De-Zoning : Do the NAMA guesstimates cover this ?

Liam Byrne

An article in today's Examiner says that An Bord Pleanala has warned that land currently zoned for development should be "de-zoned".

I've got a problem with this, as it will mean that An Bord Pleanala will be conflicting with the aims of NAMA.

Example

1) Land on a supposed relief "ring-road" zoned for development
2) Developer buys the land for, say €10,000,000
3) NAMA buys that loan for €6,000,000
4) Land "de-zoned" and is now worth €100,000
5) NAMA now can't sell that for anything remotely close to even their buying price

Yes, we all know of cases where numbers 1 & 2 strangely happened in the other order, so the loan would only be the €100,000 - but suppose the above were the case ?

What happens then ?

fly_agaric

Liam Byrne wrote: »

I've got a problem with this, as it will mean that An Bord Pleanala will be conflicting with the aims of NAMA.

Example

1) Land on a supposed relief "ring-road" zoned for development
2) Developer buys the land for, say €10,000,000
3) NAMA buys that loan for €6,000,000
4) Land "de-zoned" and is now worth €100,000
5) NAMA now can't sell that for anything remotely close to even their buying price

If the land should never have been zoned for development in the first place is it not better that it just revert to a more useful purpose (farming) that will generate (at least some!) money for the country? A bubble ends up by destroying wealth/wasting resources. There's no getting around it really.

Liam Byrne wrote: »

What happens then ?

I suppose everybodys' favourite patsies (PAYE shelps) will just have to be good for it at some point.

Liam Byrne

fly_agaric wrote: »

If the land should never have been zoned for development in the first place is it not better that it revert to a more useful purpose (farming) that will generate (at least some!) money for the country?

No argument there - my question is purely on the financial / policy impact of this on us.

i.e. whose priorities will take precedence (An Bord P or NAMA) and does the proposed "profit" that Lenihan & Cowen announced today take multiples of the above scenario into account ?

herya

Liam Byrne wrote: »

i.e. whose priorities will take precedence (An Bord P or NAMA) and does the proposed "profit" that Lenihan & Cowen announced today take multiples of the above scenario into account ?

I'm afraid that it may be the flavour of politics from this autumn on - whatever you do, you think what it does to NAMA first... and then you don't do it.

The Raven.

An Bord Pleanala has been talking about this for some time now. I sincerely hope that NAMA doesn't get in the way. So much destruction has been done by ruthless, greedy developers, aided by councils all over the place, with excessive amounts of land rezoned from agricultural and amenity to residential and commercial. This all needs to be rezoned back to it's original status.

The only thing that brought this obsessive development to a halt was the recession, but these vultures haven't gone away. They are still submitting hugh planning applications, lately in piecemeal fashion, and biding their time.

Mr. Incognito

Does it matter- zoned or not this land will never be built on for years and years if ever

The valuations have been provided to the government- BY THE BANKS!!

This is a joke and a scandal. NAMA is going to bankrupt this country imo so we're arguing over nothing. This land is worthless, zoned or not won't really affect it.

PJW

The Raven. wrote: »

An Bord Pleanala has been talking about this for some time now. I sincerely hope that NAMA doesn't get in the way. So much destruction has been done by ruthless, greedy developers, aided by councils all over the place, with excessive amounts of land rezoned from agricultural and amenity to residential and commercial. This all needs to be rezoned back to it's original status.

The only thing that brought this obsessive development to a halt was the recession, but these vultures haven't gone away. They are still submitting hugh planning applications, lately in piecemeal fashion, and biding their time.

I would assume that planning applications are being made on these parcels of land because the "owners" are scared that the land might be de-zoned and any remote chance that they had of building might be lost forever.

Also if building has not started on a site within 5 years of its agreed planning date then a new application will have to be made, I cant see many CC agreeing planning application again when so much unfinished developments are littered throughout the country.

Once again NAMA should not have anything to do with loans for green field sites (estimated at 30% of the €54B) they may aswell put €15B in a hole in the ground.

The Raven.

PJW wrote: »

I would assume that planning applications are being made on these parcels of land because the "owners" are scared that the land might be de-zoned and any remote chance that they had of building might be lost forever.

It could be that, or they might be trying to raise the value of the land by getting planning permission for it. Either that or they might just be stubborn enough to wish to continue with the development lunacy to which they had become accustomed.

Also if building has not started on a site within 5 years of its agreed planning date then a new application will have to be made, I cant see many CC agreeing planning application again when so much unfinished developments are littered throughout the country.

There is talk of extending the ‘5 years’ to 10 years, which is really bad news. I know it is hard to imagine the councils giving planning permission in light of the current situation, but unfortunately, THAT IS WHAT THEY ARE DOING! The councils are even going against many of their stated objectives, and major local opposition, without batting an eyelid. Perhaps they are granting permission for the sake of the development fees, as developments are fewer on the ground. All of these planning applications end up with An Bord Pleanala, which now has a colossal backlog.

We have another scenario – Local Development Plans, which include these large new ‘town centres’ and even more excessive, residential developments. The developers are already in cahoots with the councils before these plans are drawn up.

Once again NAMA should not have anything to do with loans for green field sites (estimated at 30% of the €54B) they may aswell put €15B in a hole in the ground.

I don’t know what the figures will be or how they could be estimated, and I have serious concerns about NAMA, but some of these developers still have a lot of wealth, some of it blatantly transferred into their wives’ names etc.

Seth Brundle

But sure they would be fools not to have costed this in and they said that NAMA would make us €5bn - we can't lose!






Oh wait!

K-9

In a strange way, depending on how much they de-zone, it would make the remaining zoned land artificially more valuable!

I presume the type of land I'm thinking they would de-zone would be better of and more valuable as Agricultural Land anyway.

As for the ones who bought Agricultural land hoping it would be rezoned...............:eek:

Liam Byrne

K-9 wrote: »

As for the ones who bought Agricultural land hoping it would be rezoned...............:eek:

Well, I didn't reference them in the original post (it was about de-zoning, rather than re-zoning) but since the loans are out to developers who did this, too, even though the amounts might be smaller, those are likely to be paid off by NAMA too...... :rolleyes:

marco_polo

Doesn't specifically mention zoning but this account of an Oireachtas committee meeting implies that such a scenarios would be taken into account. I am making the (not too unreasonable?)assumption that land unlikely to be developed on is most likely to be de-zoned.

http://www.independent.ie/national-news/well-just-pay--farm-prices-for-land-says-nama-expert-1874371.html

Addressing an Oireachtas committee yesterday, John Mulcahy, on secondment as the agency's independent property valuation expert from consultants Jones Lang LaSalle, said: "There is a real issue that there are many rural areas where land dramatically exceeds any supply (need) for the foreseeable future."

He said that a lot of this land would revert to agricultural values. "That's what we'll pay for it."

Liam Byrne

marco_polo wrote: »

Doesn't specifically mention zoning but this account of an Oireachtas committee meeting implies that such a scenarios would be taken into account. I am making the (not too unreasonable?)assumption that land unlikely to be developed on is most likely to be de-zoned.

Cheers Marco; at least someone involved seems to be thinking about the "devil in detail" of this proposal.

Guess that answers the thread in its entirety, so. I was afraid those pushing NAMA wouldn't have even considered it, thereby making bad valuations worse.

K-9

Liam Byrne wrote: »

Well, I didn't reference them in the original post (it was about de-zoning, rather than re-zoning) but since the loans are out to developers who did this, too, even though the amounts might be smaller, those are likely to be paid off by NAMA too...... :rolleyes:

Just threw that one in there.

Any thoughts on my other, more relevant points? Land being more valuable as Agricultural land has been pointed out already, not just by Marco on this thread!

Indeed some "developments" maybe more valuable demolished and cleared as they have no hope of getting any return in the foreseeable future.

daithicarr

is it perhaps an attempt to reduce the amount of and available for development, in order to try and increase the value of the land which is still eligible for development and possibly that which is developed as the supply has decreased ?

And is Nama waiting for land prices to increase to or near their old peaks?
is that something which we want as a nation and is beneficial to ireland ?

K-9

daithicarr wrote: »

is it perhaps an attempt to reduce the amount of and available for development, in order to try and increase the value of the land which is still eligible for development and possibly that which is developed as the supply has decreased ?

And is Nama waiting for land prices to increase to or near their old peaks?
is that something which we want as a nation and is beneficial to ireland ?

Far too much land has been rezoned so it does make sense to dezone some. There is so much rezoned I don't know if it would have a substantial impact on the value of the remaining zoned land.