May 2012


So the government announce this evening that the DDDA is to be wound up after 15 years in operation and that responsibility for the area will be transferred to Dublin City Council, in the person of the Dublin City Manager. How ironic? Twenty five years ago when the CHDDA (the pre-cursor of the DDDA with many of the same personalities involved in the early days) were established, the general discourse, in common with most of the neo-liberal gospel being preached at the time, was that the local authority could not be trusted to do the job and should have power over this area removed from them.  While they may not have been particularly efficient in sparking development nor particularly astute with dealing with the private sector, they certainly could not have been accused of the litany of mismanagement that we are now hearing the DDDA were responsible for. Interesting too that we are being told that what happened was due to a lack of ‘corporate governance’ or (Submission by Executive Board to Minister for EHLG, January 2010) rather that anything more sinister that public representatives and agents have been accused of over the last few years.

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What is most important is why has it taken so long for action to be taken? Granted Prof Niamh Brennan was appointed as Chair of the Board in March 2009 to deal with some of the problems and reported to Government on them, but the report of the Comptroller and Auditor General and announcement by the Government tonight comes four or five years after a lot of people were questioning what was going on in the Authority? In the late 1990’s, access to any sort of information on the activities of the DDDA – a public agency after all – was almost impossible to come by. In 2008, a number of serious questions in relation to the Authority were raised in my book Dublin Docklands Reinvented (Dublin: Four Courts Press). For example, how could one agency simultaneously act as co-developer and planning authority on the one site (Irish Glass Bottle site)? Could the government not see the potential problems? Highly respected and experienced journalists were also raising these questions and others about the activities of the Authority at the time. For example why did Brian Cowen sanction an increase in the capacity of the authority to borrow even more money when it was obvious that they were stepping way beyond their remit and gambling with the public finances? It is no secret that along with the issues already in the public domain about the relationship between the DDDA and Anglo-Irish Bank, other projects within the area were also promoted, developed and implemented by an overly tight network of closely connected individuals where there was at the very least serious conflicts of interest.

As I think about my experiences researching the docklands development since the late 1990s, it strikes me that many of the community activists in East Wall and surroundings must be laughing tonight. For years, they have called for greater transparency in the operations of the Authority and when they questioned or objected to particular decisions, they were fobbed off as ‘naysayers’. The Government decision tonight is symbolic because it is the final nail in the coffin to a project that represented the best and worst of the Irish experience over the last decade. While it achieved many good outcomes and radically altered the face of this large part of Dublin City, how ironic that after 25 years, it is the local authority who gets the last laugh!

Niamh Moore

If there was trend that sums up the excesses of the Celtic Tiger bubble this is it: between 1991-2011, for every 1000 new households, 1,493 housing units were built; for every 1000 new people added to the population, 874 housing units were built.

According the Dept of Environment data between January 1991 and December 2010 there were 933,404 housing units built in Ireland.

As recorded in the Census 2011, between April 1991 and April 2011, households grew by 625,124; the population grew by 1,062,533 in the same period.

Growth in housing stock, households and population 1991-2011

Even accounting for obsolescence and replacement (approx 72,000 units based on the difference between housing stock change in the 91/11 censuses and total constructed units), we were building way in excess of demand, hence the high level of present oversupply.

Rob Kitchin

The CSO have released the age profile data from Census 2011.  They have produced a nice booklet providing some summary analysis.  We have produced a few interactive data visualisations of the data on AIRO.  Here are a summary of some of the trends.

The population as a whole is ageing and all age cohorts increased in size with the exception of 19-24 year olds.  This is partly to do with recent emigration but is more reflective of a low birth rate in the late 1980s and early 1990s.  The birth rate in 1980 was 74,064.  In 1994, the lowest rate and presently aged 17-18, it was 48,255.  In 2010 it was 76,762.  In other words, this is a small cohort working its way up the population pyramid.

This pattern is not universal.  Cork city, Galway city and Limerick city all have quite high populations aged 18-30, reflective of high student numbers.  There is a noticeable drop age 30+ as people move out the city at family formation age.  This is also evident in the relatively low rates of children in these areas.

There has been a large increase of 17.9% (2006-09) to 356,329 in children aged 0-4.  This increase was experienced everywhere, but was particularly high in the suburbs and commuting counties.  For example, there has been a 72% increase in 0-4 aged children in Fingal between 2002-2011.  Similarly, there has been a growth (12%) in 5-12 year olds.  However, this age group dropped in number in Cork City and Limerick City, and the other cities for secondary school age children.  This is partly due to the lower birth rates in the late 1990s/early 2000s working its way through, but also migration of families out of the city centres.  Interestingly, there has been a 50% increase in the number of 0-4 year old children living in apartments (just over 20,000 overall).  There has also been a slight drop in the rate of 0-4 year old children living in one parent families to 15.4% (19.1% for 5-12).

There was a 14.4% increase to 535,393 in the number of people over the age of 65 in the state, with 389 over the age of 100.  The over 65s constitute 11.7% of the population (one of the lowest rates in the EU – average is 16%).

Despite the strong growth in children, the average age in the state has increased slightly to 36.1.  There is a slight variation around the country, with the average age being 38.7 in Cork City and 32.9 in Fingal, reflective of the large number of family units in the latter.  The west has a slightly higher average age than the east, and rural areas are slightly higher than urban areas.  There are just three counties with falling average ages – Laois, Cavan and Longford, due to strong in-migration and natural increase.

Given the number of births and the declining death rate, the age dependency ratio (the ratio of children under the age of 14 and adults over 65 to the working age population of 15-64) has risen from 45.8% in 2006 to 49.3%.  Given that children are for the most part dependent until at least 18, it is clear that the dependency ratio is for all intents and purposes well over 50%.  In other words, over 50% of the population are largely dependent on the remaining population for some level of support.  The youth dependency rate is 31.9% and the old age rate is 17.4%.  Rural counties tend to have higher old age dependency rates, for example, Mayo, Leitrim and Cavan, due to younger migration to urban areas.  Meath and Laois have high youth dependency rates, with Cork city and Dublin city having the lowest.

Finally, there are slightly more women in the state then men, with the lowest ratio on record of 981 men/1000 women.  The profile varies across the country, with slightly more men in rural areas between the ages of 20 and 70 and in urban areas under the age of 20.  After the age of 20 there are slightly more women in urban areas due to migration patterns.  After 70, women outnumber men in both rural and urban areas.

Rob Kitchin

This morning AIRO released a new interactive mapping module that maps the catchments of all the universities and six of the IOTs using Irish Times school feeder data 2009-2011.  The module is available here and the talk from HEA conference in the Aviva Stadium is here – HEA Talk 2012 2.pptx.  The maps below are the 7 universities and 6 selected IoTs.  What the maps show is that no one institution has a truly national catchment, with the majority of students coming from the immediate regional area.  The dots are schools.  On the interactive version, if you click on the school it will provide information relating to how it feeds into the HE system.  The powerpoint also gives some basic demographic information on future demographic demand – it is clear that the HEIs are going to come under huge pressure as the present 0-14 age group works its way through the education system (demand is set to increase by c.30% over the next two decades).

 

Rob Kitchin, Eoghan McCarthy and Justin Gleeson

I would like to draw your attention to the RSA Irish Branch conference:

TEN YEARS ON: REVISITING THE NSS

 ESRI, Dublin. Tuesday 5th June 2012

Opening Address: Ms. Jan O’Sullivan T.D. (TBC) – Minister of State DOCLG

Keynote Speaker: Peter Mehlbye – Director ESPON Coordination Unit – Luxembourg

Registration fee: 50 Euro including lunch.

Online Registration at: http://www.bookyourplace.ie/

For full program and conference updates see:

http://www.regional-studies-assoc.ac.uk/international-networks/rsair.asp

For further information: chris.vanegeraat@nuim.ie

 

AIRO has put up a new interactive map of where people living in Dublin were born.  One of the three maps was carried in today’s Irish Times.  To see all three variables – Born in Dublin, Born elswhere in Ireland, and Born overseas – visit AIRO version.  Static versions of the maps below.  On the interactive versions, if you click on an area you’ll get a bit more info.  The data is at ED level and is part of the Census 2011 undertaken by the CSO.

We do not, at this stage, know the counties in Ireland that some Dublin resident’s were born in or which countries oversees born residents were born in.  Also, it is important note the difference between location of birth and nationality.  The largest number of foreign born residents living in Ireland are from the UK, but over half of them have Irish nationality.  The largest nationality other than Irish living in Ireland is from Poland.

The maps show that there are parts of the city were non-Irish born people constitute over 50% of the population, especially the north inner city; and that there are some parts of the city where over 80% of the population are born and bred in Dublin.  No part of the city has more than 34% of the population being made up of people born elsewhere in Ireland, with the largest concentration in the D4 area and surrounds.

Born in Dublin (Census 2011)

Born elsewhere in Ireland (Census 2011)

 

Born abroad (note does not mean not Irish national; Census 2011)

Eoghan McCarthy and Rob Kitchin

As reported in the New York Times and elsewhere, Hobbs, New Mexico, has been chosen as the site for a new purpose built ghost town.  The $1 billion euro venture will be a large urban research site, having no residents, and will be used to ‘test everything from intelligent traffic systems and next-generation wireless networks to automated washing machines and self-flushing toilets.’  The 15 square mile development will form the ‘Center for Innovation, Technology and Testing’.  The aim is to become a locus for smart city research and to attract significant R&D investment into the area that will use the facility to develop and test their innovations in city infrastructure, vehicles, domestic and commercial appliances and so on.

Could we use our ghost estates to foster such economic development?  Partially, maybe.  On the negative side, ours are already largely built and would need a lot of retrofitting, are too small in scale for city-wide testing, and nearly all have residents living on them or adjacent to them.  Still, it might be possible to use one or part of one for smart homes/living research.  An idea that someone might want to explore, perhaps.

Rob Kitchin

I’ve been asked a few times two related questions: (1) what do I think are potential issues relating to residential property that might have been overlooked or skirted around by the media which might have long term consequences for the property market? (2) what issues would you keep an eye out for if you were buying a home?  Here’s five of those issues, which may be ticking time bombs that will not be revealed until owners try to sell.

1) Units that are poorly built and/or used poor materials.  From talking to people in the construction/planning sector I worry that Priory Hall is the tip of an iceberg.  A massive amount of property was built between 1995-2007.  It was put up quickly in a system that largely  self-certified.  The emphasis was often on speed and profit, not quality and standards.  Any system that pays people by quantity (think brickies per block) and does not have adequate oversight will lead to shortcuts and bodges. As the scandal around pyrite in homes has revealed, materials too were often sub-par.  It’s estimated that 20-60,000 units have problems of pyrite.  Without widescale, independent inspection it is difficult to know the scale of the quality and safety problem. I worry that the DECLG, local authorities, banks, construction insurers, and developers are not keen to undertake or commission such a systematic survey of new properties for fear of cost, disruption, legal wranglings, and political fallout.  A survey would reveal the scale of issues, provide confidence for all units meeting standards, and highlight what does need to be addressed.  That has to be better than burying our heads in the sand and hoping it’ll all be okay.  It’s clearly not okay.  Ask anyone in a pyrite house or Priory Hall or have other construction issues.

My advice for buyers: do as much research about the builder/developer/estate as you can and get the house thoroughly surveyed, especially if it is built in the last 15 years.

2) Housing built on flood plains.  Again, we know this has happened – they’ve flooded.  Just because a house has not yet flooded, does not mean it is safe from future flooding.  We do not know the full-scale of the issue.  It would be possible to calculate by plotting the location of all the houses in the state onto floodplain data.  Knowing what houses are at risk enables us to start to try and do something about it, like prepare flood defenses.  Flooding causes great damage and causes much distress.  We also need to prevent future development on flood plains – simply stated, local authorities should dezone floodplains and not zone there again in the future.

My advice for buyers: do some research on the likelihood of a property flooding.  Look at myplan.ie and the OPW floodplain data and talk to local residents who have lived in the area for a while.

3) Housing that lacks building regulation certification.  As noted above, in a system that requires self-certification, corners can be cut.  For relatively small jobs, that are being undertaken by small building firms that do not have company engineers/architects or are being carried out by the owner themselves, one of the corners that can be cut is getting the building quality and standards certified.  A lot of people seem to think that they only need to comply with planning legislation for their extension or garages/outbuildings.  Not so.  There are a whole suite of building regulations that have to be complied with.  It is impossible to get a full compliance certification retrospectively as there is no way of testing the foundations, etc.  The best one can get is partial compliance based on an inspection of what is visible.  My sense is that many extensions built during the bubble do not have full certification.  This can cause a major problem to prospective sellers/ buyers as mortgage companies are reluctant to lend money on such property at this time (they didn’t care so much during the bubble as captial appreciation offset the problem caused by the extension).  They might only lend money to the value of the house minus the extension, or ask that the price of the property be dropped to that minus the extension.  They might also ask for the extension to be knocked down as it is a liability on the prospects of selling the property in the future.

My advice for buyers: even if you are buying with cash, make sure that the property has building regulation compliance certs – not having them will affect your future ability to sell.

4) Housing that lacks or fails to comply with planning permission.  We do not know how many houses were built/extended in the bubble without planning permission, though we know it did happen.  It could be calculated by cross-referencing properties built over the past decade or so (using geodirectory) with local authority planning files.  Unlike building regulations certs, planning permission can be regularised after seven years through retention.  The question that lurks at the back of my mind is, if the person who built the property deliberately did not comply with the planning system, what other corners have they cut with regards to build quality, standards and compliance?

My advice to buyers: make sure the property, including garages, etc, comply with planning permission.  If they do not comply and the property is over seven years old, then make the present residents get compliance before completing the sale.  If the property is less than seven years old, then seriously consider your position (the mortgage lender might well make the decision for you).  Make sure that no other corners, as per above, have been cut.

5) The location vis-a-vis public services.  This issue has no legal consequences, but is important for quality of life and future prospects of sale.  Most development in the bubble preceded public services such as schools, doctors, playgrounds, creches, public transport, etc.  In many cases the crash occurred before they could be put in place.  Given the perilious state of the Irish economy, there are questions as to when they are going to materialize any time soon.  Some people will little care about these things, but if you have children local services might be an important consideration.  If these services are missing, it may well make the property more difficult to sell in the future.

My advice to buyers: do a thorough scoping of the local area and the services you think you’ll need to use.  Take a look at local area plans (see myplan.ie) and take a look at local newspapers to get a sense of what is likely to happen in an area.

Another issue to consider, which has been extensively covered in the media is levels of oversupply.  It is clear that some parts of the country has more oversupply than others.  The alignment of supply and demand is a fundamental aspect of prices.  Oversupply might mean that as a buyer you can get a great price for a property.  It might also mean it’ll be more difficult to sell that property in the future.  Again, it would be useful to research this issue to get a sense of the future trajectory of property locally.  Our AIRO mapping tools, such as VacantIreland, might be useful for that.

Buying a home is the most expensive single purchase you’ll ever make. There are a number of issues that are coming to light after the bubble and bust that home buyers need to be aware of and to take into consideration when evaluating potential purchases.  It is worth taking the time to research thoroughly what and where you are buying and it pays to hire professionals to give you advice.  Their expertise might be an additional cost, but they could save you an absolute fortune and the misery of living with the consequences of the issues detailed above.

Rob Kitchin

There was an article in Tuesday’s Irish Times concerning the land aggregation scheme run by the Department of Environment. To date, 47 sites with a loan book of €110 million has been transferred to the Housing and Sustainable Communities Agency, which has responsibility for the management and maintenance of the land.  There have been 115 sites submitted, with loan debts of €260 million and interest accruing.  The local authorities can only redeem the loans if they have fallen due for repayment, and local authorities have housing loans totalling €499.5 million which could possibly all transfer at when the loans mature.  Nearly all loans are for more than was originally paid due to interest payments.  For example, Fingal County Council owed c.€26.5 million for a 24-hectare plot near Balbriggan, originally bought in 2000 for c.€19 million (one wonders why it didn’t manage to use it between 2000-2007 given it was gaining interest every year, they had a very rapidly growing population, and there was a pressing need for affordable and social housing).

This land, and the land in NAMA, represents the best opportunity the State has had, probably in its history, to create a national land bank.  Such a land bank would enable the state to control at a reasonable cost the provision of land for key developments such as social and affordable housing, schools, hospitals, play areas, community facilities, transport routes and so on.  Because there has been no carry forward costs to holding land (such as property tax), and the recommendations of the Kenny Report were never implemented, the state has been held to ransom by land speculators for development.  As a result, land costs have been a significant percentage of overall cost in state-led development, for example, in road building programmes.

And because the land is only in the hands of two agencies, it should be relatively straightforward to consolidate and coordinate.  The Irish Times piece suggests that this might be occurring to a certain extent: “The agency [HSCA] will consult the National Asset Management Agency to determine the best use of all land banks controlled or owned by the State. In some cases, Nama may advise that lands originally bought by private developers could be combined with adjacent lands bought by local authorities, for better returns. It is also possible that some of the land will be used for social housing in the future, the department has said.”  I have three concerns, however, with present arrangements and practices.

The first is that I do not believe that either HSCA or NAMA have either the mandate or requiste staff with the required skill set to determine the best use for land banks.  Long term spatial planning is not in the remit of either agency and yet they are being asked to manage a key component necessary for it.  How exactly are they making decisions about ‘best use’ of land banks?  How is this evaluated?  Against what criteria?  In consultation with whom?  NAMA has one full-time planner and a planning committee that includes three planners.  All very experienced, but this task requires an interagency team of experts with regional/national spatial planning knowledge working on it in a concerted fashion inconjunction with the regional and local authorities.  HSCA similarly does not have the in-house expertise.

Second, long term landbanking requires long term planning.  In the Netherlands, who have built up a considerable land bank and use it to good effect, they have long term spatial masterplans that detail anticipated development over the next 30-40 years.  They have worked out in principal where they want to concentrate population, build transport infrastructure, place industry, retail, utilities, schools, hospitals, services, etc under different demographic scenarios and organised land accordingly.  We have no such masterplan.  We have a broad spatial strategy that has no specifics and 400 generally uncoordinated local and county development plans administered by 88 planning authorities.  Making long-term land banking decisions means have a good sense of what development land the various parts of the state are going to require well into the future.

Third, that the need for a return in the short-term in order to reduce state overhead will mean that the land will be sold back to private developers at a massively discounted price (75-98%) of its value in 2007 or the amount it cost the state.  In the future we will need to buy this land back at market prices which will be much more than it is now.  The result will be speculators making a fast buck at the taxpayer expense, and in the absence of proper property tax will have little overhead for doing so.  This will be a disaster for the tax payer, especially given the opportunity we presently have.

In my view, NAMA and HSCA should produce (1) a public strategy document on how it proposes to manage the land bank it presently has, (2) should then put in place the structures needed to implement this strategy which is properly resourced and staffed.  To make decisions about land banking in the absence of such a strategy, with no public oversight or public knowledge as to what is planned (or rather not planned) is shortsighted and foolish and will lead to costly mistakes being made.  We have a unique opportunity to make long term gains through land banking, let’s not waste that opportunity by not managing it properly and frittering it away.

Rob Kitchin

We first posted on possibility of a Chinese trading hub in Athlone in Nov 2010, noting how the idea for the development managed to achieve some momentum through political networks.  Interestingly, those networks were predominately Fianna Fail-centric and reeked of the ‘Galway tent’ mode of doing business, but are now a lot of less potent.  Yesterday An Bord Pleanala gave planning permission for the first phase of the development – to include three major exhibition halls, nine minor ones and other facilities totalling 102,348sq m (1.1 million sq ft), as well as underground parking for more than 1,300 cars.  There are a number of questions that the proposed development raises.

How big is the development?

Very big.  The site is 337 acres.  An Taisce estimates that development once complete will be 14 times the combined size of Liffey Valley and Blanchardstown shopping centres.  It aims to attract 1.5 million international buyers and visitors annually when fully completed and employ up to 9,000 people.  It would be one of the largest exhibition spaces in Europe.  The main issue with regards to this size will be servicing – adequate utility and transport infrastructure to ensure smooth running; this is feasible with good planning though there are some site issues as discussed below.

Does it align with spatial planning policy?

Yes.  Athlone is a gateway town in the National Spatial Strategy.  This means it is designated as a preferred site for population growth and economic investment.

Will it happen?

The key issues here are finance, political and state backing, other local development, and external competition.  If the project is going to be backed purely by Chinese capital looking for a spatial fix in Europe then the project is solely dependent on that finance being made available to fund the development.  This seems, however, to be unlikely.  Private investment is going to want to leverage finance and resources from the local and national state through in-kind provision of infrastructure and state aid to companies via IDA and others as with other FDI-backed ventures.  The state, and its various agencies then, is going to need to decide whether it wants to provide matching monies to help seed the larger investment.  Clearly local agencies are already backing the project with some resourcing.  The developers are also likely to need other private investors to spread the risk and its not clear if such investors have already signed up or will need to be found.

Beyond the project site itself, as an international trading hub transport infrastructure is going to be key.  Athlone is some distance from the two main international airports, Dublin and Shannon, and the travel to the site by coach/rail is a hindering factor for both the visitors and goods.  The solution proposed locally, as we posted about previously, is the development of an airport near to Athlone.  This has already been granted ‘strategic infrastructure’ status by An Bord Pleanala in Sept 2010.  The same questions about finance and state backing arise with respect to this project, but the two developments do seem co-dependent.

There are other competing locations for such a Chinese trading hub, with other sites being explored in Britain and continental Europe.  It is unlikely that there will be multiple such dedicated sites, so the consortium is going to have to convince investors that Athlone is the best location.

Is it the right location?

Athlone is a gateway town and it would be a fantastic development for the area if it happens.  However, location and particularly transport connections are an issue.  In a European context, Ireland is on the periphery of the continent and is dependent on air/sea for travel.  Whilst other FDI has been able to thrive here with such dependencies, these companies are not solely reliant on massive, daily international flows of visitors and goods.  That’s one of the reasons we do not already have a large, thriving, international exhibition sector. In an Irish context, it would make sense to locate the site nearer to already existing air/sea infrastructure.  The obvious location would be Limerick/Shannon/Ennis where there is already an established international airport and sea port for container shipping.  Clearly this will not suit the Athlone backers, but might be a determinate as to whether investors think the scheme is viable.

In my opinion, the Athlone project is largely a Field of Dreams idea that has managed to gain some momentum.  Whether it materialises into the development envisaged is certainly not assured and there is a long way to go to make the dream a reality.

Rob Kitchin

 

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