Unfinished Estates per 1000 Households

Number of inspected unfinished estates per county

 

It will come as little surprise to some IAN readers that I’ve been a long-term supporter of the National Spatial Strategy and what it seeks to achieve.  The NSS took a holistic, strategic and coordinated approach to large-scale, long-term planning of development, key infrastructure, resources, etc., across scales in Ireland.  When it was formulated, it explicitly recognised that policy relating to a whole series of sectors needed to be joined-up across departments and agencies, and across scales and places, and the kinds of growth that Ireland was experiencing had to take regard of the spatial structure of society and economy, rather than occurring serendipitously and with little regard for other initiatives or places, if we were to create sustainable and manageable patterns of growth (population, work, transport, services, etc needed to be coordinated and harmonised for efficiencies and effectiveness).  It should have formed the core guiding logic to the National Development Plans 2000-2006 and 2007-2013, and formed a contextual frame for just about all policy formulation that had a spatial dimension (which is just about everything).  Interestingly, it was heralded in Europe as the model to follow, and it has certainly been a key plank in building North-South cooperation around shared infrastructure and resources.

In its first eight years, however, whilst the NSS did make some progress, it was seriously hampered and undermined by a number of factors including:

  • central government largely ignoring it when formulating other policies (and even now, the NSS is not mentioned once in the Trading and Investing in a Smart Economy policy to create 300,000 new jobs)
  • decentralisation and other policies ran counter to it and actively undermined it, setting precedents for all other parties
  • funding from central government for large-scale, strategic investment for the public good was not tied explicitly to following its principles (addressed through the new Planning and Development (Amendment) Act 2010 – see today’s Irish Times)
  • local authorities were only required to have regard to it, rather than comply with it (again addressed through the Planning Act) and pushed ahead with unrealistic and overambitious localised growth strategies;
  • it came too late to be the guiding basis for NDP 2000-2006, and although it formed a core design rationale of NDP 2007-2013 the economic downturn has led to many core components being curtailed or cut

This has led to a number of problems, as noted by DEHLG itself, such as:

  • Population growth in some Gateways and Hub towns underperforming, whilst smaller settlements and rural areas within commuter belts have grown significantly;
  • Excessive and inappropriately located zonings and development worked against NSS implementation and undermined efficient exchequer investment in infrastructure and services;
  • Development-driven planning and commuter settlement patterns have created demand for uneconomic and inefficient infrastructure and service provision, while infrastructure and services in towns has become under-utilised;
  • Development has become more dispersed and fragmented geographically, with greater distances between where people live and work, leading to unsustainable oil dependency and reduced quality of life;
  • Dispersed land use trends are undermining the integrity of Ireland’s key habitats and ecosystem networks and placing pressure on the quality of our water resources.

The DEHLG has today published the NSS refresh, having undertaken a review of the NSS to date and its role in the future, especially given the economic downturn and the need for mid-to-long term strategic spatial planning to provide a coordinating framework for managing scarce resources and stimulating economic growth, recognising “that a well-rounded strategy for economic recovery cannot ignore the spatial structure of the economy”.  We had a boom that largely tried to ignore the space economy, especially in the construction sector, and look where that’s got us.

The danger with the refresh is that it will be once again largely ignored by departments beyond Environment and Transport, especially by Finance, rather than performing an important guiding role.  In my view that would be a major folly.  The NSS provides a holistic means to join up thinking across a range of sectors, so that we don’t fritter away what resources we still have in a piecemeal fashion.  We need a much more coordinated and strategic approach to managing inward investment, job creation, demographics, transport, services, etc. that matches up need and planning. This also means moving beyond a zero-sum game of development, and targeting investment into selected locations such as the gateways and hubs – which is where the rub will be for many people.  We can either go the route of spreading evenly and thinly, which will lead to everywhere being under-resourced and struggling, or we can concentrate and take advantage of agglomeration, critical mass and sustained growth.  The latter has to be the path we need to follow.

There are plenty of critics who will argue that the NSS has achieved very little over the past eight years and it’s an attempt at ‘Big Government’.  As noted above, it was never given the chance to perform the role it was designed for, and now more than ever we need a decent policy instrument to provide citizens and private business with a strategic plan and road map of state investment.  Now is the right time for it to be rolled out comprehensively and utilised.  That means it has to inform and guide policy thinking across departments and agencies.  If that fails to happen then it’ll simply limp along, and in my view, we’ll have lost an opportunity to help get the economy back on its feet.  And perhaps this makes me sound like a government spokesperson, but on the rare occasions where I think government policy makes sense then I think it’s worth saying so.

Rob Kitchin

In a speech last weekend, the Minister for the Department of Environment, Heritage and Local Government, John Gormley, attacked those councils still seeking to zone land for development.  Gormley said that the new Planning Bill, ‘will put an end to the sort of unfettered and irresponsible rezonings that were a feature of political life.’ The Bill can’t come soon enough, although it’ll arrive long after the horse has bolted.  As noted on this blog and elsewhere, we are already living with the legacy of over-zoning and over-building.

The table below details the amount of zoned, serviced residential land in the country in June 2008, as reported by the Department of Environment (Latest House Building and Private Rented Statistics; Supply of Housing Land).  At that time, there was 14,191 hectares of land zoned for 462,709 potential new units.  (more…)

One of the aims of this blog has been to animate the geographies of the NAMA portfolio.  There has been a lot of discussion here recently about the Ghost Estates that will be brought into NAMA.  Of course, such property parcels do not comprise the entirety of the NAMA book, and in terms of ‘market potential’ some sites will no doubt hold more hope than others.  One of the sites being heralded as a potential ‘winner’ is the Battersea Power Station site in London, at the heart of the well-connected Nine Elms area along the Thames River, a prime (re-)development site in a city which horizontal expansion is highly constrained by strict planning regulations that protect London’s so-called ‘greenbelt’.  The site is currently owned by REO, a firm majority owned by Irish company Treasury Holdings (who coincidently are also NAMA’s landlord).  REO bought the 40-acre site in 2006 for £400 million (€532 million), using loans from a variety of banks, of which Bank of Ireland forms the majority share, with plans to develop the site into seven million square feet of mixed-use residential, retail and office space.  As such, this emblem of British industrial heritage has found its way into the auspices of NAMA, serving as indication of the reach of Irish capital into international markets, and of the relational production of urban landscapes in the post-industrial period.

The Battersea Power Station started producing electricity in 1937 and progressively ceased its activities during the 1970s and 1980s.  Since then, the future of the site has been the object of much quarrel and struggle between near-by residents, the local authorities, developers and various people and groups with an interest in preserving the power station and its surroundings for its cultural value.  From the 1980s onwards a campaign has been in place to try to save the building as part of British national heritage.  Seen as an important cultural icon in London, the power station was used on the cover art for the 1977 Pink Floyd album Animals, in addition to albums by a number of other groups, and as an emblem of Twentieth Century industrialism, it has taken its place within the vocabulary of popular cultureOver the years a number of development plans have commenced for the site, including an early plan to turn it into a theme park around Britain’s industrial history.  Current owners REO hired architect Rafael Viñoly to draw up an ambitious master plan for the site, the biggest ever seen in London.  Central to this plan was the division of the site into ‘character areas’ each with different functions, to utilise part of the power station to produce energy through biomass and waste, and to develop the “first zero carbon office space in Central London”.  Having been refused planning permission on the first go-around, a scaled back application is currently in the consultation phase.

As previously highlighted here 21% of the NAMA portfolio is made up from properties in the UK.   Of this, the Battersea site is certainly one of the most significant.  Speaking of the site’s induction into NAMA, Treasury managing director John Bruder was resolutely positive:

“The good, the bad and the ugly will be going in…There is no shame in being a Nama client no matter how good or how modest your property development loan is, once it is over €5 million…. Essentially Nama will be the only game in town for a period of time. The Irish banks had too much property development loans on their books – they will soon have no development loans.”

NAMA, for its part, will presumably be only too happy to have an iconic development such as this in a portfolio that must contain much in the line of hyper-inflated (and deflated) farmland.  The Battersea site is not devoid of its own set of problems, however.  Since late last year REO have been looking for a partner to invest with them in the site.  While the London market will recover quicker then most, it is likely that investor confidence is still likely to be waning.  The existing infrastructure (mainly made of steel) requires very significant investments to refurbish it owing to damages caused by 20 years of both flooding and vandalism following the removal of large chunks of the roof in the late 1980s when the British industrial history theme park redevelopment project started and quickly came to halt.  Furthermore, the developers face opposition from a strong community group who seek alternative actions for the site.  As a commentator in the Londonist recently stated, after the first REO application was refused:

“Over 25 years since it breathed its last fumes into the London fog, Battersea Power Station remains a blot in the copybook of countless developers and architects, and as yet another scheme is run through and rejected, the building’s gradual decomposition will continue. Perhaps it should be this way, a symbol of the flaws and fallacies of our developmental strategies.”

At the moment, despite its prime location in Central London, Battersea looks much more like an emblem of urban degeneration rather than regeneration.  This is not to say that REO’s plans for the site will never come to fruition.  However, as one of the jewels in the crown of NAMA’s property portfolio, perhaps the Battersea Power Station site is still a long way from realising substantial returns for the Irish taxpayer.

Delphine Ancien and Cian O’ Callaghan

Walking around a flooded Carrick-on-Shannon it’s easy to come to the conclusion that 2009 was an Annus Mirabilis for County Leitrim.  On so many fronts the county has been badly hit by the recession and has a range of challenges stockpiled for 2010 and beyond.

Leitrim has the smallest population of any county in the Republic, with 28,950 population in 2006 (up from 25,301 in 1991).  Accompanying this modest population growth has been a building boom, with new industrial estates and shops, along with housing estates, added to towns and villages, and a frenzy of one-off housing developments.

This building frenzy nose-dived after the peak of the property boom, but the damage has already been done – the housing vacancy rate is above 30 percent.  In April 2006, housing vacancy in the county was 29.3 percent.  Since then many new properties have been built, and with very low demand few have been occupied.  Whilst the growth in housing and industrial units to large degree mirrored population growth, it outpaced demand driven by tax 23 incentive developments (through the Rural Renewal Scheme introduced in the Finance Act 1998) and a strong pro-growth strategy in an area that was only ever likely to sustain relatively weak growth given its peripheral location to major urban centres, its population make-up, and its indigenous economic base.

Animation of new housing growth in Leitrim since 2003 in 1km grid squares

What this means is that the county has a massive oversupply of housing and industrial units that, even with sustained growth (and this is unlikely for at least a few years, possibly longer), will take many years to fill.  The result has been plummeting house prices, with a significant fall in asking price and the second lowest average price for homes in the country after Longford (according to daft.ie average asking prices in Leitrim are currently in the region of €181,285, which represents a year-on year fall of 18%, and a 28% fall from peak prices) and the creation of a small number of ghost estates (for example in Cootehall and the grounds of Kilronan Hotel).  For those that bought property post 2003 (and perhaps earlier) this will mean living with negative equity, and probably doing so for quite some time.

In addition, cuts in funding from central government have meant the curtailing of many social schemes and to the halting of local infrastructural projects such as road improvements.  The county is particular vulnerable to further cuts due to the division of the Leitrim constituency into two new constituencies – Sligo-North Leitrim and Roscommon-South Leitrim – for the 2007 election which leaves Leitrim with no locally based TD.  Moreover, the county would be highly vulnerable if the An Bord Snip (2009) proposal to merge county councils to gain economies of scale where implemented.

To add to Leitrim’s woes, claimants on the Live Register have more than trebled from a low of 1040 people in April to 2006 to 3482 in October 2009 (a 235% increase).  The national unemployment rate for the second quarter was 12% (males 15.1% and females 8.1%), with a rate of 13.4% for the Border region (the finest spatial resolution available).  In addition, for those working in agriculture in what is a largely rural county, the CSO has recently reported that farm operating surpluses are down by 30.3% in 2009, on top of a fall of 10.9% in 2008.

Unemployment has the potential to rise further and some parts of the county are prospectively quite vulnerable to a significant increase given the reliance on a small number of large employers that also help maintain the broader local economy.  For example, in the south of the county, Bank of America and Masonite are two major employers and any job losses in these cases will have serious ripples throughout the area.

As a border county Leitrim is losing some retail revenue to Fermanagh.  Another CSO report details that 41% of border residents shopped in the North between July 2008 and June 2009, a fair number making fairly regular trips.  Another indicator of consumer confidence is reflected in new car registrations which for January and February, 2009, nose-dived (leading, for example, to Casey’s Ford garage in Carrick on Shannon closing).

Carrick on Shannon flooding

Then to cap, what has been a pretty awful year, the unprecedented rainfall of November led to the River Shannon bursting its banks and flooding large parts of Carrick-on-Shannon, Cootehall, and Leitrim Village.  It has to be said that the devastation that followed seemed almost inevitable given that much of the recent development had taken place on the Shannon’s floodplains.  Nevertheless, for a struggling economy it was a bitter blow that will require millions of euro of state investment in flood management to address.

Leitrim people are a resilient and proud bunch, and while the recession will take its toll, they’ll continue to get on with life.  It would have been a damn sight easier though without the woes of 2009.

Prime development land?

Declan Curran, Justin Gleeson and Rob Kitchin

During the period of the Celtic Tiger, Ireland experienced an unprecedented level of growth and prosperity.  One of the most significant outcomes of this boom was the transformation of the built environment.  Housing estates sprouted up like weeds throughout the countryside, while cities and towns were increasingly characterised by the spectacle of speculation and spectacular transformations in the property sector.  The advocating of the creation of regional ‘Gateways’ and ‘hubs’ in the National Spatial Strategy (NSS) was central in driving a re-emphasis of Irish spatial policies on urban areas, with the major force being towards the development of a number of strong clusters of cities and towns to counterbalance the economic dominance of Dublin.  Within this system the imperative was on local authorities to produce development strategies that linked up with the ideals of the NSS, in order to draw down funding earmarked through the specifically formulated Gateway Initiative Fund.  Local authorities were therefore encouraged to plan in an ‘entrepreneurial’ manner; producing strategies that sought to guide development and investment, instead of planning acting as a controller and regulator of development.  Thus Irish towns and cities produced a series of plans that were concerned with growing their urban areas through investment in business, retail and residential spaces.  New developments of apartments, office blocks and shopping centres became a barometer of success indicating the growth in importance of different towns and cities.

In the larger cities, this often took the form of large-scale strategies to transform significant parcels of land.  Dublin was the first Irish city to play around with urban strategies of this ilk.  Docklands regeneration and the transformation of Temple Bar into a cultural or ‘creative’ quarter provided the basis of much of the new growth and investment in the city during the 1990s.  At the beginning of the 2000s similar strategies were launched in places like Cork and Limerick.  Like the plans for Dublin, those for Cork and Limerick were heavily dependent on private development sector investment, while still being reliant on central government to finance the upgrading of infrastructure that such projects required.  This is indicative of a general trend globally towards viewing cities as drivers of economic growth and as sites which compete with each other for investment.  Many critics have suggested the highly unequal geographies that such entrepreneurial urban policies create – both in terms of winner and loser cities, and winner and loser areas within cities.  Ireland has similarly been affected by these trends.  During Dublin’s property and investment boom existing working class populations were increasingly marginalised by new developments geared towards an influx of upwardly mobile middle class workers in the city’s emerging financial and knowledge industries.  More generally, the state’s support of the property industry pushed up average house prices to unsustainable and indefensible levels, which the now plummeting prices in this sector is testament to.

Following on from the recent recession, the assumptions that underpinned this model of urban and economic development have been fundamentally challenged.  Post Celtic Tiger Ireland is increasingly haunted by the spectre of an over-inflated property sector that fuelled the excesses of the boom.  The primacy of property development and speculation to the apparatus of the Irish economy, combined with irresponsible lending practices by banks and poor policy regulation in both sectors, has left a banking system bereft of credit, choking with ‘toxic’ debt, and a landscape charred with these aborted plans and failed spaces.  Within a context where capital funding has been removed and developer and investor confidence has plummeted, as banks balk under ‘toxic debt’ and flagrant corruption and the National Asset Management Agency has been established to resuscitate the bloated property industry, an urban ‘growth agenda’ no longer seems tenable.  Nevertheless, this rationale continues in the wake of recession.  Political and popular discussion is still concerned with getting the economy ‘performing’ again as opposed to dealing with social problems created by both the recession and the growing inequality of the boom that preceded it  Late bloomers like Limerick and Cork are now characterised by a silent echo where the spectacular growth plans used to resound, as mega-developments along the waterfront fully poised to proceed a year and a half ago are now conspicuous though the absence of any media fanfare surrounding them.  The entrepreneurial urban growth model was based on just that: the continuation of urban growth.  As the current moment suggests this was an unsustainable demand.  So far the state’s response to the crisis, in terms of recapitalising the banks and the establishment of NAMA has been an attempt to resuscitate this same system in its old form.  As we are now all feeling the sting of the over reliance on these type of policies, we should be questioning do we want a return to this boom-bust cycle, bearing in mind that the next recession will be just around the corner.  If not, then what are our alternatives for our cities and towns?  What priorities do we have and what development agendas do we now need to be pursuing?  The spatial impacts of the economic crisis warrants consideration, lest we fall into the trap of seeing the economy as ‘up in the air’ as opposed to written on the ground.

Cian O’Callaghan