I have written recently how Ireland’s dysfunctional planning system exacerbated its housing bust by granting planning permits too late in response to rising demand, resulting in the hastened building of large numbers of standardised, small, poor quality homes in satellite locations far away from the major cities.
According to Quartz, Ireland is now beset with some 1,300 damp, rotting, unfinished housing developments beyond the fringes of its cities and towns similar to the one pictured below:
Now, the Irish Government has announced plans to demolish 40 vacant developments over the next 12 months. There were reportedly around 2,800 abandoned projects in 2010, suggesting the Government is slowly making headway into the problem. The estates being demolished were found to have no viable financial future, owing to their remote location, poor condition, and lack of demand.
The Irish situation is an extreme example of the pernicious impacts of restrictive urban planning. Not only did Ireland’s urban containment policies, which are modeled on those of the UK, fail to reduce sprawl (in fact they increased it), they exacerbated the housing bubble and bust, taking down the Irish economy in the process via gross malinvestment, and leading the Government to take a 67.5 billion-euro bailout.
There are lessons here for other nations.
