State loses €80m on land development scheme brought in at height of recession

The Comptroller and Auditor General told the PAC on Thursday that the Housing Agency had attributed the lack of development to a lack of demand for social housing in the various areas and zoning constraints, with committee members curious as to why sites with zoning constraints were purchased in the first place. File picture: Denis Minihane

The State has lost €80m on a marquee land development scheme introduced at the height of the recession, with just 13% of projected homes delivered since 2010.

The Land Aggregation Scheme (LAS), managed by the Housing Agency, was charged with taking lands with troubled loans—resulting from sites not being developed as planned—off county councils in order to ensure their development.

The Housing Agency was set up in 2010 to support housing functions in the local authorities. To date, €132m has been spent on the scheme for the acquisition of 73 sites around the country. Some 39 of those sites have seen no development since their acquisition.

At Thursday’s Public Accounts Committee (PAC) hearing with the Housing Agency, Green Party TD Marc Ó Cathasaigh described the State as having “kissed a lot of frogs” with regard to the scheme.

Asked what the difference in value between the €132m paid out for the scheme and the value of the lands retained by the State in 2023, the agency’s director of housing Jim Baneham said that what is retained has a market value of €56m, leaving a “gap in the region of €80m”.

Mr Ó Cathasaigh contrasted the “convulsions” the PAC had gotten itself into over hidden payments of €75,000 to RTÉ presenter Ryan Tubridy with the losses being seen with the LAS.

“Where are the checks and balances?” he asked Department of Housing secretary-general Graham Doyle, given there is “such a huge variance in what was signed off and what you’ve come back with”.

Of nine of the 39 sites which have no immediate development plans, two are in Cork, which have been earmarked for development via a public private partnership.

Two more are located in Sligo "a very rural setting... with no access to public transport”. Significant infrastructural works would be required to serve the sites, while there is no demand for social housing in the area.

The Comptroller and Auditor General told the PAC on Thursday that the Housing Agency had attributed the lack of development to a lack of demand for social housing in the various areas and zoning constraints, with committee members curious as to why sites with zoning constraints were purchased in the first place.

Fianna Fáil’s Paul McAuliffe bemoaned the fact the scheme was “a really good idea” and yet “an incredibly insufficient number of houses” have been built since its inception. “We started the decade in dire financial straits, but at some stage there was a tipping point,” he said.

He asked “when did the alarm bells ring” in terms of when the agency realised the sites were not being developed, to which agency CEO Bob Jordan replied “at one point there was no money available” for the scheme.

Peter McVerry Trust

Separately, the committee discussed the bail-out currently in train for housing charity the Peter McVerry Trust.

Mr Doyle said €15m has been made available to the charity “in a gradual sense over the next number of months”.

Mr Doyle denied that State aid rules could be breached by the bail-out, arguing that “there are a lot of vulnerable people dependent on” the trust and that its services need to be maintained.

He confirmed that Minister for Housing Darragh O’Brien first became aware of the trust’s difficulties last July, at the same time the department did.