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.
NAMA Wine Lake 
The 350,000 unoccupied units seems totally at odds with the report you mention earlier in your post. Why do you believe this number to be relevant?
We have some 2m homes in the State. The Ghost Estates report covers estates which have 120,000 homes in total. So Ghost Estate vacancies will be a subset of all vacancies. The 350,000 homes link will lead you to the other reports which set out in more detail what they represent.
The updated census data on empties may be published as early as this month …not next year. Certainly not later than August.
@2Pack, I understood that the only release in June 2011 would be preliminary male/female population and that we would need wait until sometime between March and December 2012 for the housing information including empties. This is what the CSO says
http://www.census.ie/Media/Latest-News.240.1.aspx
The Irish really are demonstration to the world that they are talkers rather than doers. An opportunity to take the initiative seldom fails to be used as an opportunity to add another layer of cost.
@Namawinelake
Don’t worry. We will know by August, latest. Here is how. I refer you to and quote from the “Conduct of the Census” paragraph of the 2006 preliminary report . The CSO cannot hide this grand total for another year and frankly I do not expect them to.
“http://www.cso.ie/census/documents/2006PreliminaryReport.pdf
“During the four weeks before Census Day the enumerators entered details in respect of 1.8 million private residences and communal establishments in their enumerator record books. They simultaneously delivered blank census questionnaires to 1.5 million of these dwellings that were expected to be occupied on census night.”
So there were 300000 empty homes at census 2006. They continue.
“Approximately 275,000 residences were vacant at the time of the census while in the remaining cases the household was either enumerated elsewhere or temporarily
absent from the State. The collection of completed questionnaires took place between Monday 24 April and Monday 22 May.”
When the final report came out the following year ( 2007) they added 29000 ‘Temporarily not at home households’ to that figure of 275,000 to give us the grand total of 300,000 empty homes we find here.
http://census.cso.ie/Census/TableViewer/tableView.aspx?ReportId=76536
I just had a shufty at that CSO link. The report is actually due out in June not by August! Best re-activate our Census punditry thread over on the Pin so.! I see I am already marked down for 350-360k units this time.
http://www.thepropertypin.com/viewtopic.php?f=4&t=37144&hilit=census
If you take the government’s intentions at face value we will be spading €20 million on management and security before they even begin to start the work on the c.19,830 homes to be finished.
I agree with NWL, and believe that rather than spending €100 million (€10,000 each) on those nearly finished and €500 million (€50,000 each) on those at an early stage, they would be better asking SPACE to sell them to the highest bidders with forfeit clauses if they are not completed within a reasonably short period.
Assuming an average site vale of €20,000 for those with little work and €80,000 for nearly completed units, such sales should bring in a total of €1 billion or more.
One thing is obvious, given the incompetence of government minions in general, any money expended by this latest quango will never be recovered. To give them funds to complete the work on these homes would be a disastrous and reckless decision
BTW, if the 23,250 homes that are complete and vacant were sold at c. €80,000 each it would bring in another €1.6 billion.
I assume that the loans on most of these homes reside within NAMA, however Willie Penrose also makes reference to “banks” as “stakeholders” in the problem. It would be interesting to see how much of this lending still resides within the belly of the banks.
I’m a bit confused on the ownership question here. Who owns these estates? Developers? Or if the developer is in liquidation, have the banks, as creditors, taken possession? Or if NAMA has taken over the non-performing loans, has NAMA actually taken possession of the properties (which I don’t recall seeing anything about)?
As part of the mix are we looking to an extent at some zombie developers, still notional owners of the properties, existing solely through the fact that the banks aren’t pursuing them?
@Ciaran, the report yesterday didn’t provide a lot of information on who owned the estates, though I believe NAMA has claimed to have control over a very small number of the “problem” estates, that is those that require urgent public health attention. The report yesterday did categorise four types of estate and correctly stated the problems arise where the developer (or bank or receiver) is no longer engaging in the completion of the estate and where the developer has absconded (or otherwise disappeared). However the report did not quantify these two categories which was a glaring omission.
And we don’t know from the report the scale of the problem of banks not pursuing or enforcing their security, though the problem is hinted at.
@who_shot_the_tiger I suspect that many of the ghost estates would be smaller developers(sub €20m) and these are still on the banks books.
@Jake, fair point though remember there was no minimum value threshold for loan exposures at Anglo, INBS and EBS. Only AIB and Bank of Ireland have a minimum exposure threshold of €20m.
BOSI, Ulster Bank, NIB, etc would all have funded some of these developments
I would like to make a few points
1. The number are not as bad as I expected them to be. 1082 out of 2846, that is 38% of all estate are complete or over 90 % complete.
2. That is real good opportunity for a tourist business based on an almost zero fixed cost base. The sunk costs are irrelevant. A revamped Bord Failte or unit thereof could tak-over these houses and market as holiday homes through fly drive packages.
3. There is a complete obsession with trying to sell the houses/properties. This is sheer economic nonsense at present. It is being driven by the banks, the receivers, the liquidators, the Dept of Finance and ultimately the ECB/EU. It is a super-coalition of liquidation interests whose sole focus is deleveraging to the advantage of the ECB/Banks.
It is complete economic madness from an Irish viewpoint.
4. There is also an enduring unwillingness of the State to take this issue by the scruff of the neck and deal with it. It would not cost huge amounts of money, it could provide invaluable employment in finishing the estates and as pointed out above could be a major tourist initiative.
5. It seems Ireland no longer has the bottle to deal with any issue, except trying to “keep tthe ATM’s” open. Ergo our supplication to the ECB and other various loan sharks.
6. The obsession with selling properties, as distinct from renting/leasing etc has so infested NAMA thinking, that it is now a serious overhanging danger to what is left of the economy.
7. We need to refocus completely on what the objective of the country should be. These should be completely different objectives from the ECB/Loan sharks, whose objectives will destroy the country.
8. With a little common sense, a small amount of money and a bit of marketing flair we could increase employment in building, improve tourist intake substatially, improve most of these estates for the residents living in them and take the overhang pressure off the housing market.
Although not an economist, I cannot understand how any of the present course of actions and indeed inactions, makes any sense whatever, even to the most atavistic of loan sharks in the ECB.
Jeez, I admire your confidence in the bonanza tourism will bring to a country that is hugely overpriced. I’m not sure hoteliers and other private suppliers of accomodation will be all that happy being squeezed out by yet more state interference.
Sell the damn things. Clear the market.
@shtove
Clear the market for whose benefit?
Tourism is one of the main government targets for growth and it is a sensible target.
Most of the hoteliers are already being run by NAMA or banks. That issue could be easily got over by giving the local businesses shares. In addition the design of the packages offered can easily be dovetailed to provide more business for everybody.
People have to get back to dealing with the real economy and with real people, who need hope for the future, not the failed financial ideologies, that have enriched few but impoverished billions of people.
It is long since time to say to hell with the money men,” the giant vampire squids” of the earth.
@Joseph Ryan: “deleveraging to the advantage of the ECB/Banks.” – No, it’s deleveraging to the advantage of the Irish tax payer and the next generation of Irish tax payers.
The ECB/Banks want us to keep propping up the value of these estates by *not* selling them thereby maximising the value of their loans to the Irish Banks and/or developers. And, of course, maximising the value of the NAMA loan book (granted – NAMA is a Worm Ouroboros in this respect, but common sense has to prevail at some stage, and losses must be taken by NAMA, even though it’s the tax payer who’s backing these losses – this is the crazy legacy we’ve been left with).
Rgds.
@l’ennui
I presume you reckon it is better to sell these estates, leaving them as a wasteland for the current residents to live out their lives in. Just so that the banks looses can be crystalised. The crystallised looses for the moment of course are being taken on by the idiot Irish taxpayers.
You have best start seelin quickly then, because the idiot Irish that are taking on the bank losses are becoming angrier by the day. At least those that remain in the country are. As for those that are leaving you will find very few flying a European flag outside their new residences or a free market flag for financiers either.
I would have thought the primary figures of concern from the census are ‘Population’, i.e. is it growing/falling, is there demand for houses (IF credit can be made to flow again). Are our boom time migrants staying put or are they heading home? de Social is better here and the rent allowance is keeping many a ‘property investor’ paying the interest only to de banks. What age group of ‘Irish’ passport holders are leaving the country and how many?