NIRSA (National Institute for Regional and Spatial Analysis) at NUI Maynooth today called for the creation of an independent inquiry into the “catastrophic failure” of the planning system, which contributed towards the property bubble and financial crisis. NIRSA said that like the Honohan and Regling & Watson reports on financial and banking regulation, an inquiry must be conducted into the formulation and implementation of planning policy, the over-zoning of land and granting of planning permission, and property tax incentives. NIRSA pointed out that Government has two levers to control building development - fiscal policy and the planning system, and they failed on both fronts.
Director of NIRSA, Professor Rob Kitchin says that a litany of systemic failures on the part of the Government and local authorities led to the over-development and the rezoning of land which was surplus to requirement, will take years to correct, and could seriously hamper both the recovery of the housing market and the operation of NAMA. “The banks could have lent all they wanted” Prof Rob Kitchin explained “but if zoning and planning permission was not granted, property construction could not have gone ahead.”
“An independent inquiry is needed to investigate all aspects of the planning system and its operation within and across different agencies and at all scales in Ireland including charges of localism, cronyism and clientelism. The creation of an inquiry will allow Ireland to learn from the mistakes of the past and help place the property market back on the road to recovery”, he said.
In a comprehensive report, the NIRSA team found:
NIRSA reports that the degree to which supply and demand were kept comparable varied significantly between local authorities. While several local authorities abjectly failed to manage development, Fingal, Kildare, Galway City, Meath, Wicklow and South Dublin were relatively prudent in the Celtic Tiger years and have low levels of oversupply.
NIRSA argues that a number of local authorities have essentially ignored good planning guidelines, regional and national objectives, sensible demographic profiling of potential demand and the fact that much of the land zoned lacks essential services. Instead, planning has been driven by the demands of developers and speculators, and ambitious, localised growth plans. Further, central government not only failed to adequately oversee, regulate and direct local planning, but actively encouraged its excesses through tax incentives and by disregarding its own principles as set out in the National Spatial Strategy through policies such as decentralisation.
NIRSA argues that seven key issues need to be addressed before consumers will regain confidence in property, house prices bottom out, and the housing market starts to function properly:
In addition, we need a clear plan of action to deal with ghost estates. This should include addressing social and economic conditions of those living on such estates and a full assessment of alternative uses.
While NIRSA said an independent report into the last 15 years was a vital component in restoring confidence to the system, so too is there a need for confidence and transparency in the government’s response to the crisis – the operation of NAMA.
“There is a growing sense that NAMA is paying too much for the loans it is acquiring and this is being borne out by its consistently falling projections of its own financial performance. For observers, there is a worrying lack of transparency about the nature or location of loans it is taking on. While NAMA does not have time to wait for land to be dezoned before determining its value, it should only be paying agricultural value for much of this land.” said Professor Kitchin.
“The truth is - based on current modus operandi - we will not know whether it might succeed or fail until much further down the line. That may be too late. For NAMA to succeed, the property market has to strengthen, but that is unlikely to happen unless people are confident about NAMA and its portfolio. At the moment, there are legitimate questions to be asked about NAMA’s potential”, he added.
“A Haunted Landscape: Housing and Ghost Estates in Post-Celtic Tiger Ireland” is published by Rob Kitchin, Justin Gleeson and Cian O’Callaghan of the National Institute for Regional and Spatial Analysis at NUI Maynooth, and Karen Keaveney of the School of Spatial Planning, Architecture and Civil Engineering, Queens University, Belfast.
The full report is available from /www.nuim.ie/nirsa/research/documents/WP59-A-Haunted-Landscape.pdf
Ends 29th July 2010