Councils run up €30m debt on unsuitable land

Two county councils ran up debts of nearly €30m buying land for social housing schemes — only for the sites to later be deemed "unsuitable for residential development".

Dun Laoghaire-Rathdown County Council accumulated a €16,849,592 debt buying two sites for social housing, while Cork County Council had loans totalling €12,926,765 related to the purchase of 12 sites for the same purpose. It was later decided, however, that none of the 14 sites in question were suitable for residential development.

Reasons for the sites being deemed unsuitable for housing development included access problems, not having enough development potential at that point, and high costs.

The councils had attempted to offload the sites, and the debts associated with them, as part of a Government scheme established to alleviate the financial burden on local authorities that were servicing land loans.

However, the Government’s Housing Agency, which administered the Land Aggregation Scheme, rejected the applications from the councils for the 14 sites in question because only lands with reasonable residential development potential and which there were no plans to develop in the short to medium term could be transferred into the scheme.

Described as a ‘mini-Nama’, the scheme saw some €164m of loans on proposed social housing sites taken off the books of local authorities across the country. The Housing Agency would buy the lands off the councils for a nominal €1 fee, but would take the debt on the site with it.

The scheme, introduced in 2010, closed to applications in 2013 when it was decided that it was no longer sustainable to continue taking land debts off the councils.

Three other councils also had applications to transfer land under the scheme rejected for similar reasons.

Galway County Council had loans worth €834,227 relating to two sites refused.

Wexford County Council spent IR£406,410 (€516,140) on three sites that were deemed unsuitable for the scheme. The council was told two of the three sites were not zoned for housing.

Limerick County Council spent €366,953 on four sites. They were refused for reasons including the shape of one site, poor access to another, and two sites that were in rural locations. One of the four sites was not zoned for housing.