A lot more must be done to balance out the lop-sided development imbalance between Dublin and the rest of the country, writes Michael McCarthy.
JUST take a look at a map of Ireland. All roads lead to Dublin.
Its tentacle arms reach out to all corners and it sucks up its resources, concentrating them in concentric circles from the inside its medieval centre.
Dublin has long been the source of Ireland’s lop-sided development problem.
It sucks resources and people from all other parts of the country making housing and property in general excessively priced.
The imbalance between Dublin and the rest of the country is even greater than that of London relative to the rest of England.
The greater Dublin area accounts for 47% of Irish GDP whereas London accounts for 30% of English GDP.
This distortion is most evident in the prime resource for development, that is, development land.
The average cost for land per plot for a three-bed semi in the greater Dublin area is assumed to be €50,000.
In comparison currently for second-tier cities, the cost per plot is taken at €20,000, or a 150% difference.
When percentage based costs are added to the higher land cost, the problem compounds significantly.
These costs, which comprise of builder’s margin, VAT, auctioneer’s fees are added to the original €30,000, the difference becomes €40,000.
This is a further 33% increase just for higher land costs.
These higher costs then require higher wages to service them or a lower quality of life to be able to afford them.
Consequently, demand for development land then feeds a spiral of increasingly expensive services through the local economy.
In early February, the Government initiated a public consultation process to address this and related issues in the Ireland 2040 National Planning Framework.
Submissions by groups, organisations or companies can be made up to noon on March 16.
How to balance development
There are a number of internationally proven ways to balance growth and development evenly through an economy.
The most effective way to address regional imbalance is to provide the right infrastructure to allow people to conduct their businesses and lives to the best of their abilities.
Another way is to have adequately sized, metropolitan areas with directly elected administrations.
Ireland has long had an infrastructure deficit in favour of Dublin. It is the only city in the Republic with an orbital route and has two light rail systems.
Now, take Cork as a counter example. It has no orbital route, which has made the northside of the city an island. This leaves people and business at the mercy of congested city streets and river crossings, resulting in millions of hours of lost and unproductive time every year.
It creates its own lopsided development as it leaves the north side as a less attractive location to live or invest.
For balanced regional development to occur, the South and the West need to effectively counter balance the North and the East.
Cork should be connected to Limerick and on to Galway with a motorway, and Cork airport needs to have expanded capacity and extra routes to make it a favourable location to attract investment and visitors.
Ireland has the second lowest rate of infrastructure investment in Europe, despite having one of the fastest growing populations.
Most of this is concentrated in and around Dublin, further exaggerating the existing imbalance between it and everywhere else.
Set our cities free
It’s not just the physical infrastructure that makes an economy productive, prosperous and provides good quality of life. In all cases the social and management infrastructure matters more.
Cities are the engines of growth in an economy. The synergy and efficiency cities provide create value, opportunity and employment.
When cities are planned and managed effectively, their power to create wealth and opportunity is magnified.
A major source of the success of the USA is the principle of direct democracy as it relates to the management of their physical and social assets, in particular, their towns and cities.
It is this structure of directly elected mayoral positions and administrations that creates their dynamic economy where cities compete to provide the most favourable conditions for their populations and businesses.
When this principle was brought to the UK with the Great London Authority Act 1999, it helped to turbo-charge the growth of London with the election of its first mayor in 2000.
There has been a strong correlation in the GDP growth relative to the next eight largest cities and the rate of house prices increase since the introduction of the office of the Mayor of London.
Such has been its success, it has been rolled out to other cities. Those who have taken up this model have seen their fortunes and prosperity take off also.
It goes without saying that for a city to operate to its potential, it has to have a critical mass, a certain size before it can begin to deliver efficiency at scale.
Cork city as it is currently defined does not meet this standard. Its unnatural boundaries restrict its development and curtails its potential.
If we are to re-balance development, the most cost-effective place to start is by re-drawing the map of the Cork city and letting residents decide how their city is managed and their property tax is spent.
Have your say: We are at a point in time where we can make our views heard about where investment may be located and why.
Do we continue to feed the beast that is Dublin, or do we give other places a chance to survive and thrive?
If you care about a sustainable future for the south and west, where people can live affordably with a good quality of life and not stuck in traffic for hours every day, now is the time to make your views heard.
Go to the ‘Ireland 2040, Our Plan’ website at www.npf.ie to make a submission.
Michael McCarthy is MD of MMC Quantity Surveyors, a Cork-based quantity surveying practice working in Ireland & the UK
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