the value of the phrase ‘the value of your investment may fall as well as rise’ hit home at county hall last week where the cost of the property bubble to Laois County Council was revealed to county councillors.
At their monthly meeting councillors were told that land bought for public housing for €4 million during the boom by Laois County Council will be handed over to a Government agency to avoid the council having to repay multi-million euro loan repayments.
In a NAMA-like deal, four pieces of land in Portlaoise, Rathdowney, Doonane and Durrow have become the property of the Housing and Sustainable Communities Agency “for a consideration of €1 each.” The money to buy the land was originally borrowed by the council from another State agency. Despite the transaction councillors were also told that some of the land could yet end up being used by local authorities.
Announcing the move the County Manager, Peter Carey also rejected a suggestion that the council had become property speculators during the boom, by paying high prices for land.
“I absolutely reject any suggestion that we were speculating. We were being driven to purchase land. I stand over and am very proud of our record for housing. It’s first class. We were being proactive, acquiring land and driving development. We are in a very different position than we were five or seven years ago.
“Now we are subject to a fundamental shift in government policy, We have serious loans, this is an opportunity to get these loans off our books, it would be a huge mistake not to do it,” he said.
He was responding to Cllr Brendan Phelan about the handover to the Housing and Sustainable Communities Agency of a total of five hectares of land in Portlaoise, Doonane, Rathdowney, and Durrow.
“This is the first day we know what that land cost. Here we are today finding out that Laois County Council were complaining about speculators and were speculating themselves. Five hectares of land at three quarters of a million per hectare. In the most expensive times, land only made that in Dublin. Never could that have been justified. We had no say in the purchase,” Cllr Phelan said.
He was concerned about the two hectares of land in Rathdowney, on Golflinks Road.
“Half was disposed of this time last year, the reason given that half was to be left for social housing for the people of Rathdowney. Today we are preparing to dispose of the other half. It’s a sad day,” he said.
Gerry Murphy, head of finance told Laois county councillors that the annual interest would amount to €112,000 at the current rate of 2.8 per cent, if the council did not hand the lands and their loans over.
Several cllrs queried about the possibility of houses being built.
“Ownership will pass over to the new agency. We as a council can’t give a guarantee what it will be used for. However, their letter says it may still be available for use by local authorities, subject to approval,” Mr Murphy said.
Cllr Catherine Fitzgerald was the only voice against the handover.
“There is no fairy godmother here today, it still has to be paid for, only by central funds, there is no write-off. One of our main functions is housing and we are now handing over another section to central government. This is the nail in the coffin for local authorities,” she said.