Willie Penrose T.D., Minister for Planning and Housing, published two documents through the Department of Environment, Community and Local Government today relating to unfinished estates.
The first is ‘Resolving Ireland’s Unfinished Housing Developments: Report of the Advisory Group on Unfinished Housing Developments‘, which sets out the various issues relating to unfinished estates and makes various recommendations with respect to addressing these issues. It extends the Advisory Board’s draft report published back in February.
The second is the Department’s response: ‘Resolving Unfinished Housing Developments: Response to the Advisory Group on Unfinished Housing Developments‘. This sets out four strategic aims for the next twelve months (developing a coordinated partnership approach to unfinished estates; tackling issues of public safety; putting in place stronger legislation/policy frameworks to tackle issues; building confidence in the housing market) and a number of action points for the Department and related agencies.
There are two other associated documents that have yet to be published – the manual on how to tackle in practical terms the issues related to unfinished estates (which will be an updated version of the draft manual published in Dec 2010) and the code of practice. These are due shortly and will give more specific information for developers, local authorities and other stakeholders.
The Department’s response piece is, in my view, the more important document because it commits the DECLG to 20 actions set out in relation to five themes. The most important of these are the development of Site Resolution Plans (SRPs) that will involve a partnership approach to estate completion, whereby all stakeholders (developers, banks, local authorities, residents, estate management companies, Health and Safety Authority, etc) will meet to negotiate a plan of action on an estate by estate basis. The action points in summary are:
Coordination and Partnership
1. A National Co-ordination Team on Unfinished Housing Developments, under the chair of the Minister, will drive the implementation process, with a particular focus on resolving sites.
2. City and County Councils will each establish Unfinished Housing Development Teams to co-ordinate actions at a local level and to provide regular reports to the National Co-ordination Team.
3. A Code of Practice on issues such as public safety, the site resolution plan process, information exchange and identification of development solutions will be finalised by the National Co-ordination Team to ensure buy-in by developers, site owners, funders, local authorities and residents.
4. In cases where the relevant loans / securities fall within their remit, NAMA will work with local authorities, developers and/or receivers and the Department in facilitating early resolution of public safety issues and in co-operating with the other stakeholders in agreeing and implementing Site Resolution Plans, where feasible and appropriate.
5. The Minister will engage with other financial institutions (both domestic and non-domestic banks) to ensure a full understanding of their statutory responsibilities and to secure their co-operation and engagement with local authorities and developers in addressing public safety issues and in agreeing and implementing Site Resolution Plans.
6. An Information Pack for local residents in unfinished housing developments will be prepared and published by the Housing and Sustainable Communities Agency.
7. Guidance will be issued to City and County Development Boards on encouraging and facilitating community involvement in resolving unfinished housing developments.
8. A best practice Guidance Manual on Managing and Resolving Unfinished Housing Developments on unfinished housing developments will provide practical guidance for local authorities and other stakeholders on how to manage unfinished housing developments
Public Safety
9. Local authorities will complete their own initial categorisation of unfinished housing sites in line with the four categories identified in the Advisory Group’s Report and will monitor the developments in their areas, updating regularly the National Co-ordination Team on the status of housing developments in their area.
10. The Department will expedite the approval of applications for funding support from the €5 million public safety initiative funding with the first allocations to be made in June 2011.
11. Local authorities and the Health and Safety Authority will continue to liaise and engage in monitoring incomplete sites and any resolution activities being undertaken either by the developer or local authority.
12. The Department will provide ongoing technical assistance to local authorities on the categorisation of developments, on the formulation of an initial site response using the funding at 10) above, on the preparation of Site Resolution Plans, as well as planning and building control queries.
Site Resolution Plans
13. City and County Unfinished Housing Development Teams will identify priority sites that should be the subject of Site Resolution Plans and will work with site owners, developers, funders and residents in their efforts to develop such plans, reporting to the National Co-ordination Team, with a view to ensuring that 300 Site Resolution Plans are in place by end 2011.
14. City and County Unfinished Housing Development Teams will develop best practice approaches to the re-use of vacant housing in each of their areas by the end of 2011.
Legislative and Policy Framework
15. The Department will immediately review existing legislation as identified by the Advisory Group and develop any necessary amendments to the legislation to ensure that there are adequate powers available to address the efficient resolution of unfinished housing developments
16. The Department will review taking-in-charge standards for public infrastructure within housing developments such as roads, public lighting and piped services with a view to making recommendations on how best to develop national standards.
17. The Report of the Advisory Group will be referred to the Building Standards Compliance Group for its analysis and response.
Housing Market and Planning Supports
18. The Department will re-state previous planning guidance to planning authorities on specific policy aspects regarding better phasing of development, the provision of bonds / securities and other DECLG policies as regards sequential and phased development to inform the resolution of unfinished housing.
19. The Department, working alongside local authorities and voluntary housing bodies, will engage actively with developers and site owners, including NAMA, in seeking to ensure positive uses for vacant complete and near complete housing and in line with the achievement of sustainable communities and balanced tenure of housing developments.
20. The Housing and Sustainable Communities Agency will undertake an examination of the potential role for self-build and equity partnership type models to enable residents and new investors to assist in resolving unfinished components of housing developments.
What is good is that the DECLG have now appraised the situation and set out a set of action points. It is particularly good to see a National Coordination Team being put in place and that legislation is going to be reviewed with a view to putting SRPs on a statuary basis and make amendments to existing legislation to aid their implementation. I do, however, still have a number of concerns.
First, the speed of response. We are four years into the housing crash and the development of the unfinished estates phenomenon. It has taken 15 odd months to get from the announcement of a survey to a report and yet a lot of these action points are still at the reviewing and assessment/formulating solutions stage. In the meantime, lots of people are living with a whole series of issues, many of them concerning health and safety. The latter has been an supposedly urgent action point for quite some time. It is true that some local authorities and developers/receivers have already moved to address some of these issues, but it is only now that the first €1.5m of funding is being released to LAs to tackle issues on the worst 230 identified estates. The aim is to have 300 SRPs in place by the end of the year. That is 10.5% of all estates (2,846) or on average 9 per local authority. It’s not clear also whether that is 300 SRPs drawn up or actually in the process of being implemented. We need to get to the implementation phase across all estates sooner rather than later.
Second, finance. Finishing off estates and addressing their various issues is going to cost money. There are 1,655 estates with works outstanding. At present, there seems to be four possible sources of funding: developer bonds; the DECLG through its €5m public safety fund; NAMA and its development fund; developers/banks who own the estate or possible new investors. There seem to be massive issues in drawing bonds down and if they can be accessed they are often insufficient to complete outstanding works. The DECLG €5m split across 1,655 estates is €3200 per estate, which will hardly scratch the surface; NAMA will only invest in estates that are commercially viable and for which they hold the loan book; developers are bust and banks illiquid. It really isn’t clear to me where the finance is going to come from for either developers or local authorities (where developers are absent) to finish off estates without central government funds being made available (and no such fund was announced today beyond the €5m). One suggested solution is to recoup the costs from future sales, but again this would only work if an estate is commercial viable, investors come in, and market conditions improve in the short to medium term. I would like to know a lot more about plans with respect to financing and I’m sure stakeholders would as well.
Third, I am still concerned that the model for SRPs is one of partnership and has the feel of voluntarism about it. SRPs seek to encourage and not compel developers and stakeholders. The two documents today are full of phrases like ‘encouraged to work’ and ‘should undertake’ rather than be ‘compelled to work’ and ‘will undertake.’ Without the new full manual it is difficult to fully comment on this, but it also still seems as if there is no conflict resolution mechanisms or clearly delineated objectives, milestones and timeframes for SRPs. The danger is that negotiations become divisive and fractious and implementation effectively gets kicked down the road. The role of the National Coordination Team is also not clear. It seems to have some monitoring function, but its not clear if it’ll be hands on in terms of overseeing, assessing and directing progress and what it’ll do if SRPs are failing.
The next stage is clearly the publication of manual and the code of practice. Hopefully they will turn up soon. Today’s report and the DECLG’s response is a step in the right direction, but whether the action points and strategy being pursued will deliver, or deliver significant improvements for residents any time soon, is still an open question.
Rob Kitchin
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November 29, 2012
Statistical solutions to the unfinished estates problem
Posted by irelandafternama under #Commentaries | Tags: creativity, Data, DECLG, Ireland, statistics, unfinished estates |[7] Comments
Yesterday Minister Jan O’Sullivan published the 2012 National Housing Development Survey. The headline story from this is that the number of estates categorised as unfinished has fallen from 2,876 in 2011 to 1,770 in 2012, and that decisions will be taken in the new year on which estates are commercially unviable and need to have parts of them demolished (especially in the midlands and border region).
Along with the report, the Department of Environment also published the data they used in the report in three separate files comparing counties, profiling individual counties, and profiling individual estates.
So, have the number of unfinished estates fallen by 1,106 and is the problem of unfinished estates receding?
Technically, yes. But this is where I link to the title of this post. The drop is principally because the DECLG have changed the definition of an unfinished estate. The definition used in 2010 and 2011 refers to estates that have issues of vacancy and oversupply as well as outstanding development works. In 2012 the definition refers only to estates where there is outstanding development work. At one level, this change makes sense. The 1,770 estates that need development work are the most problematic. At the same time, the issue of vacancy and oversupply has not gone away, affect the overall market, and have consequence re. anti-social behaviour, sense of place and community, etc. Indeed, on the old definition the number of estates surveyed rose in 2012 to 2,973.
This is not the only bit of being creative with the numbers. Oddly, the figures both work for and against the government.
For the government
Overall occupancy: the overall level of occupancy in unfinished is reported as 91,692 – this is occupancy across the 2,973 estates surveyed not the 1,770 we’re told now constitute unfinished estates. It is useful to have the data for the 2,973 estates but it also needs to be reported specifically for the 1,770.
Complete and vacant units: the overall level of vacancy is reported as 16,881, down from 18,638 in 2011 – again this is refers to the 2,973 estates surveyed.
Vacancy per county: the report provides a table and map of vacancy per 1,000 households for each county. This actually refers to vacancy in unfinished estates, not overall residential vacancy in a county. Making sense of vacancy in unfinished estates needs to be contextualised with respect to overall vacancy and oversupply, not simply the number of households. The housing market is not simply unfinished estates and the data as presented is misleading.
Against the government
Services: In the comparing counties data file the reported figures for services are all shockingly bad. Across the 2,973 estates (again there is no specific data for the 1,770) 57% of units have incomplete roads, 40.1% have incomplete paths, 42.5% have no lighting, 41.1% have no potable (drinking) water, 39.3% have no storm water drainage, 41.3% have no water waste (sewage), with 91,693 families living on these estates. Actually these figures are grossly overstated because of how they are calculated and the numbers are much less. They have been calculated against all housing units that had original planning permission, not those that were started. There are two problems here. First, planning permission has expired for 24,864 units, second why calculate for units that don’t exist? The fact that 60,055 phantom houses don’t have potable water, and these are included in the rate of units that don’t have potable water, doesn’t make any sense. The rates are actually much smaller, though nonetheless are a significant problem on many estates.
What are my headline stories from the report?
I have two main observations from the report. The first is that 1,100 of the estates are in a ‘seriously problematic condition‘. Families in these estates are living on building sites. Second is that only 250 estates (8.5% of 1,770) are active – that is, the developer is on site and is undertaking works. In 2010 it was 429, in 2011 it was 244. That means that 1,520 of the estates that require development work are not in receipt of it and given that developers have gone bust they are not likely to receive it in the short to mid-term. The number of underconstruction units in 2011 was 17,872 and in 2012 it was 17,032. All but 38 of the reduction is ‘nearly complete’ units being fitted out. Anything half-built is staying half-built. In the vast majority of cases then, unfinished estates are being left to wither on the vine, the great majority of which are in a ‘seriously problematic condition’.
To be fair to Minister O’Sullivan she fully recognizes these issues. On the other hand, the actions of the government are painfully slow, some would say pathetic. As we’ve argued before, the policy of Site Resolution Plans (SRPs) is a minimal cost, minimal effort approach to unfinished estates that give the impression of policy-at-work, but is really a sticking plaster that tries to stop a problem getting worse before the ‘surgeon’ in the form of the market re-appears to fix things. In the present and foreseeable property market that ‘surgeon’ is not going to appear any time soon. In the meantime, families are left living on developments that are substandard with huge negative equity that locks them in.
Five years after the property crash started to plummet its time unfinished estates problem was tackled properly, rather than simply messing about with the numbers. That’s not to say the numbers are not important – we need to know what is going on (preferably with non-creative and meaningless data) – but what we really need is action for the families living on these estates.
Rob Kitchin
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