Abdul Rahman El Assir – Overzoning Problem in Ireland Still Unraveling

The decision is in: Ireland’s Department of Environment will start counting the vacant units created by the housing boom/bust cycle that just imploded. Once the count is finished, the Planning Institute will have more of the information they need to begin to unravel this housing knot. But how did it come to this? Where did Ireland drop the ball?

Part of the problem lies with the county councils. With the exceptions of Limerick and North Tipperary, local bodies turned agricultural land over for use by development and construction companies in large amounts. On average, the land use allowed would mean housing could be built well into 2016. However, there is almost zero demand for these units among people looking to buy. At least that’s the conventional wisdom.

One man has a different take on things. Noel Frisby owns Frisby Construction. His company has been in business for 23 years, and he’s decided to keep on building and selling homes. His Fairfield Park, Greenfields, and Templar’s Hall communities are already sold out, and there are more developments pending. While the profits are not enormous, the company seems encouraged by people’s response.

Meanwhile, the Irish government, local nonprofits, and some developers are working together to explore other options. At the Irish Planning Institute’s national conference, developer Bill Nowlan presented one possible solution. There are over 56,000 units needed for subsidized housing in Ireland today, even as that program faces funding cuts. During his talk, Nolan said, “There is something incongruous and offensive about having a huge need for housing and simultaneously having a huge oversupply of empty houses.” While acknowledging that there is no easy answer, he encouraged all those present to take advantage of the situation to explore creative answers to the subsidized housing shortage.

As Ireland works to unravel the housing overload, county councils actions are going to come under much greater scrutiny. The hope is that the Department of Environment’s survey will be finished this summer. After that, the Green Planning Minister and other government departments will be able to use the information to begin formulating solutions. As of now, county councils have been given twelve months to get back in line with zoning regulations.

Germany Holds Election for Chancellor

On Sunday a region of Germany, North Rhine-Westphalia, held an election that will determine the future of Germany’s Chancellor Angela Merkel.

North Rhine-Westphalia has the most population of any German state. The region includes the cities of Cologne and Duesseldorf along with the industrial Ruhr territory. 13 million people were able to vote in this test for Merkel’s national government. The federal government and North Rhine-Westphalia are ruled by a center-right coalition of parties.

By the end of the day on Sunday, Merkel’s coalition failed and will lose its majority in Germany’s parliament’s upper house. This upper house represents the 16 states in Germany and has to approve any major legislation. Polls had indicated that the center right coalition would have a tough time getting reelected. The polls were right.

Chancellor Merkel’s coalition had not started off too well. There has been on going arguing over policy issues and Germany’s response to the Greek financial crisis. The loss in North Rhine-Westphalia will make it difficult for Merkel to run Europe’s biggest economy. It will complicate her efforts to pass tax relief to jump start Germany’s economy.

Merkel’s Christian Democrats and their partners won only 40% of the vote. The Christian Democrats won only 34.5% of the vote, which was 10 points less than they won 5 years ago. This leaves them well short of a majority. The opposition, Social Democrats won more than 34%, while the Green party won about 12.5%. It is unsure as to who will govern in the North Rhine-Westphalia state. The Social Democrats and Greens might try to team up with the Left Party which won 5% of the votes.

Juergen Ruettgers, a conservative, is the current governor of North Rhine-Westphalia. It is uncertain if he can retain power or if not, who would replace him.

With the loss in North Rhine-Westphalia, Merkel’s power has been diminished. The leader of the Free Democrats, one of Merkel’s allies, Guido Westerwelle said that the warning shot from the people has been heard and the parties will work to earn back the people’s trust. Westerwelle is the Foreign Minister, his party won 6.5% of the vote.

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