Unsustainable land management and economic crisis: Insights from Spain

In a previous post, I outlined some key similarities and differences between thecurrent housing crises in Ireland and Spain. Many of the underlying economic and socio-demographic structural factors would indeed appear to be striking similar in both countries. A recent paper by Professor Juan Romero (Inter-university Institute for Local Development and Department of Geography, University of Valencia) and co-authors published in Environment and Planning: C, provides further insights from a new institutionalist political science perspective into the governance failures leading to the speculative property bubble and subsequent crash in Spain.

The authors highlight the importance of ‘informal rules’ in institutional processes related to land management and spatial plannning. Following Ostrom (1998) they refer to a ‘second order collective action dilemma’, where shared expectations of foul play on the part of other actors, influences the behaviour of rational actors to the extent that each individual has something to gain from acting corruptly or turning a blind eye to certain practices. Clear parallels to the Irish case, are of course, evident here.

More concretely, the authors note that the official designation of land as ‘fit for development’ through formal planning processes had immeadiate economic as well as legal implications for the landowners and local and regional property markets. Again the parallels to the Irish case, where specualtion over land-use zoning led to serious corruption are strikingly clear. In both cases, the politics of planning and urban development has been significantly influenced by soft institutional factors which have undermined the capacity for land management processes to effectively serve the public interest.

Academic and policy debates on the causes and consequences of the current economic crisis need to consider the soft institutional aspects which have contributed to serious governance failure in land management at local regional and national scales in Europe. The search for and development of new approaches to sustainable land management furthermore requires a critical, comparative evaluation of the faiures of exsiting governance models. These cases can often prove as insightful as cases of good or best practice!

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Ireland is not Unique: Learning from the Spanish Housing Crisis

First published on Ireland After Nama

Commentary on the current housing crisis in Ireland has placed significant emphasis on what are often perceived as peculiarly Irish problems of clientelism, cronyism, localism and poor regulation leading to the overextension and subsequent collapse of the property market and a massive oversupply of housing. Comparison with the parallel experience of overinflated housing markets and subsequent collapse in Spain may in this context prove insightful.

The bullet-points summary below is adapted from an article in the International Journal of Urban and Regional Research published in December 2010– Garcia, M. (2010) The Breakdown of the Spanish Urban Growth Model: Social and Territorial Effects of the Global Crisis.

  • Europeanisation and globalisation led to an average yearly growth rate of GDP of 3.5% between 1994 and 2007;
  • This period of economic boom was accompanied by a high rate of in-migration, with foreign migrants concentrated in Madrid and along the Mediterranean coast, where the labour market was expanding;
  • EU funds supported the modernisation of transportation infrastructure, improving accessibility across the country and reducing disparities between richer and poorer regions;
  • Population increase due to a 1970s housing boom, coupled with high net in-migration, trends of declining average household size and increased disposable incomes,  contributed to a high demand for housing, particularly owner-occupied housing in suburban locations;
  • The housing boom was fuelled by the unprecedented availability of cheap credit from international markets;
  • Optimism combined with fear of future price increases encouraged housing acquisition and led to a rapid rise in the level of private debt;
  • The rate of housing development exceeded the rate of population growth in many Spanish cities throughout the 2001-2008 period;
  • The housing boom was facilitated by government incentives for both developers and house buyers;
  • Second homes and speculative investments accounted for a very significant proportion of the housing market;
  • A segmented housing market developed strengthening social inequalities with problems of affordability for young aspirant home owners in particular;
  • Local and regional administrations actively made land available for development, irrespective of spatial plans, with a view to increasing the local tax base;
  • The level of oversupply in 2010 amounted to approximately 1 million housing units, 600,000 of which are newly constructed;
  • Levels of unemployment in the construction sector are around 30%;

While there are striking similarities, there are key differences in the response to the crisis by government and the banking sector. In particular, Spanish banks have taken an active role in the property market, selling houses at discounted prices and developed innovative mechanisms to restructure the mortgage debt of households whose employment circumstances have deteriorated.

It would appear that there is significant potential for cross-national learning between Ireland and Spain, both in terms of disentangling local, European and global causal factors (in as much as this is possible or useful) and in terms of coming up with solutions and ways forward. We cannot fully understand post-crisis Ireland without an appreciation of similar experiences elsewhere.

Mapping the true extent of Dublin’s functional urban region – What the best available evidence tells us

Originally published on Ireland After Nama

As reported in an editorial in today’s Irish Times, a special issue of the Journal of Irish Urban Studies has just been published, presenting work of the Urban Environment Project, a large-scale, multi-insitutional and multi-disciplinary collaborative research project led by UCD Urban Institute Ireland and funded by the Environment Protection Agency. Issues addressed by the special issue include biodiversity, city-regional governance, office location patterns simulated coastal flood risk and spatial planning. All articles in this issue are available to download here. The analysis below is extracted from one article of this special issue.

The spatial extent of Dublin’s functional urban region or commuting hinterland has served as a key indicator and point of discussion on the ‘sprawl’ of Dublin and extent of uncontrolled urban expansion over the Celtic tiger period. The location of unfinished and partially vacant housing estates in some locations suggests that private developers significantly overestimated the extent of the ‘Dublin market’. The analysis below serves to map the spatial extent of the Dublin functional urban region and identifies the share of the Dublin workforce commuting from the Mid-East Region (Kildare, Meath and Wicklow) and beyond.

The spatial extent of the Dublin Functional Urban Region and Economic Core Area is derived from 2006 Census of Population data. The Place of Work Census of Anonymised Records (POWCAR) subset of the 2006 Census of Population, allows for a direct assessment of employment density at a fine spatial scale and a direct matching of origin and destination data for the analysis of commuting flows. The Dublin Economic Core Area, as shown in Figure 1 comprises all EDs where employment density is at least 7 jobs per hectare (700/km2) within the four Dublin counties.  The ECA includes approximately 406,000 people at work and 525,000 residents in 159 EDs and covers an area of 150.0 square kilometres (km2). In addition to the traditional Commercial Business District (CBD) large suburban nodes including Blanchardstown, Swords, Dublin Airport, Tallaght and Sandyford, indicating the increasingly dispersed and polycentric pattern of employment distribution within the city

Figure 1: Dublin Economic Core Area. Source: Census of Population 2006 POWCAR dataset OSi boundary datasets, OSi permit no. MP009006(c) Government of Ireland

The spatial extent of the Dublin Functional Urban Region (FUR) is subsequently defined in relation to the ECA. The inclusion of EDs within the FUR is determined by two criteria:

  1. At least 10% of workers resident in the ED work in the Dublin ECA
  2. 50 workers, resident in the ED work in the Dublin ECA

The criteria outlined above, are selected to reflect the actual spatial extent of the FUR based on daily commuting flows (Figure 2). In total 454 EDs are included within the 2006 FUR. The total FUR area covers 4,138 km2. For comparative purposes the spatial extent of the Dublin Sub-Region as defined by the ERDO strategy on the basis of 1981 data is shown in Figure 6.12. The area of the Dublin Sub-Region (2,016 km2) is less than half that of the 2006 FUR. Differences in methodology preclude further inferences to be drawn regarding the spatial expansion over the 1981-2006 period. With the exception of Togher, Calary and Altidore, located in north Wicklow, all EDs included in the ERDO sub-region are also included in the 2006 FUR. The principal contiguous area of the 2006 FUR extends to include all of the Dublin Region and large parts of northeast Wicklow, northeast and central Kildare, south and east Meath and southern Louth.  Urban centres located at some distance from the principal contiguous area but included within the FUR include all or parts of Dundalk, Kells, Portarlington, Borris, Athy Baltinglass, Arklow, and Gorey. It should be noted that the spatial extent of the FUR as defined here is less than that defined by Williams et al. in the Society of Chartered Surveyors commissioned study (published in 2007). The FUR has not contracted between 2002 and 2006. Rather, improvements in data availability and methodological changes have allowed for a significantly more accurate assessment of the spatial extent of the Dublin Functional Urban Region. In total approximately 388,000 workers resident in the FUR in 2006 commuted to work in the Dublin ECA. This is however only 52% of the total number of resident workers in the FUR, indicating the continued significance of smaller dispersed centres of employment.

Figure 2: Dublin Functional Urban Region. Source: Census of Population 2006 POWCAR dataset, OSi boundary layers, OSi permit no. MP009006(c) Government of Ireland, ERDO Eastern Regional Settlement Strategy (1985).

A county and regional level analysis of the workforce in the Greater Dublin Area is provided in Tables 1 and 2 below. The Greater Dublin Area workforce (defined by place of work) is composed of workers commuting to a fixed place of work (‘commuters’), those working primarily at home (‘home’ workers) and those with no fixed place of work (mobile’ workers). In this analysis mobile workers are excluded as their principal county of work is unknown. Almost 70,500 mobile workers are recorded with places of residence within the Greater Dublin Area. This compares to a total of 626,162 commuting to work in the GDA and 25,968 working from home in the GDA.

The statistics in Table 6.2 include both commuters and home workers. The place of work of home workers is determined by their place of residence. The total number of jobs in the Dublin Region (525,204) was significantly higher than in the Mid-East Region (126,886) in 2006. Comparing with total population figures, however, provides a more meaningful basis for comparing the regional distribution of employment. There were approximately 442 jobs per 1000 population in the Dublin Region, compared with 267 jobs per 1000 population in the Mid-East Region.

Table 1: Greater Dublin Area workforce classified by place of work and place of residence, 2006, Source: Census of Population 2006 POWCAR dataset

In total 82.6% of those at work in the Dublin Region were resident within the Dublin Region[1]. An additional 13.4% are recorded as commuting from the neighbouring Mid-East Region. By comparison 77.6% of those at work within the Mid-East Region were resident within the Mid-East Region. 11.4% of those at work in the Mid-East Region commuted from beyond the Greater Dublin Area, a significantly higher proportion than for the Dublin Region. In total 35,845 workers are recorded as commuting from beyond to the GDA to places of work within the GDA. This figure, however, represents only 5.5% of the total workforce in the GDA.

Region of residence of GDA workforce, 2006 Data Source: Census of Population 2006, POWCAR dataset

Williams, B. Walsh, C. & Boyle, I. (2010) The Functional Urban Region of Dublin: Implications for Regional Development Markets and Planning, Journal of Irish Urban Studies, vo. 7-9, p. 5-30.

Please reference the published version!

Note: the research was conducted as part of the Urban Environment Project, hosted by UCD Urban Institute Ireland and funded by the Environment Protection Agency. The author’s access to the Census of Population POWCAR dataset was possible by kind permission of the Central Statistics Office.
 
 

[1] If mobile workers are assigned to their region of residence, this figure increases to 84.0% for the Dublin Region with a corresponding figure of 81.4% for the Mid-East Region.

Undersupply and Oversupply in the Irish Housing Market: A Closer Look at the Greater Dublin Area

Originally Published on Ireland After NAMA

The NIRSA Working Paper, A Haunted Landscape’ provides an analysis of the current situation of oversupply in the Irish housing market, focussing in particular on the uneven geography of housing development and so-called ghost estates as a very visible and tangible manifestation of the housing crisis.

Ronan Webster of CB Richard Ellis, speaking at the Irish Planning Institute Autumn Conference last week characterised recent trends in housing development in Ireland in terms of a shift from a perception of undersupply to a perception of oversupply. Indeed the Bacon reports of the late 1990s and much official and academic commentary since have pointed to a situation of very significant undersupply in the Dublin Region in particular. It has been widely argued that the undersupply in the Dublin market has contributed to the displacement of urban-generated residential development to the Mid-East region and further afield in ‘Outer Leinster’ (see Society of Chartered Surveyors Housing Study).  A Haunted Landscape, in the contrast, finds that residential development in Dublin City and Dun Laoghaire Rathdown (and Cork City) was far in excess of demand, while housing in Fingal, Kildare, Meath, Wicklow and South Dublin was ‘in line with demand’.

Clearly different notions of undersupply (and by inference optimum supply) are at play here. From a social equity or planning policy perspective it is evident that there was an undersupply of suitable residential development in Dublin City and Dun Laoghaire Rathdown. This undersupply coupled with highly inflated and unaffordable prices inevitably contributed to the displacement of housing development beyond the boundaries of the Dublin metropolitan area. The characterisation of the housing situation in Dublin as one of oversupply betrays the influence of reductionist economics thinking but also reflects a spatial blindness. Housing supply in Dublin and Dun Laoghaire Rathdown cannot be understood in isolation from the analysis of housing supply in the Mid-East Region and wider Dublin housing and commuter catchment areas.  The high demand for housing in the Mid-East Region and associated unprecedented pace and scale of development over the housing boom period may in large part be understood as the consequence of the undersupply of appropriate (i.e. family friendly and affordable) housing in the Dublin Region. Planning policy as articulated at national, regional and local scales in fact strongly supported the concentration of residential development within the Metropolitan Area of Dublin and the designated development centres in the surrounding hinterland area (see map below). It is the failure of the State (central and local government) to provide the necessary infrastructure, services and regulation to support socially sustainable residential development within the Dublin Region that has led to the perverse situation of reported oversupply in the Dublin City and Dun Laoghaire Rathdown and supply in line with demand in neighbouring Hinterland counties. In order to fully understand the social, economic and political geography of Ireland After NAMA, we need to move away from interpretations of statistical data which serve to reinforce the fallacies of methodological territorialism (see Neil Brenner – New State Spaces…), where counties and other administrative units are understood as distinct spatial entities.

Constructing a geography of flows and functional relationships creates challenges in terms of data gathering and analysis but must be seen as a neccessary step in highlighting the evident deficits in dominant aspatial and terrritorial interpretations.

 

Regional Planning Guidelines for the Greater Dublin Area (2004) Settlement Strategy