October 25, 2011
Below is a map of the activity status of unfinished estates across the country.
701 estates are classified as being complete in terms of building work, though they have issues of vacancy
109 estates have not been started
245 estates are active (429 in 2010)
1822 estates are inactive and have outstanding building works
It’s a little difficult to see some of the dots because there are so many estates in certain parts of the country that they overlap on the map (see AIRO to look at on an estate by estate basis), however it’s clear that there is no real pattern to the data. All the counties have a mix of complete, active and non-active sites, though the unstarted developments are clustered around Dublin and Cork. The most worrying issue is the sheer number of inactive estates. Until these become active then the building work required will persist for quite some time, meaning that they will remain a feature of the landscape and that residents will continue to deal with the outstanding issues.Rob Kitchin and Eoghan McCarthy
October 21, 2011
We’ve been working on the 2011 unfinished estates database released by the DECLG last week and computing the changes on an estate by estate basis between 2010-2011. We have upload all the 2011 data and the 2010-2011 change data onto the AIRO website, enabling users to query all the results for every estate. To use the site you will need to register. Once registered, click on the mapping module tab, scroll down and click on ‘+ housing’, then scroll down and select ‘Unfinished estates’. The module will then load. To query the estate data click on ‘indicators’ button and select what data you are interested in.
We will exam the data in more detail over the next couple of weeks. Initial examination of the complete and occupancy data reveals that between Oct 2010-Oct 2011:
105 (3.6%) estates had a fall in the level of occupancy
1536 (54%) estates had no change in the level of occupancy
2109 (74%) estates had a change of 2 or less in the level of occupancy
2396 (84%) estates had a change of 5 or less in the level of occupancy
In other words, the vast majority of estates that were in the 2010 database experienced very little change in the level of occupancy between 2010 and 2011. In fact, the 100 estates (3.5%) with the most positive change in occupancy accounted for 60.7% of all newly occupied units. The change in occupancy then was highly concentrated into a relatively small number of estates. These estates have a geographic pattern. Of the estates that experienced occupancy growth of 40 or more (31 estates), 23 were in Dublin, 3 in Cork, and one each in Waterford, Mullingar, Mallow, Lucan and Ratoath. That is, they are concentrated in the cities and large towns and their commuter belts. Huge swathes of the country saw very little uptake of occupancy in their unfinished estates.
October 13, 2011
The Minister for Housing and Planning, Willie Penrose T.D., has issued a press release and short report on the 2011 unfinished housing estate survey 2011. The data updates the survey undertaken in 2010.
The headline figures
* 2,876 housing developments of two or more housing units were inspected by the Department in the 2011 survey
* 701 developments have no outstanding building work, though they have issues of vacancy, and 109 developments have not substantially commenced. There are thus 2,066 unfinished housing developments that still require building work.
* 18,638 dwellings were recorded as complete and vacant, a 4,612 (20%) reduction from the 23,250 recorded in 2010.
* 17,872 dwellings are at various further stages of construction – 8,794 are nearly complete (9,976 in 2010) and 9,078 are underconstruction (9,854 in 2010), a reduction of 1,958 from 2010 (9.9%)
* In terms of activity levels, 1,822 of the 2,066 unfinished sites were mainly inactive at the time of inspection with 245 active (in 2010 429 sites were active, a reduction of 43%)
* Of the 247 estates categorised as the most problematic from a public safety perspective (Category 4), 36 have been re-categorised to the less problematic Category 3.
The good news
* There has been a reduction in: (1) the number of vacant and unfinished properties – (43,080 to 36,510; 15.25%); (2) 701 estates have no outstanding building work though they have issues of vacancy, and 109 have not commenced.
* There have been some improvements in health and safety and infrastructure (fencing, sewage, roads, paths, lighting etc), though these are not quantified in the report.
In other words, some progress has been made on the ground.
The bad news
* At the present rate of correction in terms of occupancy (6,570 per annum) it will take 5 years for the remaining 36,510 units be occupied.
* There are still significant health and safety issues, only 36 of the 247 worst estates were downgraded. This is a reflection of the lack of access to development funds and the short period of time the local authority fund has been available to redress these issues.
* There is a marginal reduction in the number of incomplete properties (19,830 to 17,872; 9.9%) and there has been a fall in the number of active sites (43%). In other words, development work is slow to inactive.
What the data highlights is that the housing market is still very weak (and much of the fall in vacancy will be accounted for in rentals) and that funding for development work and for mortgages is very difficult to access. It also suggests that rhetoric about there only being 12 months or less supply in many counties (as stated by the CIF) or that we need to build 30,000 units per year for the next 15 years needs to be treated with caution, at least in the short to mid term. Over the long term, we will need additional social and private housing, but we don’t need to start building it right now until the present level of oversupply is worked off and development and mortgage credit become available. And there is significantly more oversupply in the country than brand new, unfinished developments. The Census 2011 revealed that there are 294,020 vacant units in the country, probably about 80-100,000 units are oversupply (on a 6% base rate) consisting of unfinished units, vacant one-off houses, empty investment and secondhand property.
We will be working with the updated spreadsheet over the next couple of days to get a fuller picture of the changes and we will load all of the data up into the AIRO website so that estate by estate, and county by county, comparisons can be made between 2010 and 2011.
October 7, 2011
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.
October 6, 2011
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.
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.