There seems to a lot of revisionist history going on over the last few days. First the CIF yesterday published a report on future housing supply in the country, arguing amongst other things that “County Galway is facing a chronic shortage of new homes over the next six years”. Now this just seems like the definition of irony in the current climate, akin to suggesting that someone with health problems due to chronic obesity needs more cheeseburgers or that the insomniac needs more coffee. As Rob Kitchin suggests, the CIF report is focussing on new homes exclusively and ignoring second hand homes in coming to their conclusions. Well, it may just be me but I was under the impression that houses had a longer lifespan than say cabbages; they don’t suddenly go off after a couple of months or years – if they do then we have some serious questions to ask the banks handing out 40 year mortgages – but that they were more or less ‘built to last’. We don’t necessarily need our houses fresh from the grocers.
And then today, the Independent published an article by former chief economist of the Central Bank Tom O’Connell suggesting that one of the main factors contributing to the property bubble was “restrictive land zoning”. He argues that the ability of large developers to bank large parcels of land in the cities and drip feed it on to the market was enabled by restrictive zoning policies. It’s hard to believe that I am even living on the same planet, let along country, as the originators of these statements.
While O’Connell’s arguments re zoning make some sense in a roundabout manner, they fail to acknowledge a range of factors. Land-banking has certainly been a pertinent issue which has undoubtedly contributed to driving up the price of property. However, his argument hinges on the assumption that supply and demand were somehow logically correlated during the boom. If this was the case then we wouldn’t have an oversupply of some 120,000 properties at present. Supply and demand are coupled in the sense that there was a demand in the early 1990s and there has been a supply ever since. In the rural renewal counties “restrictive zoning” was certainly not an issue, yet these areas are characterised by massive oversupply. At a certain point the price of land became dissociated from any reasonable demand for it as speculation pushed property into the stratospheres of what Tom McCarthy glibly describes in his novel Remainder as “imaginary futures” that are not valued “by what they actually represent in terms of goods and services”. The suggestion that more liberal zoning policies could have prevented the property bubble is indicative of a blind neoliberal assumption in the ‘logic’ of the market, which, in light of the global crisis, is all too obviously unfounded.
The Irish experience begs for more and not less regulation. Rather than zoning more land, the Government would have been better served to implement the recommendations of the Kenny report on the sale of land or to put in place more restrictions on the time period a parcel of land will remained zoned without development taking place. The CIF’s report induces further bafflement. They just seem to be roaming around the detritus of a party the morning after, shaking the bodies of the shell-shocked hungover revellers desperately trying to get them to do another shot of tequila to get the queasy party up and running again. The last thing we need at the moment is to be hitting the property bottle.
Cian O’ Callaghan