Artifical land shortage and property inflation

Cantab.

To what extent do people think that an artificial shortage of development lands contributes to property inflation? By artificial land shortage, I mean that the planning process in this country is overly bureaucratic, with ultimate decision-making lying in the hands of a select-few councillers.

I personally believe that local councils should adopt a whole new philosophy to planning, with the emphasis being on large-scale zoning of land in conjunction with a unified infrastructure policy. All this should be overseen by an independant (vested-interest free) agency responsible for investigating corruption and ensuring that all planning decisions balance in favour of benefiting citizens and not just private companies. Regions should be zoned either residential, industrial or commercial, infrastructure should be built prior to occupancy, and individual planning decisions should be outside the remit of the council and assessed by an independant state agency.

An Bord Pleanala, the NRA and an Taisce should all be abolished as they have shown to have dismally failed in their mission to provide for the social and economic needs of citizens and businesses in a growing economy through incompetence, favourtism and corruption.

As it stands, I think that local councillers have far too much power and are never held accountable for any planning decisions. There is a 'cute hoor' sub-culture alive and well in Ireland which rather than being shunned, is glorified and aspired to.

I read a letter in today's Irish Times - it read: The super-rich have never paid their fair share of tax. They dodged it illegally in the 1980s via Ansbacher and bogus non-resident accounts. Nowadays, thanks to this Government and its property schemes, it's all legal. Yours etc, Tim Bracken. Pope's Quay, Cork. This letter really sums up a lot of my feelings about living in Ireland in 2006.

And before I'm accused of being but a bitter under-30s Stakhanovite, I must say that I'm not sticking around for the hangover of 10-15 years of feasting. Thanks for the free education, do what yez like, I'm out of here!

Pa ElGrande

PS: Despite all the studies to see if house prices are above their “fundamental” levels, one thing is clear. When you visit the young owners of a flat that cost €400,000 — a box of 70 sq m in which it would be difficult to raise even one child — you don’t need econometrics to tell you something is wrong.

When you also realise that the building cost of such a box is no more than about €60,000, leaving €340,000 in land costs and profits, you begin to think there may be something peculiar about the property market.

Ireland is a low-density country. There is plenty of land for everyone. Why should building land be at such a huge premium?

Is there a collusive form of withholding land from the market so as to generate even higher prices?

Is there something badly flawed with our planning processes and with the provision of local authority services? If the property market is subject to such imperfections and rigidities, why hasn’t it been freed up by government intervention or at least scrutiny?

Michael Casey is former chief economist with the Central Bank of Ireland

Irish outlook: Michael Casey: Lock up budget gifts and throw away the key
http://www.timesonline.co.uk/newspaper/0,,2769-2252073,00.html

Looks like you are not the only one asking that question.

shoegirl

In the mid 1980s I went to secondary school on North Gt Georges St in Dublin's north city centre. There were at least 5 derelict sites on the street at that time. At that time this was the norm and almost every street in the city had up to a dozen and sometimes more derelict sites. The land was being hoarded for future development even then.

What was outrageous was that plans we drew up as a school project to "clean up" local eyesores were rejected by the owners and pooh-poohed by the council. The developers frequently deliberated allowed derelict sites to flourish as a way of forcing councils to allow favourable planning permissions at a later date to "improve" the site. Many of these sites formerly housed beautiful neo-Georgian houses which in a few infamous cases literally collapsed in the middle of rush hour traffic.

The only difference between then and now is that most of the land hoarding involves agricultural land which is likely to be rezoned in future development plans. This has worked succesfully for land hoarders in areas such as North and West Dublin, even more so in rural areas.

The problem is as much a failure of democracy as anything else. If local people voted out local politicans who nakedly and unashamedly promote development - particularly those as obvious as the notorious gang of 5 in Dunleer in Co Louth who have shamelessly promoted the plans of a developers which blantantly contrvene every piece of advice given by the planning authority - then they get what they deserve. If we hide behind the blinkered belief that the "friendly" TD is ok despite his/her susicious relationship with developers, then we will be promiting the phenomenon.

By the way see this link for the Dunleer situation:
http://www.ireland.com/focus/commuter/2.html

kluivert

Greed.

Gurgle

Cantab. wrote:

To what extent do people think that an artificial shortage of development lands contributes to property inflation?

I think its somewhere in the region of 100% responsible.

dunkamania

Consider that the low limits in apartment blocks height in Dublin will lead to higher land prices than cities with higher limits

karen3212

Gurgle wrote:

I think its somewhere in the region of 100% responsible.

Agree. I was disgusted by an article recently that seemed to praise the quick thinking of builders in drying up supply, to keep house prices high. What the effff.

Yeah, and the developers as you say wouldn't get away with it, if the local council gave more people permission to build outside of zones that the developers already own.

I think it is disgusting, the people at the bottom obviously are going to be homeless, and all of us paying far too much of our income on houses and rent, when we should be saving for pensions and enjoying life. We are so stupid to let this continue.

worded

Its great to be reading this.

Who wants to be a slave in Ireland to the banks?

Ive rented the same place for 10 years and the land lord wants to raise the rent from 1130 to 1280 PM, that + 150 for 2 bed apt, he said sure can you blame me?

Between no rent control and not wanting to pay 400K for a match box we are considering emigrating.

There were anti PRSI marches when people said enough was enough, was it the 80s?

The joke is over well now.

antoinolachtnai

The only way to do this is really for the local authority to build up a land bank (through cpo if necessary) and then rezone it. Rezoning private land is not a very good long-term strategy.

High property prices in Dublin have resulted in higher building densities, and that at least is a good thing.

ircoha

Appointing Callelly to the senate contains the answer.

shoegirl

antoinolachtnai wrote:

The only way to do this is really for the local authority to build up a land bank (through cpo if necessary) and then rezone it. Rezoning private land is not a very good long-term strategy.

High property prices in Dublin have resulted in higher building densities, and that at least is a good thing.

Excellent points on rezoning private land - all that does it add value to the land, and the only real beneficiary is the deed holder. Who basically can then sell on and make money out of nothing.

As for second point, I don't totally agree here. If higher building density was accompanied by high levels of occupancy I would agree, but the occupancy rate in Ireland appears to be declining rapidly - even now at least 15% of the housing stock is empty, and this is one of the highest rates in Europe. In fact, with such a huge vacancy rate, we should be questioning if there is any real housing shortage at all, but an ownership/occupancy crisis? Or perhaps somebody can put this better?

antoinolachtnai

As I understand it, the vacancy rate is a lot lower in Dublin. At first face, it appears that a lot of the spare accommodation is in places where there isn't as much demand. The driver of all these vacancies appears to be wealth and unbalanced development rather than density or property prices.