Perhaps the most significant of the recent spate of announcements around the government’s housing strategy was the announcement that NAMA is to build up to 20,000 houses over the next four years.
This confirms a transformation that was already under way: NAMA has shifted from being “Bertie’s bad bank” – a legacy of the previous Fianna Fail government – to Finance Minister Michael Noonan’s pet development agency.
Somewhat fittingly, the agency’s metamorphosis commenced in Dublin’s docklands; Ireland’s financial district has long been a laboratory for some of the worst aspects of urban development policy, from tax incentives for development to light-touch planning regimes.
As NAMA gets ready to embark on an ambitious new life as the nation’s favourite home builder, an examination of just what the agency has been up to in the docklands seems timely.
NAMA’s role in the docklands is linked to the designation of the area as a strategic development zone (SDZ) and the establishment of a dedicated planning scheme and “fast-track planning permission” for the North Lotts and Grand Canal Docks. The area also has 22 hectares of undeveloped land, 75 percent of which is under the control of NAMA.
In July of last year, shortly after An Bord Pleanála’s approval of the docklands planning scheme, Minister for Finance Michael Noonan issued a statement of intent about the future of the docklands. He spoke of embracing the “rare opportunity” presented by such large swathes of undeveloped land in the hands of a “state agency”.
So how have the government and NAMA taken advantage of this rare opportunity? Given the intensity of the current housing crisis, you might think that the focus has been on affordable housing.
With over 40,000 households on the social housing waiting list, chaos in the private rented sector and more than 1,000 homeless children in Dublin, surely nothing is more important than providing urgently needed new homes?
In reality, affordable housing appears to be anything but a priority under Ireland’s largest development project. Across the SDZ, the use mix will be split between commercial (office and retail) and residential space on a 50:50 basis.
That’s an even higher concentration of office space than under the previous Dublin Docklands Development Authority planning regime, which Dublin City Council has itself criticized for producing a “mono-use office environment”.
However, it’s even worse than it looks: bear in mind that “residential” includes everything from newsagents and cafés to laundromats and crèches.
In terms of actual housing units, Dublin City Council anticipates the construction of approximately 2,600 units.
As in the case of NAMA’s house building adventure more generally, only 10 percent of these units will be earmarked as social housing. More worrying still is the nature of much of the new housing.
The focus on luxury apartments will not be welcomed by the hundreds of thousands of households in Dublin struggling to keep roofs over their heads.
Oxley Holdings, the Singapore-based developer who in conjunction with the Irish Ballymore Group will develop the NAMA site on North Wall Quay, describes itself as “a lifestyle property developer that caters to the upwardly mobile homebuyer and entrepreneur”.
LA-based property firm Kennedy Wilson have teamed up with NAMA for the Capital Docks development, which they describe as a “destination address”. Like Oxley, their focus is on “high-quality, stylishly finished apartments”.
Given the chronic problems of what have been euphemistically termed “governance issues” under the previous Dublin Docklands Planning Authority (DDDA), one might also think that transparency and accountability would be prioritised in the latest round of development.
Once again, the opposite is the case. The SDZ’s “fast-track planning” system means planning decisions cannot be appealed and no meaningful community participation forum has been established, despite the fact that construction has already begun on several sites.
Meanwhile the real power broker in the docklands, NAMA, is notoriously secretive, and has been described by a TD as stonewalling the Public Accounts Committee. and is not subject to the Freedom of Information Act.
NAMA’s real focus in the docklands is commercial office space. A quick look through the submissions of land holders (including NAMA) to the An Bord Pleanála review of the planning scheme reveals that this is what all the powerful players in the area want to build and for a simple reason: it’s most profitable.
NAMA is also keen on office space because this is what the “international investors” (read: US private equity firms and hedge funds) it sells to are most interested in.
But while profit appears to dictate, it is worth recalling that this is not being driven by the market but by a state agency: NAMA. As well as holding a huge amount of real estate in the area, NAMA is financing development, lending to buyers and potentially even financing infrastructure.
Indeed the “bad bank” plans to pump up to €1.5 billion of development capital into the area (more than double the total social housing budget nationally). There has been much discussion of NAMA flogging cheap assets to global “vulture funds”. But in the case of undeveloped land in the docklands, something more complex is happening.
NAMA is partnering with global funds and thus retaining a degree of control over development. The Capital Docks development, the Reveal development and the site at 6-8 Hanover Quay are all being developed under joint ventures between NAMA and a global firm.
Meanwhile the North Wall Quay development was awarded to Oxley/Ballymore but under a contract that will see NAMA retain the “freehold lease”. This grants the developers the right to develop the site, but allows NAMA to retain a degree of control and a cut of the profits.
The Boland’s Mill project is being directly financed by NAMA and overseen by the NAMA-appointed receiver (Savills). By maintaining some control, NAMA can ensure development commences immediately, thus fulfilling its promise to kickstart a “revival of the property market”.
From the government’s point of view, this not only bolsters the chances of NAMA returning a profit, it also provides the “Grade A” office space sought after by global companies. The focus on office accommodation is indicative of the extent to which NAMA has become the Department of Finance’s pet development agency: an instrument through which the central government can use urban development in an attempt to bolster the national economy.
But the total subordination of urban development to property speculation and national economic policy rather than the needs of the city was a hallmark of the bubble.
While we sometimes think of the bubble as driven by house prices and characterised by poorly developed estates in places like Longford and Leitrim, in reality some of the worst of excesses of the boom years related to commercial real estate in Dublin’s business districts.
The Irish Glass Bottle Company site in the docklands is perhaps the most famous of many. It was bought at a price of €16.5 million per acre during the boom, but is subsequently thought to have dropped in value by 90 percent.
There is nothing wrong with building offices, of course. But there is something deeply wrong with the use of one of the state’s most precious resources (large tracts of centrally located, undeveloped land) and the financial firepower of a public agency (NAMA) to build “Grade A office space” and luxury apartments.
It is reminiscent of the hyper-commercial approach which marked the worst excesses of the bubble years, a fact that is all the more worrying given that the NAMA appears to be the centerpiece of the government’s plans to address the housing crisis. But what’s happening in the docklands is above all a missed opportunity.
The reality is that we are currently confronted with manifold urban crises. Housing, infrastructure, environmental sustainability, transport, decent employment and public space – all of these areas require radical rethinks and significant resources to confront the challenges of the 21st century.
The docklands might have served as an urban laboratory within which to reimagine the city. It was a chance to put talk of creating thriving communities and rich urban environments in the heart of the city into action.
Instead, we are witnessing another round of finance-driven urban development, a fact which speaks to the current poverty of imagination and ambition among those who hold the levers of power in our city.
CORRECTION: This article was corrected on 4 Dec at 1.14pm to delete the statement that NAMA does not come under the Freedom of Information Act. Since April, it has done. We apologise for the error.