I’m quite sure there was a commitment just over 100 days ago during the general election campaign to reduce the number of quangos, merge some together, extract efficiencies and overall to reduce the cost of running the hundreds of quasi government organisations, many of which mushroomed under the hallucination of the construction bubble phase of the Celtic Tiger. But as far as I can see, one of the first priorities for this new Government appears to have been to create new quangos, and the Government is fooling no-one by calling them “committees” or Special Delivery Units.
Today the new Minister for Housing and Planning, Willie Penrose announced the setting up of a new “national co-ordination committee” in the next two weeks to deal with legacy issues in the 2,800-odd Ghost Estates scattered throughout the country. You might recall that there was an audit of the numbers and conditions of these estates which was published last October 2010. That gave rise to an “advisory group”, a Guidance Manual, an interim report published in February 2011 and today the Advisory Group published a report on the way forward with dealing with these Ghost Estates. It seems to me that there continues to be a lot of talking but very little action in dealing with the legacy of over-building and developers that are in financial difficulty in a market where demand has dried up. When today’s report uses expressions like “utilizing housing stock for low-cost sale” to presumably mean “sell the houses for what you can get for them”, your heart begins to sink at the thought that these people are not getting the scale of the over-supply versus the absence of demand and credit.
In terms of the what seem like emergency issues (dealt with here), €5m has been made available to local authorities to deal with public safety issues (by the way that’s roughly the interest that we need pay for the next 36 hours to the IMF/EU on loans which we have drawn down but not yet used and which is sitting in accounts in state-guaranteed banks earning an unknown rate of interest but it’s unlikely to be much). Of the €5m made available, the Minister today announced that the first allocation of €1.5m was forthcoming.
It is recommended that 102 people be recruited or reassigned to deal exclusively with Ghost Estate issues across the country’s 34 local authorities (3 per authority) for a period of 2-3 years. The report doesn’t cost this extra manpower but at say an average staff cost of (conservatively) €50,000 a head, that’s €5m a year for 2-3 years. The report doesn’t appear to say who will pay for all these staff.
Nor is it clear who will pay for the new “national co-ordination committee”. And at this stage there must be a fear that this new committee is going to distort the market further, by frustrating the natural functioning of the market which should see liquidated stock sold on the open market for whatever price is available.
What the report does do is state the obvious, that problems are with partly completed estates where the developer or receiver is not acting to complete construction or where the developer has disappeared. The report helpfully categorises these estates but doesn’t quantify them. The report alludes to potential problems with enforcing bonds or seeking to use bonds to finish off construction, but it seems very light.
From the perspective on here, today’s report marks little progress in practically dealing with our Ghost Estate legacy. Remember also that there are some 350,000 vacant properties in the State (that will be updated when the results of the recent Census 2011 are published next year). Of the 350,000 it is estimated that more than 100,000 represent an “overhang”, that is a level of vacancy above the long term average. It is indicative of the oversupply problem, of which vacant homes on Ghost Estates are but a part.
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