Housing crash, ghost estates haunt Ireland
Nothing more typified Ireland’s roaring economy a decade ago than its soaring housing market. And nothing better illustrates the complexity of cleaning up after the bursting of that bubble than what to do with thousands of homes that were never finished or proved to be substandard.
The New York Times
ATHLONE, Ireland — The demolition getting under way here recently was in a housing complex where a 2-year-old, probably chasing a dog, had climbed through a fence last year and drowned in a pool of water behind a dozen partly constructed homes.
John Burke, hired to do the job, marveled that the half-built houses he was about to bulldoze had once carried a price tag of more than $450,000. He estimated that he was about to grind about $500,000 worth of abandoned construction into gravel.
“You can’t do anything with these houses,” he said, as his workers made neat piles of the billboard posters surrounding the complex that had once promised idyllic living. “The cost to finish them would be too high. There is no market like that here. There are no jobs. And leaving them unattended is dangerous.”
Nothing more typified Ireland’s roaring economy a decade ago than its housing market, which saw prices and construction surge. And nothing better illustrates the costs and complexities of cleaning up after the bursting of that bubble than what to do with the thousands of homes that were never finished or, if they were occupied, have proved to be substandard.
Other countries with similar problems, like Spain, are also dealing with the issue, but none has gone as far as Ireland, which is aiming to tear down about 40 troubled developments by the end of next year, with more demolitions possible in the future, officials say.
But in a nation that by the government’s estimate still has 1,300 so-called ghost estates and possibly hundreds of thousands of unoccupied new homes, the razing program is only nibbling at the problem. The pace of development was so huge in the 2000s that at one point per capita housing completions were four times as high as in the United States.
During that time, Ireland allowed a kind of honor-code building inspection. The result is that many people paid high prices for houses that are fire hazards or sinking into bogs or are built with faulty foundations or missing drainage systems, a problem that is even harder and more expensive to solve.
In nearby Ballymahon, Debbie Cox paid about $255,000 for her semidetached house in 2005. But when it rains hard, the smell of sewage outside her home has sometimes been overwhelming. She gave away her garden furniture because it kept sinking into the mud in her backyard. Her water pipes, buried too close to the surface, have frozen in very cold weather.
Cox doubts that she could get more than $95,000 for her property today. Most of the other homes in her housing complex, Hawthorn Meadows, about two hours by car from Dublin, have been rented for about $500 a month, while she pays about $1,100 a month for her mortgage.
“I don’t think Ireland is fixed,” she said one recent evening. “Not at all. What about people like us?”
Overall, Irish property prices remain nearly 50 percent below their peak in 2007. Even on the outskirts of Dublin it is easy to find housing developments with many vacancies. Most of those who do live in them are renters. In many cases, they have views of half-built houses surrounded by chain-link fences.
Lots of empty homes
Not all the news about Ireland’s real-estate market is bad. As Ireland becomes the first eurozone country to officially emerge from an international-bailout program this month, experts say that demand for homes is up in Dublin, particularly for houses in certain neighborhoods.
But most of the ghost estates are in western or central counties including Cavan, Donegal, Roscommon and Longford, often in the countryside where developers received tax incentives to build and where the effects of the economic crisis are still plain to see. Village main streets are full of boarded-up stores. And the local authorities are frustrated.
County Longford, where Cox lives, received about $1.4 million from the central government to make repairs in developments like hers last year. But Brian Ross, the county’s senior executive engineer who is in charge of troubled housing complexes, says he needs at least 10 times that much to “sort out half of it.” The county’s jurisdiction is only over the public spaces. And there is no money for issues inside the homes, like a lack of insulation.
An estimated 12,500 homeowners are also dealing with pyrite damage, a substance that creates destabilizing cracks and deep fissures in foundations, walls and ceilings and was widely used during the boom. The bill for the 1,000 worst cases is expected to be about $70 million.
The National Institute for Regional and Spatial Analysis at the National University of Ireland in Maynooth concluded in 2010 that there were more than 300,000 vacant new homes in Ireland, and 621 housing developments with more than 12 houses that were either unoccupied or not fully built.
More recently, government officials identified about 2,000 unoccupied or incomplete developments. Since then, officials said, remedial measures have reduced the number to about 1,300. About 40,000 households live in them. But even when housing complexes have been identified as unlikely to ever be completed or inhabited, tearing them down may not be so easy. Many of them are tangled in lawsuits and bankruptcy proceedings.
In Longford, troubled housing complexes abound, Ross said. One part of a development sinking into a bog has been torn down. But nearby, the rest of it looks in sorry shape. Even from the outside, the houses of Gleann Riada show signs of mold. Tall weeds are growing in some of the gutters.
One homeowner there said that the local authorities had recently paved the road and put in surveillance cameras. But for a time, he said, the sewage system was in such a bad state that methane gas was collecting under the houses. There were two explosions, and residents were told not to close their windows, even in winter, and not to light any fires.
“What can you do?” the homeowner said, declining to give his name because his neighbors might be angry at him for talking about problems in the complex. “You just have to make do.”