Further to the entry on here recently of the Galway County Council creating six new millionaires by paying landowners €75,000 per acre to acquire their land for a new road (with the average agricultural value of land in the State being €6-10,000), now it’s the turn of Limerick County Council who have made one lucky landowner a €10.4m-millionaire and have greatly enriched others. How? By paying an average of €127,000 per acre of land acquired for road building.
So how much has this recent failure to adopt the Kenny Report (which FF and FG ostensibly support, but have never implemented when they had the chance) cost the State? Taking agricultural land to be worth €10,000 an acre (the upper range of current prices) and uplifting that by 25% as recommended by the Kenny Report would have meant a price of €12,500 per acre was paid for each of the 442 acres acquired in Limerick. As the actual price paid worked out at €127,828 that means the State overpaid (again by reference to the recommendations in the Kenny Report) to the tune of €50,975,000.
Another key recommendation of the Kenny Report was the creation of an House Price Database that Housing Minister, Michael Finneran is still prevaricating over.
NAMA Wine Lake 
It does seem that implementing the Kenny report’s designated areas scheme would save councils from paying high prices for land for infrastructure, as in the cases above. I’m not sure that it would end speculation in development land as promised in the report, however:
Certainly, under the designated areas scheme local authorities could buy farmers’ fields at agricultural value plus 25% and profitably sell it on to housing developers at agricultural value plus 30%, but should we expect them to do so? As the largest potential seller of land in its jurisdiction, it seems that the authority would have a tremendous economic incentive not to take away the punchbowl by undermining the price of development land too deeply. And then there would be the political pressure not to do so. Certainly local authorities would enjoy a larger share of the rezoning windfall under the scheme, but the major problem over the past few years was not that the public sector wasn’t getting a big enough share of the property windfall.
(In any case, it’s obviously simply untrue that “” is the main or sole result of “” – the success of developers in selling inadequately serviced housing underlines this nicely.)
Very probably the government is long overdue to implement something, but for these and some other reasons I don’t think it should be an unmodified Kenny Report.
I’ve read the Kenny Report a couple of times and from what I can see, in these cases in Limerick and Galway, the land would be worth €6-10k per acre as agricultural land. Because the State is providing infrastructure for the common good, it needs acquire this land. So it is the State’s improvement to infrastructure which gives this land a value of €127k/acre. Plus of course by having access to a road, the residual value of the remaining land is likely to be enhanced because it will now have development value which it wouldn’t before.
During the boom, it is likely that some speculators/landbankers/farmers were making money hand over foot with the infrastructure upgrades at a cost to society as a whole. And although that capital expenditure might be cut back, as you can see from the Limerick and Galway examples, millionaires are still being created (and unlike developments, these millionaires are not paying an 80% development tax). The Kenny Report recommendations would be difficult to implement (no-where as difficult as the NAMA legilation though), and politically difficult if your support is coming from large landowners. Neither FG nor FF have done anything with the Report when in power – indeed if you read Fintan O’Toole’s Ship of Fools there is a fascinating history of how the parties have prevaricated when they were in power. Labour support the Kenny Report but then again they tend to be an urban party.
One of the other recommendations of the Kenny Report was the creation of an House Price Index. Now that is a relatively simple legislatively yet Michael Finneran is giving the impression of doing nothing with it. For an uptodate (which is not a little infuriating when you read Michael Finneran’s pat responses to questions in the Oireachtas) see here
https://namawinelake.wordpress.com/about/house-price-database/
[…] infrastructure, that price can rocket to well over €100,000 an acre. Not convinced? Why not ask the Limerick land-owner who pocketed €10.4m for a contribution from his land-holding so that a tunnel scheme might have been built; indeed […]