Yesterday the Irish Times published a short piece of commentary written by me to accompany a map of housing vacancy and unfinished estates, as part of the AIRO Pictures of Ireland series. I’d originally submitted a slightly longer piece, which got cut by fifty percent due to space considerations. Here is the full text to accompany the map.
As early as 2006, David McWilliams had coined the term ‘ghost estates’ for the dozens of unfinished developments visible on any trip across Ireland. As the crisis deepened, unfinished estates became a symbolic and tangible marker of the excesses and follies of the property bubble. In every village and town in the country were half-built houses and apartments, where the developer had ceased work or where units were unoccupied.
In short, too many housing units had been built for demand, the problem compounded by development finance evaporating.
The families who had bought and moved into what became unfinished estates were left trapped on them, facing a number of related problems. These included living on or next to building sites and their associated health and safety issues, a lack of services and infrastructure, negative equity, anti-social behaviour, and a diminished sense of place and community.
Move forward to 2013 and very little has changed. Unfinished estates still litter the Irish landscape, the people living on them face many of the same problems they did in 2006, and there is still a large oversupply of residential property in many areas of the country.
To date, the Department of Environment, Community and Local Government (DECLG) has undertaken three National Housing Surveys to monitor unfinished developments. In the first survey, conducted in 2010, the number of unfinished estates were reported as 2,846, rising to 2,876 in 2011. They were present in large numbers in every county in the country, but were particularly prevalent in the Upper Shannon area of Cavan, Longford, Leitrim, Roscommon and Sligo, the result of the tax-incentivised development.
In 2012, the DECLG reported that the number of unfinished estates had fallen to 1,770. Unfortunately, the fall in numbers is principally because the definition of what constitutes an unfinished estate was changed. The definition used in 2010 and 2011 refers to estates that have issues of vacancy and oversupply as well as outstanding development work. In 2012 the definition refers only to the latter.
The map shows the distribution of the 1,770 estates with outstanding development work (black dots; see below). The shading is the level of residential vacancy as reported in the 2011 Census, where dark red is over 25 percent vacancy.
In total, the Census revealed that there were 289,451 vacant properties (14.5% of total stock) in April 2011. Of these 59,395 were classed as holiday homes. In any ordinary housing market, approximately six percent of properties would be expected to be vacant (120,000 in the Irish case), meaning that oversupply is about 110,000. There are also 17,032 units still under-construction according to the DECLG 2012 survey, excluding one-off sites.
To try and tackle the issues facing unfinished estates, the government set up two schemes. The first, the social housing leasing initiative has sought to make some properties available for social housing. The second, site resolution plans, are designed to tackle health and safety issues arising from incomplete or poor construction, with a fund of €5m administered by DECLG. The former has had little take up and the latter has had little effect beyond fencing off dangerous areas and filling in potholes.
Most worryingly, the DECLG acknowledges that 1,100 of the estates are in a ‘seriously problematic condition’, yet only 250 estates (8.5% of 1,770) are active; that is, the developer is on site and undertaking construction. That means that 1,520 of the estates that require development work have been abandoned to their fate.
Given that their developers have gone bust they are not likely to move towards completion in the short to mid-term. In other words, several years after the crisis started, families are still living on developments that are substandard, with huge negative equity that locks them in.
In November, the Housing and Planning Minister, Jan O’Sullivan, announced that decisions would be taken in early 2013 to establish which estates are commercially unviable and need to have parts of them demolished. Regardless of whether this happens or not, the unfinished estates issue does not seem set to be resolved for a number of years to come.