Time to raze the unfinished relics of the building boom...
Ireland is about to witness a US-style degeneration of half- built housing schemes into ghost estates, says Juno McEnroe.
FORMER US President Thomas Jefferson once said that small landholders are the most precious part of a state.
In Ireland this phrase rang true during the boom with the first-time buyers and start-up investors who were encouraged to throw their cash into property.
At one stage the property and construction sector made up over 20% of Government income. A precious pot for the State indeed.
But just as Jefferson’s ideology of giving tracts of land to ordinary US citizens ended up benefiting greedy speculators, Ireland’s property investment schemes during the boom saw towns ravaged by sprawl, over-development and a plethora of ‘phantom’ or ‘ghost estates’ that now look unlikely ever to be finished.
So it now looks as though the landholders will be the most worthless, or even the costliest, part of our esteemed state.
At the peak of the property boom, estimates suggested there was an oversupply of anything from 35,000 to 200,000 homes.
Then we were building 90,000 home units a year. As we now know, demand plummeted.
Estimates now suggest there are 136,000 home units lying idle – the equivalent of four years of housing demand, according to economic consultants DKM.
In the United States, oversupply of homes has seen prices savaged, whole estates knocked down and speculators hoovering up properties by the dozen with just a bag full of money.
Houses in Detroit have sold for as little as $1 and whole areas have become ghost towns.
This dilemma is about to unfold in Ireland.
In Longford alone, it was suggested recently that council chiefs had compiled a list of more than 80 unfinished developments.
Houses are being left vacant with not a soul to rent them because jobs are needed in order to have a healthy rental market.
In the US, the same scenario saw estates and new villages become breeding grounds for marginalisation and crime. Roads are left unfinished, street lights remain off and the few families who took the risk of buying into a scheme suddenly find themselves babysitting a whole estate of maybe 60 or 70 empty homes.
Ultimately, gardaí can only patrol these half-complete estates for so long. And no one is going to buy into a scheme with long-term negative equity written all over it.
In Roscommon, Cavan, Longford and Leitrim during the boom, tax incentives saw scores of developers building large estates in or outside small towns so that investors or eager buyers could take advantage of section 23 tax relief under the rural renewal scheme.
Developments were encouraged by the Government’s decentralisation scheme which, for example, saw the prison service and social welfare department move to Longford. Blue- chip company expansions also boosted employment. But that was then.
It could be argued now that the State has been saddled with these developments, which will be at the centre of ‘NAMA-land’ when the agency takes control of bad debts.
Instead of the landowners and land being our most precious commodity, the spectre of ghost estates scarring traditional villages and rural areas has been left.
One TD has even argued that the bland unfinished estates look like grim Soviet housing blocks left over from the Stalinist era.
It could be argued then that all that is really left to do is bulldoze down the mess, the empty villages, the potentially crime-ridden schemes, so the taxpayer is not left to pay for it.
Just like the set of the film Ryan’s Daughter, made and built in scenic Ireland, no one is prepared to move in. Possibly there may be no choice but to knock down such fictions.
Report by Juno McEnroe - Irish Examiner
Ireland is about to witness a US-style degeneration of half- built housing schemes into ghost estates, says Juno McEnroe.
FORMER US President Thomas Jefferson once said that small landholders are the most precious part of a state.
In Ireland this phrase rang true during the boom with the first-time buyers and start-up investors who were encouraged to throw their cash into property.
At one stage the property and construction sector made up over 20% of Government income. A precious pot for the State indeed.
But just as Jefferson’s ideology of giving tracts of land to ordinary US citizens ended up benefiting greedy speculators, Ireland’s property investment schemes during the boom saw towns ravaged by sprawl, over-development and a plethora of ‘phantom’ or ‘ghost estates’ that now look unlikely ever to be finished.
So it now looks as though the landholders will be the most worthless, or even the costliest, part of our esteemed state.
At the peak of the property boom, estimates suggested there was an oversupply of anything from 35,000 to 200,000 homes.
Then we were building 90,000 home units a year. As we now know, demand plummeted.
Estimates now suggest there are 136,000 home units lying idle – the equivalent of four years of housing demand, according to economic consultants DKM.
In the United States, oversupply of homes has seen prices savaged, whole estates knocked down and speculators hoovering up properties by the dozen with just a bag full of money.
Houses in Detroit have sold for as little as $1 and whole areas have become ghost towns.
This dilemma is about to unfold in Ireland.
In Longford alone, it was suggested recently that council chiefs had compiled a list of more than 80 unfinished developments.
Houses are being left vacant with not a soul to rent them because jobs are needed in order to have a healthy rental market.
In the US, the same scenario saw estates and new villages become breeding grounds for marginalisation and crime. Roads are left unfinished, street lights remain off and the few families who took the risk of buying into a scheme suddenly find themselves babysitting a whole estate of maybe 60 or 70 empty homes.
Ultimately, gardaí can only patrol these half-complete estates for so long. And no one is going to buy into a scheme with long-term negative equity written all over it.
In Roscommon, Cavan, Longford and Leitrim during the boom, tax incentives saw scores of developers building large estates in or outside small towns so that investors or eager buyers could take advantage of section 23 tax relief under the rural renewal scheme.
Developments were encouraged by the Government’s decentralisation scheme which, for example, saw the prison service and social welfare department move to Longford. Blue- chip company expansions also boosted employment. But that was then.
It could be argued now that the State has been saddled with these developments, which will be at the centre of ‘NAMA-land’ when the agency takes control of bad debts.
Instead of the landowners and land being our most precious commodity, the spectre of ghost estates scarring traditional villages and rural areas has been left.
One TD has even argued that the bland unfinished estates look like grim Soviet housing blocks left over from the Stalinist era.
It could be argued then that all that is really left to do is bulldoze down the mess, the empty villages, the potentially crime-ridden schemes, so the taxpayer is not left to pay for it.
Just like the set of the film Ryan’s Daughter, made and built in scenic Ireland, no one is prepared to move in. Possibly there may be no choice but to knock down such fictions.
Report by Juno McEnroe - Irish Examiner