status in its zoning status post October 2009, may head some of these off, though its not clear to me about pre-Oct 2009 cases.

One really has to wonder what is going on here?  Why are local authorities/councillors helping landowners, property developers and speculators to zone unneeded land and give unneeded permissions at the expense of the state, state agencies and tax payers?  The only interests it serves is that of landowners, property developers and speculators.   The new Act is going to help, but no doubt vested interests will be at work trying to find ways around it and the local authorities/councillors seem primed to help them.  What is needed seems to be a fundamental change in planning culture away from a laissez faire presumption for development to a more measured, regulated system free of cronyism and clientelism.  The question is – can local authorities transform and deliver that?  Or are local authorities incapable of getting their houses in order to act in the public good, in which case is there now a case for all planning decisions (and not just plans) to be taken from them?  Perhaps we’re now at the stage where we need to consider this as a serious proposition, if only on a temporary basis until we have a system fit for purpose.

Rob Kitchin