Alice charles planning issues autumn 2011 article

Planning Issues, Volume 1, No. 3, Autumn 2011 10
Analysis
ALICE CHARLES, MIPI
and thus lost much of its strategic
focus. In terms of its implementation,
the strategy was largely ignored,
even by Central Government when
implementing its decentralisation
plans and introducing property tax
incentives.
At a local plan making level, mere
‘regard’ was given to national and
regional policy and, despite often the
best advice of planners, councillors
and management succumbed to
pressure from developers and vested
interests, who exerted undue influence
on plan making. As a result, bad zoning
decisions were made, which led to an
abundance of zoned land, often in the
wrong location and lacking services.
When developers were contemplating
the purchase of land or property, they
had little regard for statutory plans
and similarly bankers ignored planning
parameters in lending. In developers
haste to make profit on their hefty
investments, good design often fell
by the wayside. As a result, planning
authorities were increasingly faced
with determining planning applications
for intensive development of a poor
design quality and with limited
social and community infrastructure.
Whilst planners often rejected such
applications, in some cases they were
granted and it was left to An Bord
Pleanála to interpret the relevant
Development Plan and refuse such
development - that’s if the application
was appealed to the Board.
Not only should the planning profession
have been more vocal in outlining its
concerns but the planning system
should have acted as a counter
balance to the development frenzy.
Planning should have controlled the
level and location of development
in the interests of the “common
good” and subject to the principles
of proper planning and sustainable
development.
The legacy
Our downfall has been well
documented by the global media
and it has unfortunately led to the
development of new phenomena, such
as the ‘unfinished/ghost estate’ and
increased the level of employment
and wages commanded and so the
multiplier effect kicked in and the
Celtic Tiger took off.
On entering the single currency, interest
rates were dramatically reduced and
suddenly developers found that banks
had a lot of cheap money available,
so borrowing large amounts became
the norm and construction intensified.
In turn, those buying properties were
encouraged to borrow larger amounts
of money and as the affordability gap
widened, the amounts and percentage
borrowed increased and construction
activity started to drift from urban
centres to the more affordable rural
hinterland.
When the pace of the Celtic Tiger
started to slow, the Government
responded by introducing property tax
incentives to prop up the construction
industry. This resulted in areas like
the Upper Shannon being littered
with Section 23 properties. Whilst
many may have quietly questioned
the sustainability of such practices,
few voiced their concerns and when
they did they were shot down by
Government and the mass media who
promoted property as a sure bet.
However, the Celtic Tiger came to a
grinding halt in 2008, with the onset
of the global financial crisis and in
particular the level of exposure of our
banks to land and property loans.
Where was planning?
Many would rightly ask, where was
planning during the Celtic Tiger and
whilst we may find it difficult to
accept, we must acknowledge that
the planning system failed. This may
be attributed more to the politics of
planning than the actual profession,
but the system nonetheless failed.
Planning in Ireland historically lacked
joined up thinking and often pandered
to political and local interests. In an
attempt to overcome this problem,
the National Spatial Strategy (NSS)
was produced in 2002. The document
identified Gateways and Hubs to
accommodate balanced regional
growth, up to 2020. However, the
document was politically watered down
Irish Property Market
Collapse: the Cause,
the Legacy, NAMA and
the Role of Planning
Whilst the current Irish property
market collapse is by no means
unique, the extent of the collapse is
arguably greater than that experienced
internationally. This is essentially a
result of poor planning, property tax
incentives and lax regulation, in the
preceding decade; the legacy of which
is a plethora of unfinished estates,
zombie hotels and golf courses and
an abundance of zoned land. NAMA
is but one mechanism that has been
employed to deal with the banking
and corresponding property market
collapse. In this article Alice Charles
explores the cause, the legacy, the
solution (NAMA) and the role of
planning.
What happened?
The roots of the Celtic Tiger can be
traced back to the early 1990’s, when
Ireland started benefitting directly from
prosperity resulting from the influx
of multinational companies. Ireland
became the destination of choice for
multinationals, due to the workforce’s
educational attainment relative to
other English speaking countries. This
resulted in a dramatic increase in
employment and as employment grew
so too did the demand for houses.
The construction industry responded
by increasing output and in so doing

11 Planning Issues, Volume 1, No. 3, Autumn 2011
Analysis
the ‘zombie’ hotel. The legacy of the
Celtic Tiger is not only a collapsed
economy and development sector, but
a surplus of partially completed or
completed developments, comprising
2,846 unfinished estates, zombie hotels
and golf courses, with a excess of
15,000 bed spaces, struggling private
hospitals, vacant commercial property
and derelict historic properties.
In addition, there is an abundance
of raw land, some of which has
permitted proposed development, is
zoned or unzoned. There is more
than 44,000 hectares of land zoned
for development, yet at most there
is only a requirement for 12,450
hectares. In cases where our
infrastructure was not upgraded in
tandem with development, we have a
huge physical, social and recreational
infrastructure deficit, with investment
critically needed in water, wastewater,
public transport, education and health
to meet the needs of the existing and
future population.
The solution
The National Asset Management
Agency (NAMA) was established in
2009, as a key part of the solution
to the Irish banking crisis. NAMA
operates under the confines of the
NAMA Act 2009, and is a mechanism
to deal with the riskiest land and
development loans on banks’ balance
sheets. These loans were preventing
banks from lending into the economy,
thus preventing economic recovery.
NAMA involves the removal of land,
development and associated loans off
the bank’s balance sheets and their
acquisition by NAMA, for which NAMA
has to date, paid the banks €30.5
billion in redeemable securities.
NAMA is an asset management
company that acquires good and
bad loans at market value from the
Irish banking institutions. NAMA has
acquired more than 11,500 property-
related loans from the Irish banking
institutions involving 850 debtors,
16,000 properties and loan balances
of €72.3 billion. The loan book will
shortly increase to €74.2 billion after
the residual tranche of loans are
removed from the bank’s balance
sheets. 60% of the loans are secured
by commercial or residential property
and 40% by undeveloped land or by
properties under development. 60% of
the loans are in Ireland, nearly 30%
are in the UK, whilst the remainder
are in the wider world. The objective
set under Section 10 of the NAMA Act
2009, is to recover, at a minimum, the
amount paid, plus whatever additional
funds achievable as working or
development capital for projects.
When the loans are acquired by
NAMA, it requests debtors to submit a
detailed 3-year business plan within 30
days of acquisition. Business plans are
then reviewed and NAMA determines
whether these plans are viable and
will either approve them, reject them
or refer them back to the respective
borrower for amendment. Where plans
are approved, NAMA will monitor the
debtors’ subsequent performance to
ensure they adhere to the targets
contained in the approved business
plans in relation to the agreed debt
repayment/disposal strategy. Where
business plans are rejected and
borrowers are considered to be no
longer viable, enforcement is pursued
against the debtor and receivers
working on behalf of the organisation
offer the land and property for sale.
It must also be acknowledged that the
foreign banks also have mechanisms in
place to manage land and development
loans. The model is somewhat similar
to that of NAMA, with many forming
global restructuring teams to manage
major corporate clients in financial
distress. The principal aim of the banks
is to maximise debt recovery and in
so doing, they require borrowers to
prepare revised business plans for
approval or rejection. If plans are
approved the bank will work with the
developer towards the implementation
of the plan, but if rejected then the
bank can appoint receivers and seek
to realise whatever value they can for
the asset. It is also worth noting that
land and property assets managed
by foreign banks often sit alongside
NAMA assets and it may be in the
public interest for both parties to
work together to realise best value
for the asset.
NAMA and Planning: The legislature
NAMA is a commercial entity that is
focused on recovering for the taxpayer
what it has paid for the acquisition
of the assets plus any additional
project funding, working capital and
other costs. Whilst this may appear
contrary to the basic premise of
planning for the ‘common good’, when
the legislation is scrutinised, planning
actually plays a greater role than first
envisaged.
This is demonstrated in various sections
of the National Asset Management Act
2009 (NAMA Act), but specifically in
Sections 2, 11 and 12. Section 2 of
the NAMA Act explicitly states that
one of the purposes of the Act is ‘to
contribute to the social and economic
development of the State’. Section
11 of the NAMA Act indicates that
in exercising its ‘functions NAMA shall
have regard to the need to avoid
undue concentrations or distortions
in the market for development land’.
Section 12 refers to the powers of
NAMA and it explicitly states that
NAMA has the power to ‘make any
planning application in relation to
land, and intervene in any planning
application made by another person’
and ‘ make any application to develop
minerals on land’, and ‘undertake
development for the purpose of
realising the full value of any asset’,
and in exercising its powers ‘NAMA
shall have regard to proper planning
and sustainable development as
expressed in Government policy and
in any relevant regional planning
guidelines (within the meaning of the
Planning and Development Act 2000)
and development plan...’. Section 148
Schedule 1 of the NAMA Act also
provides Statutory Receivers with similar
powers to that of NAMA indicating
that they have the power ‘to apply for
and maintain any planning permission,
building regulation approval or any
other authorisation’. In addition, the
NAMA Act refers to the need to give
consideration to planning in relation
to the valuation and acquisition of
assets from the banking institutions in
various Sections of the Act.

housing developments (both houses
and apartments), infrastructural
development, special problems
associated with hotels and golf courses,
development contributions, bonds and
the new planning legislation.
The Committee guided NAMA’s
participation on the Expert Advisory
Group on Unfinished Housing
Developments which was established
to advise the Ministers of State for
Housing and Planning on actions
to ensure the effective management
of these developments. The Group’s
report was published by the Minister
for Housing in June 2011. That report
identified 2,846 unfinished estates
and categorised them by reference
to the extent to which they required
remediation. The report identified
225 Category IV estates, which
are deemed to require immediate
remedial attention. NAMA debtors
have loans with an exposure to 31
of those Category IV estates. NAMA
is undertaking an analysis of these
estates with a view to developing site
resolution plans, which will address
the most pressing matters that require
resolution and has committed to
investing €3 million to fund urgent
construction works.
NAMA has proactively engaged with
both the DoES and the HSE and
other State bodies in relation to their
possible need for land and property
for schools and health care facilities,
etc. A number of locations have been
identified for further consideration by
State bodies. There are also ongoing
discussions with the HSCA about
their interest in land and properties
(mainly in urban areas) for social and
affordable housing and rent and leasing
schemes. In this regard a member of
staff has been seconded from the
DoECLG to review the residential
units managed by the organisation,
to establish if any of the assets may
be suitable for the provision of social
and affordable housing. In accordance
with the Board’s direction, such land/
properties will be offered at NAMA’s
minimum reserve price (independently
appraised) to such State Departments
or bodies for four weeks, subject to a
definite decision, contract and closing
planning and sustainable development
generally, as well as the specific
issues such as housing policy, public
transport, key infrastructure, amenity
and community facilities, provision of
sites for public purposes, economic
and social development objectives,
planning legislation and processes and
long-term public interest. As advised
by the Committee, the Board has had
regard to these submissions in the
development of NAMA’s strategies and
policies.
The Committee had discussions with
a number of Government Departments
and with other organisations in
relation to planning and development
matters of mutual interest. These
bodies included the Department
of Environment, Community and
Local Government (DoECLG), the
Department of Education and Skills
(DoES), An Bord Pleanála (ABP), the
Health Service Executive (HSE), the
Housing and Sustainable Communities
Agency (HSCA) and the County and
City Managers’ Association (CCMA).
The following are some of the issues
which have been covered in these
discussions and which have been the
subject of the Committee’s advice to
the Board:
Recognising the pressing need for a
national planning information system,
the DoCHLG (with the support of other
interested organisations, including
NAMA) plans to establish, by the end
of 2011, an internet browser-based
GIS planning information system,
incorporating national planning spatial
data including zoning, unfinished
housing developments, housing land
availability and developing areas.
The Committee has worked closely
with the Department in terms of
NAMA’s contribution to the system.
On completion of the exercise NAMA
will supplement the GIS planning
information system with information
pertaining to its assets, to inform a
strategic overview of its assets.
Discussions have taken place with
DoECLG, ABP and the CCMA on issues
which have an impact on NAMA’s
work including the extent of over-
zoning, housing densities, unfinished
NAMA Planning Advisory Committee
and its workings
Section 33 of the NAMA Act 2009
provides that the NAMA Board may
establish advisory committees and
two have been set up to date: the
Planning Advisory Committee (PAC)
and the Northern Ireland Advisory
Committee.
The Planning Advisory Committee is
comprised of the following people:
William Soffe (Chairman, Board•
Member)
Brendan McDonagh (Chief•
Executive, NAMA and Board
member)
Michael Connolly (Board Member)•
John Mulcahy (Head of Portfolio•
Management)
Michael Wall (External Member)•
Alice Charles (External Member)•
The purpose of the Planning Advisory
Committee is to provide strategic
advice and recommendations to the
Board on planning, land and related
matters that may exert an influence
on the valuation and realisation of
development potential of NAMA assets
and thereby affect the achievement of
NAMA’s purpose and functions.
To date the Committee has had two
priorities:
To consult widely with other1.
interested parties so as to
develop an understanding of
their perspective on a number of
key issues and, thereby, in turn,
inform the NAMA Board’s policies
and strategies.
To enter into discussions with2.
Government bodies and with other
parties, so as to determine how
best to align NAMA’s role with
other public policy objectives.
On its establishment, the Committee
sought and received written
submissions from selected prescribed
organisations listed in the Planning
and Development Regulations, 2006,
including the Irish Planning Institute
who submitted a comprehensive
response. The submissions spanned a
wide range of views covering proper
Analysis

13 Planning Issues, Volume 1, No. 3, Autumn 2011
Analysis
nursing homes, private hospitals,
social and affordable housing, etc.
Commercial Property: As the Irish
economy regains momentum over
the coming years and as investor
confidence grows, demand for
commercial property will improve.
There is, of course, overcapacity in
all commercial sectors at the moment
but there are significant sectoral
and regional variations. For instance,
vacancy rates for city centre office
space in Dublin are falling and with no
completions expected in the short term
and evidence of strong demand from
technology companies and from new
multinational companies, the outlook
for this sector is quite positive. On the
other hand, a pick-up in activity in the
retail and industrial sectors is heavily
dependent on a general resurgence of
economic activity.
Undeveloped land, future development
land and back to agriculture or forestry:
Undeveloped land accounts for 40%
of NAMA loans. The most valuable of
these loans is within, or close to, major
centres of population and will in time
lend itself for development. However,
some land will not be developed and
will revert to agricultural use and
with the outlook for the agriculture
sector much improved in the short
to medium term, there is likely to
be solid demand for agricultural or
forestry land.
Develop Public Sector Land Register
/ Vest Public Sector Land in the
Organisation: NAMA is likely to
support the development of a public
sector land register, which would
enable the State to strategically
assess the potential of its assets.
This would allow for the preparation
of joint masterplans and ultimately
achieve best value for the taxpayer.
Alternatively the State may seek to
vest or sell surplus public sector lands
to the organisation, where it would be
in the interests of the State.
Engagement with Non-Participating
Institutions: NAMA will need to
proactively engage with non-
participating institutions, in accordance
with the approved code of practice, in
servicing, transportation linkages, site
designations, development/energy /
agricultural potential. Assets that are
located in major centres of population
are likely to offer the most potential
for development in the short to
medium term and are likely to be
prioritised.
Use of Unfinished Estates: Whilst
the organisations immediate priority
is to ensure that the estates that
present a health and safety hazard
are remediated, the organisation is
also actively looking at future uses for
surplus stock. On completion of the
DoECLG staff member’s spatial analysis
of the unfinished assets managed by
NAMA, it is hoped that the Department
will have a clear view of the assets
that offer potential for the previous
of social and affordable housing and
the organisation will happily offload
its assets, at the price paid, to Local
Authorities and social and affordable
housing providers, within the confines
of planning legislation and policy
guidance. In the interest of ensuring
sustainable balanced communities and
indeed recouping taxpayer’s money,
NAMA is also exploring mechanisms
for offering residential property to the
market. However, it is acknowledged
that some assets will not readily
lend themselves for the purposes of
social and affordable housing and are
unlikely to be taken up by the market.
In such cases solutions will need to
be employed on a site by site basis,
which will include retrofitting, exploring
alternative uses i.e. community,
sheltered accommodation, etc, and
in some cases demolition, which may
require the relocation of residents
from estates allocated for demolition
to superior property.
Hotels and Golf Courses: Where a
number of NAMA-funded hotels and
golf courses are competing in a
location where there is only potential
for a single facility, NAMA will more
than likely have to make a decision
based on the optimal commercial
outcome. Therefore NAMA will have
to actively consider alternative uses
for hotels and golf courses that are
considered to not be economically
viable i.e. student accommodation,
period of up to 90 days, prior to
open market offering.
Finally, the committee actively sought
and inputted into the process of
recruiting a full time Planner for
the organisation. The organisation
has now recruited Chris McGarry,
who has more than 20 years town
planning experience. He commenced
employment with NAMA in September
2011 and is already hard at work
both providing the organisation
with planning advice in relation to
specific assets, but also putting the
processes in place to ensure that the
organisation plans strategically for the
collective use of its assets nationally
and internationally. Chris has also
been charged with commencing
active engagement with planning
authorities, in relation to assets within
their functional areas, having regard
to proper planning and sustainable
development principles and to NAMA’s
commercial remit.
Future planning consideration for
NAMA and State bodies
Whilst NAMA faces formidable
challenges ahead, it presents an
opportunity to facilitate a “plan led”
rather than a “developer led” approach
to future development in the State.
This will not only enable NAMA to
achieve best value for the taxpayer but
will be in the interest of the ‘common
good’ and represent proper planning
and sustainable development. In order
to achieve such a goal, it requires
collective action from both NAMA and
State bodies. For NAMA’s part, this
might include the following:
Use GIS planning information system
to analysis and plan: Proper planning
is built upon research, analysis and
planning. DoECLG in cooperation with
NAMA are hard at work developing
a GIS planning information system
and on completion later this year,
this tool will be used by NAMA.
NAMA will supplement this system
with all data in relation to existing
assets managed by the agency
and will then undertake a spatial
analysis of the strategic strengths
and weaknesses of assets in relation
to location, zoning, planning history,

Analysis
requirements of proper planning and
sustainable development will need to
measure the cost and the benefits to
society of one-off housing. DoECLG
and local authorities would be
prudent to promote the development
of serviced sites in small villages and
towns and offer housing choice and
help to regenerate rural settlements.
It is recognised that some degree of
need will exist for one-off housing, in
serving the needs of the agriculture
community, but the intensity of such
unsustainable development cannot
persist.
Conclusion
The ultimate outcome of NAMA will
not be known for many years to come,
but if it is to be successful it’s vital
that proper planning and sustainable
development practices are at its core.
NAMA welcomes the engagement of
the planning profession to date and
would welcome continued engagement
with DoECLG, regional and local
authorities and the wider profession.
Alice Charles, MIPI
Alice Charles, MIPI is Director of
Alice Charles Planning and serves
as an External Member of the NAMA
Planning Advisory Committee. This
article has been provided with the
kind permission of the National
Assets Management Agency.
in the future, the DoECLG may have
to consider asking local authorities
to prepare Infrastructure Capacity
Assessments that identify the physical,
social and recreational needs of the
existing and future population and the
cost of realising these objectives. This
would provide an equitable means
of developing costed development
contribution schemes and provide
some degree of certainty in relation to
the cost of development and servicing
development.
4. Brownfield Land Policy
It would be prudent for DoECLG to
promote a Brownfield Land Policy,
which would not only promote the
development of urban “brownfield”
land first, but would provide guidance
on the remediation, planning and
servicing of such sites.
5. Support density
The promotion and achievement of
medium to high densities enables
the delivery of economically viable
infrastructure in tandem with
development and prevents further
unnecessary urban sprawl onto
“greenfield” sites. Therefore DoECLG is
likely to support continued medium to
high densities. Building height is not
necessary to deliver higher density
development. This is evident in the
Georgian areas of Dublin city where
the highest densities of development
are concentrated. In order to achieve
density, consolidation must be the
central theme of local plan-making.
6. Discourage the continued
development frenzy of one off
houses
The cost of providing all public and
private services together with providing
and maintaining infrastructure to
dispersed one-off rural housing is
significantly more expensive and
inefficient than in a village, a town
or a city. In addition, with the surplus
of housing stock in villages, towns
and cities, each one-off house that is
developed provides a further burden
to the tax payer, in that if such
a development didn’t take place,
potentially an asset managed by the
State could be acquired. DoECLG
in embracing the fundamental
order to optimise returns on common
assets and debtors. NAMA also
expects non-participating institutions
to operate in a reciprocal way taking
account of NAMA’s objectives.
Use of CPO Powers: The NAMA Act
provides the organisation with CPO
powers which can be availed of. The
organisation may have to consider
compulsorily purchasing land and
property to facilitate access to assets
or where it is in the best interests of
realising the overall value of assets.
DoECLG, Local Authorities and other
State bodies may consider the
following:
1. Revise and Focus the NSS around
5 Key Cities
Whilst NAMA is a State body with no
direct involvement in the drafting of
legislation or guidance, it is likely to
support any review of the National
Spatial Strategy (NSS) by DoECLG.
The NSS not only needs to prioritise
development around the major
centres of population, but it needs
to provide a strategic framework for
the development of energy, waste and
agriculture, which will act as major
drivers of future growth.
2. Urban Capacity Studies prepared
by Local Authorities when Plan-
making
If DoECLG were to introduce Urban
Capacity Studies, as part of the local
plan-making process, this would be of
great use to NAMA. This would provide
the housing and employment capacity,
empty homes and employment land
and property strategy for a local
authority area, which would be of
immense use in planning for the future
use of assets nationwide.
3. Infrastructure Capacity
Assessments prepared by Local
Authorities, with linked Development
Contributions
Infrastructure development did not
keep pace with development, during
the boom and as a result there
are huge infrastructure deficits,
particularly in relation to water, waste
water, transport, education, health
and recreation. If this problem is to
be not only resolved, but prevented

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