The Celtic Tiger property bubble was fuelled by “endemic corruption” in a planning system which zoned enough land at the height of the boom to cater for a doubling of the entire population — up to 8m people.
A review of planning across 34 city and county councils by An Taisce found that in 2008, as Ireland stood on the brink of economic collapse, 42,000 hectares were zoned for residential purposes — enough for 4m extra people on top of the 4.4m population at that time.
This does not take into account thousands of hectares of land zoned for mixed-use, industrial, retail, commercial, and other uses.
The study said reckless zoning vastly inflated the value of land. This provided an easy route to cheap credit and facilitated widespread property speculation which led to the financial crisis and the creation of Nama.
“There is no doubt a systemic failure of planning in Ireland helped inflate the property bubble, leaving in its wake a great deal of poor quality development, reckless overzoning, chaotic sprawl, a legacy of ghost development and widespread environmental degradation,” said the report.
An Taisce said 40% of the €75bn property portfolio transferred to Nama was categorised as “development land” which will be reclassified to agriculture over the coming years. This will result in the value of Nama’s development land plummeting from a paper figure of €30bn to a single-digit figure, costing tens of billions in losses for taxpayers over generations.
The report found Donegal had the worst planning record. It was one of 17 areas that failed the test for good decisions on housing and development — eight received an E grade, five received an F, and four were graded F-minus.
An Taisce found Donegal had about 2,250 hectares of residential land in 2010, enough for a population increase of 180,000. However, half of planning permissions over the past decade were granted on unzoned land.
Ennis in Clare was cited as an example of some of the most “senseless zoning excesses” of the Celtic Tiger.
Almost 4,500 acres of land was zoned for development, enough to increase the town’s population from 26,000 to over 100,000.
In one instance, zoned land sold by a farmer for €18.8m was later refused planning permission because it was on a flood plain. Although Ennis was one of the worst affected areas by flooding in 2009, and only needed a maximum of 175 acres, the Department of the Environment encountered “significant difficulties” from councillors in seeking to get this land de-zoned.
The worst three areas for residential over-zoning were Clare, Co Cork (2,500 hectares) and Donegal (2,250 hectares), which between them accounted for 20% of the national stock of residentially zoned land in 2010.
An Taisce spokesman Charles Stanley-Smith said the legacy of bad planning would haunt society for generations. “Bad planning is not victim free. The analysis shows that there is a very strong correlation between councils that have scored poorly and a range of negative socioeconomic and environmental outcomes.”
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