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