April 2014


The various crises in housing in Ireland has been a constant focus of the media since the start of the crash.

First, it was plunging house prices, developers going bust, construction workers losing their jobs, and the collapsing of PPPs.

Then it was NAMA, vacancy, unfinished estates, pyrite-infected homes, Priory Hall and other poorly built estates, negative equity, and mortgage arrears.

Now it is rising rents, rising prices in Dublin, a shortage of homes in some locations, social housing waiting lists, rising homelessness, and probably from this summer on increasing numbers of repossessions.

Since 2007, all elements of housing, in all parts of the country, have been in crisis. For seven years we have effectively had no housing policy, no housing reforms, and no strong, proactive management designed to address the various problems. Rather, the government’s strategy under both the last regime and the present has been to tinker round the edges — site resolution plans, social and housing leasing initiative, a pyrite committee, minor reform to the Planning and Development Act, etc. None of it in a coordinated, holistic way.

With the exception of putting millions into NAMA to look after the banker and developer interests in an effort to try and salvage something from the disastrous bank guarantee , these are all low cost, minimal effort tactics to give the impression of doing something, but actually toothless and spineless and making very little difference on the ground. They were shamed into sorting of the mess relating to Priory Hall residents.

There has been no substantive investment in tackling various issues such as the 89,872 on the social housing waiting list, or the 96,474 in 90+ days in mortgage arrears, or rising homelessness. Investing in housing has not even to date been seen as a means of tackling two birds with one stone — creating jobs/investment in business and addressing various housing crises. Instead there has been massive disinvestment. For example, since 2008, the capital expenditure for social housing has been reduced by 80% (from €1.3bn to €275m) while there has been a 90% decrease in housing output from local authorities between 2007 and 2011.

The strategy in effect has been to try and muddle through to such times as the private sector and the market return to sort things out. At which point any state investment will be targeted at reviving market interests, with social housing continuing to be supplied through private development and rental supplement. In 2010, 97,260 families received rent supplement allowance to enable them to live in private rental stock due to a lack of social housing at a cost to the state of over €500 million per annum. In whose interest is such a policy? It is difficult to argue, unless you are a vested private interest, that it is the state’s or taxpayers’.

We will continue to have housing problems for a good number of years, especially in the absence of any holistic strategy and set of policies designed to try and coordinate and regulate development and how all aspects of the housing sector functions. That strategy needs to see good, affordable housing as a right; to see housing as homes rather than simply assets and investment vehicles. And it needs to get value for money for the state in terms of private services rendered.

That’s not to deny market interests’ profit, but that this profit is reasonable without being exploitative and does not rip-off both tenants and the state. Much of continental Europe manages to do this. Ireland, however, has swallowed the neoliberal mantra hook, line and sinker, and seven years of crisis has not led to any kind of re-think or change in vision or policy.

As the market returns and house and rental prices rise, in the absence of checks-and-balances such as rental control and adequate supply, affordability and the need for social housing and homelessness will increasingly become an issue, especially if local authorities remain emancipated of resources.

House prices turning and rents rising does not mean that that various problems of housing in Ireland are soon to be solved.  They signal the arrival of the next wave of issues.  Expect on-going housing crises for the foreseeable future.

Rob Kitchin

The ESRI, in its recent Quarterly Economic Commentary (Spring 2014), suggests that the impact of the patent cliff in 2014 will be much smaller than in 2012 and 2013. In this post I present data that support such a position. I believe that the greatest impact of the patent cliff on Ireland will have occurred in the period from 2012 to 2014. I base this on a simple inspection of the expiration data related to blockbuster drugs produced by multinational companies which have Irish plants.

Before presenting the facts, I provide the usual health warning – there are great uncertainties involved in estimating the effect of the patent cliff on the Irish economy. Most estimates are partly based on an analysis of the specific products losing patent protection and their global revenues. Relatively good data on patent expiry dates and global revenues is publically available. This data can then be linked to the companies operating in Ireland. Based on primary interview data and newspaper analysis, one can get a fair idea about which of the blockbuster drugs coming off patent are at least partially produced in Ireland. This allows us to get some idea as the size of the impact of the patent cliff on exports and GDP.

There are, however, a number of uncertainties. Firstly, although we have good data on when blockbuster drugs are due to come off patent, not all of these drugs actually lose patent protection on the due date. Drug companies do what they can to protect their valuable intellectual property. Most will try to obtain an extension of their patent and some are successful. The granting of one or two patent extensions can seriously alter the impact of the patent cliff on a particular country.

Secondly, even greater uncertainties are involved in estimating Ireland’s share in the global production of a particular drug. Pharmaceutical companies typically operate multiple sites for the production of active pharmaceutical ingredients and drug products. In some cases nearly 100% of the global supply is produced in Ireland, but in most cases we have no information about what share of production is accounted for by plants in Ireland. In most cases the only information we have is that part of the global production takes place in plants in Ireland.

Table 1 presents the blockbuster patent expirations relevant to Irish plants during the period from 2011 to 2016 (data on the involvement of Irish plants is based on interviews and Internet search). The methodology provides no guarantee that all involvement of Irish plants is identified. However the pattern is clear enough to support my main argument.

Table 1. Blockbusters coming off patent* and involvement of Irish plants

Table 1

The data clearly show that patent expirations relevant to Ireland were concentrated in the period 2011-2012. Six blockbuster drugs whose patents expired, with a global sales value of $35bn, were at least partly produced in Ireland (Enbrel’s patent for the USA was extended). Because of the six-month ‘exclusivity period’, during which only one generics company is allowed to enter the market, the full effect on output will only be felt a half year after the expiration date. In addition, the table presents the expiration dates for the USA. In other markets, the drugs developed by US companies tend to come off patent somewhat later. This phenomenon is clearly illustrated in Table 2 which shows that the full effect of the Lipitor patent expiration in the US at the end of 2011, is only reflected in the 2013 global export figures of Ireland. I therefore suggest that the effect of the 2011-2012 cohort (in Table 1) will be fully expressed in the 2012-2014 export and output data.

Table 2. Pharmaceutical Exports (SITC 51 and 54)

Tab2

The blockbusters that are losing patent protection in the 2013 to 2014 period have far smaller combined global sales ($25bn over the three year period) and, crucially, the data suggest that few of these drugs are manufactured in Ireland. I could only find evidence for one drug, Nameda, a relatively small blockbuster with $1.4bn global sales, coming off patent in 2015. These data suggest that in 2014 we will have passed the peak of the direct impact of the patent cliff on the Irish economy.

This post is based on extracts from my discussion of a paper by Mary Dalton and Shane Enright (Dept. of Finance). “The Impact of the Patent Cliff on Pharma-Chem Output in Ireland”, presented at The Statistical and Social Inquiry Society of Ireland, Dublin: Royal Irish Academy, 6 March 2014.

Chris.vanegeraat@nuim.ie

 

 

 

 

 

 

 

 

 

 

 

Next week Irish planners will meet for their annual conference in Limerick. It is interesting to see that Professor Louis Albrechts will give a keynote speech and which will presumably pick up on the subject of his 2010 paper entitled: More of the same is not enough! How could strategic spatial planning be instrumental in dealing with the challenges ahead?. In this paper, Albrechts coincidentally touches on many of the same themes that I blogged about last year (see here and here). He makes the case that the environmental crisis, the energy crisis, the financial crisis and the subsequent economic crisis, to name only a few of the interlinked crises of our times (to which I would specifically add the inequality crisis), must compel decision makers, planners, institutions, and citizens out of their comfort zones, to confront their key beliefs, to challenge conventional wisdom and to embed a future-orientated perspective in their practice.

However, it seems that the Irish planning profession is still reluctant to give up on the status quo just yet and more of the same is good enough for the time being. This year’s conference is entitled50 Years of Planning: Time to Lead Change and Plan for Growthwhile that of last year’s was ‘Achieving Competitiveness & Promoting Innovation – The Future Role of Planning’ . All of the neoliberal buzzwords in just two conferences! This is not an academic irrelevance, nor a trivial observation, but is entirely symptomatic of how firmly co-opted the Irish planning profession has become in the governance machinery of the current economic hegemony. These are the implicit values which shape the spatial outcomes of the planning process and which are evident everywhere – from the over-dominance of the Greater Dublin Area, to the disintegration of our town centres, to the empty shells of vacant retail units. What is remarkable is that this post-political consensus seems to hold true universally throughout the profession to the point of being almost invisible and entirely unquestioned. Without applying a critical perspective of this sort, we cannot even begin to understand the dynamics that led to the catastrophe of the Celtic tiger, and planning’s key role therein, or even to plot a course for planning’s future role in society.

Like Albrechts, I agree that it should be unthinkable (and unacceptable) that planners remain as neutral observers and refrain from playing an active role in the construction of future visions of society and to build the case as to why society should try to construct these futures. After all, isn’t this the very raison d’etre of planning? However, as much of this process lies in making tough decisions about what is most important, it inevitably involves values and making these values explicit. As Albrechts notes, the current reluctance of the planning profession to explore new concepts, new ideas and new values and to look for alternatives to business-as-usual is leading to the worst kind of myopia: that of a place blindly lumbering into the future unable to see the pitfalls ahead.

If we just take the looming climate and energy crisis, which is indisputably the most defining global challenge facing humanity of the 21st Century, there is more than ample evidence that the current entrepreneurial value discourse of growth and competitiveness are not just problematic but are actually driving the problem. The recent IPCC AR5 report, which explicitly references the important role of spatial planning in climate change mitigation and adaptation, should be a timely reminder to the profession of the absolute urgency of exploring what values are needed to adequately plan for the challenges and opportunities ahead. However, as planning in Ireland seems keen to continually justify its existence within the myopic parameters of the neoliberal orthodoxy, I do not hold out much hope for the type of planning that can embed the necessary transformative practices which Albrechts argues so convincingly for.

Gavin Daly

The IPI conference will include a Panel Debate – “If planning is everything, maybe it’s nothing” – The next 50 years

Chair:

  • Frank McDonald, The Irish Times

Panel:

  • Conor Skehan, School of Spatial Planning, DIT
  • Ian Lumley, An Taisce
  • Niall Cussen MIPI, Department of the Environment,    Community & Local Government
  • Mary Kelly, Chairperson, An Bord Pleanála
  • Brendan O’Sullivan MIPI, Centre for Planning Education  & Research UCC

 

'Disneyfication'? Sources close to the plan have denied any connection between Frackaballooning and the film 'Up'

‘Disneyfication’? Sources close to the plan have denied any connection between Frackaballooning and the film ‘Up’

Plans were today unveiled for the sale of a large amount of Dublin. This includes the discussed sale of Foxrock to Los Angeles, Rathmines and Phibsborough to London, and the Liberties to New York. The proposal, which entails air-lifting large swathes of land, is being made possible by methods similar to fracking in combination with hot-air balloon technology. Many in the industry are referring to the method as ‘Frackaballooning’.

A spokesperson for NEGEQT-RealEstate stated that the appeal of this approach was because of the perception internationally of good value in the Dublin market at present and also cited a number of other positives to the plan: “First and foremost, it allows us to get building again and presents a very real opportunity to open up more land for much-needed market-driven housing, particularly in Dublin. In fact, with this new technology, we can now sell the city over and over again. At the moment everyone wants three bedroom houses so we will provide that. In the future those demands might change, so we will just repeat the process but provide something else. Finally, it ensures that we reach our emigration quota each year, while allowing people to remain in their homes and maintain a direct connection to Irish soil. It really is very exciting and very sustainable too.”

Given their respective prime locations, Foxrock and Sutton are perhaps two of the most noteworthy of the sites included in the plan. One well-known journalist commented that it was a logical step: “with their sale to Los Angeles, those living in Foxrock and Sutton will still have lots of open space and a similar commute time, but will get a lot more sun.” The auctions are being held by a firm new to the Irish market, called FLAIR, who are specialists in Frackaballooning-driven sales. One representative commented on how the bidding at their first auction had been frantic: “It has been great really. Welwyn Garden City and Letchworth were engaged in a bidding war to buy Mount Merrion, only to be gazumped by a phone-bid from Ebbsfleet.” But word is that the level of interest in the technique reaches far beyond the neighbourhood/village scale. It is believed that a number of FRITS (Frackaballooning Investment Trusts) are interested in entering the Irish market in the coming months. Some sources believe that within five years Dublin could be in the top ten global destinations for Frackaballooning. All indications show that this will have a trickle-down effect and allow the gradual sale of most of the country: ‘Well we are starting in Dublin because that is where there is most demand, but I could definitely envisage the sale of Eyre Square as a very real possibility in the future’.

Perhaps the most exciting part of the initiative is the sale of the majority of Georgian Dublin. This is seen as a win-win for both Chaing Mai, who get a new theme-park/film-set and for Dublin to correct the wrongs of its Georgian ancestors. A representative of the Mock-Georgian Appreciation Group, who have single-handedly championed the cause of late 20th Century faux-Georgian architecture for nearly four decades, commented: “really, the wealthy elite of the 17th and 18th centuries didn’t have the wealthy of today in mind. Therefore, the sale of Georgian Dublin, and its replacement with fake-Georgiana, presents the possibility to right their wrongs in terms of both the social environment and the physical context. None of the wealthy in Dublin want to live in Georgian Dublin, so they must really dislike Georgian buildings. We must assume that they prefer faux-Georgian architecture.” The social goals are being promoted through the incorporation of smart technology, which sees a new force-field placed around the entirety of Georgian Dublin so as to preserve it for the wealthy and well-to-do for eternity.

Meanwhile, the newly laid out Faux-Georgian Mile will seek to reflect the dignity and grandeur of the planned ESB replacement, which, based on a recent competition, is to be a relocated Fitzwilliam Hall. The gap left by the removal of Fitzwilliam Hall from its original location will be a replica of the current ESB headquarters building, albeit shrunk to fit the site. As a means of reflecting the inter-subjectivity of the two buildings, they will swap facades for a period of two hours per day at rush-hour. The Faux-Georgian Mile plan has, however, not been without its detractors. A small group have already demanded the reconstruction of the ESB Headquarters according to the original 1964 specifications, while another group have demanded the preservation of the original, including the removal of the boom-time pink paint. There have also been rumours of a student sit-in, but according to a number of sources there was too much wrangling between those desiring retention of the original and those in favour of a reproduction.

The creation of more vacant space also creates the potential for a strong cultural component. One well-known cultural commentator stated that as part of the plan each area of Dublin that is to be sold off will be recreated on a scale cardboard cut-out model and placed at the centre of a new pop-up park that is to be located on the former site of Kilmainham Hospital, which is being sold to Canada. This is so as to promote discussion about the relationship between Frackaballooning and society.

Aside from the modernist heritage enthusiasts, Frackaballooning has only had a few objections, most of it from ‘activists’. But, as one commentator stated: “We don’t have time for these objections. We have had a thorough public engagement process with those in the industry and others in favour of the process. We can’t allow a few nay-sayers stop progress. We must allow the market to plan our future and this is the most advanced way of making that possible”.

Whatever the detractors say, there is no doubting the ambition and bold vision of the approach. This is exactly the sort of blue-sky thinking that Dublin and the rest of the country needs. After all, hot-air and the sale of land are the twin pillars of sustainable planning.

A. P. Rilfirst