Sunday, 28 February 2010

Planning permission equals more bob for the builders.

You would have thought that with over 300,000 homes lying empty in Ireland (not including nearly 50,000 holiday homes), according to a study by the National Institute of Regional and Spatial Analysis, the last thing you would want to do is build even more empty dwellings, right?

It hasn’t stopped Shelbourne Development putting in a planning application for 11,500 homes only up the road from the moribund Adamstown mega-development. Similarly, Capel Developments has applied for planning permission to build 260 dwellings in Ashtown.

Now, I pass the apartments at Ashtown every day on the train. The once-bustling sales office is boarded up and covered in graffiti, and when you go by at night the number of darkened windows is a tell-tale sign of how many of them are lying empty. So why the hell would a developer want to build any more?

Mark Keenan, writing in the Sunday Times, offers the only plausible explanation. It seems that having land approved for planning permission, even in today’s climate, can increase its value by between 10% and 15% in outer Dublin, and up to 40% in areas such as Dublin 4. So, given the perilous financial state of many developers, getting their land planning-permission approved is the obvious way to perfume the balance sheet before the banks come sniffing round, post-Nama valuations.

Taking into account that any putative development should be considered against the background of sustainability, and given the fact that Dublin is already blighted by ghost estates, you might think that the only possible response of a properly functioning local authority would be to refuse any further requests for planning permission. Unless they accept it is simply a ruse and they know nothing is actually going to be built, at least not in the short or medium term.

But that would hardly be ethical, would it?

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Anna said...

Dear Mr GM..I did not hear of this -DO Keep posting on this one!
Are you getting this from reading Dublin’s 4 councils planning applications lists? You state the reason for these nonsensical applications is the need to bump up the value of land - with a developer knowing they’ll never Ever have the money to Build the houses- and the population won’t Ever have the money to Buy them.
But someday , ( this is what I understand you’re saying?) maybe these falsely inflated parcels of land could be acquired by Nama, even if Nama doesn’t give them the ‘value’ of it, but a % , they might still manage to make a profit on it. Another con trick that wouldn’t even Occur to the normal honest people here. Incredible. Do Name and shame! Please keep posting names of Leprechaun Developers , size of proposed Fairy Castle developments, and IF APPROVED, just which Gombeen councillor approved them. Shameless never ending greed.

Anonymous said...

I wonder will these additional potential builds end up being just more rubble and land fill? I have a feeling that all (or most) of these ghost estates in the middle of nowhere will be knocked. If NAMA was to sell them off in a fire sale (in one go or in small batches) I presume it would flood an already damaged market hence causing more damage? Where would the credit come from?
If these developers were to get there way and build more apartments, hence adding to the stupidity.....well lets just say it would'nt surprise me!!


The Gombeen Man said...

Hi Anna, Dakota.

It was just a small piece in Mark Keenan's "The Market". He mentioned the Jesuits putting in an appliction for homes in D4 too. It seems the very act of land being planning permission-approved bumps up its price considerably, even now. Keenan says that "some developers will be under pressure from their banks to raise the value of their land by any means, particularly if those asses are lined up for a 'haircut' [from Nama]" He says we're going to see more such applications.

Yes, it will be interesting to see the councils' response, won't it?

Anonymous said...

Em, I'd say thats a real possibility. NAMA will throw up some surprises, even by Irish standards. Though applications (not ot mention approval for same) for multiple units would be the thing of legend? Imagine property developers getting approval for large numbers of appartments or houses, NOW???? Not saying it could'nt happen though, it could.


Ella said...

Hi GM, love the headline!

Hangar Queen said...

Hello GM,
Was pointed your way by Captain P. and I'll be back. Keep up the good work. It is sorely needed.
Congrats also on the IBA nod.It's well deserved.

The Gombeen Man said...

Thanks! And welcome.