John Coleman, CEO of the Land Development Agency, talks about the new agency’s immediate plans, and its long-term remit to change the way state land is managed.
Launched in September 2018, the Land Development Agency (LDA) is the latest major Government initiative to deliver desperately needed housing, but that’s only part of a much more ambitious remit to change the way State-owned lands are managed, and to use both State and privately owned lands to bring stability to Ireland’s volatile housing market. The Agency has been allocated a budget of €1.25bn, but with the country in the midst of an unprecedented housing crisis, it’s a challenging remit to say the least, and the LDA has had to hit the ground running. Says CEO John Coleman: “Land is one thing, and land that’s ready for development is another. Our starting point is State land, so we’re doing an exercise at the moment to create a State lands database to understand what is in the State land bank and to build our strategy from that. We also have an initial tranche of sites that we’re doing preparatory works on with a view to getting those up and running in the near future”.
Land is one thing, and land that’s ready for development is another
Mapping State lands
While the new agency is still in the process of recruiting staff, a team has already begun work on the land database using information provided by State agencies, Government departments and local authorities. It is already looking at how those lands are currently being used, their planning and zoning status, and how they might be used to provide housing. It’s a huge project, and a challenging one: “We’ve been engaging very positively with landowners like CIE, the ESB, the Department of Defence, the OPW, the HSE and, very importantly, the local authorities. But oftentimes you could have a health facility or other very legitimate services that need to be accommodated on those lands. So what we’re trying to do is come up with innovative solutions. For example, services could be relocated or accommodated on a different space”.
It’s the first time that a mapping project encompassing all State-owned land has been undertaken in Ireland, and the agencies involved stand to gain from it too: “Until now there’s been a siloed approach in terms of land management within the broader State sector. And that’s understandable: the HSE’s mandate is not to deliver housing, it’s to deliver health services, so that’s the context in which they think about their land. Often you’ll find that agencies that are adjacent to each other in terms of land ownership don’t necessarily speak to each other, and that’s what we’re trying to do, to bring those connections together. What we’re finding as we talk to Government bodies is that they’re interested in it from the perspective of their own needs, so while our focus is development or urban regeneration, their focus might be: ‘well we need a facility and we didn’t know there might be land available that could be used for it’, which could have a knock-on effect of freeing up land for the LDA. So I think it’s going to have a significant impact on the efficiency and productivity of land in the State sector”.
Linking with the private sector
Part of this process is to identify privately owned land adjacent to State lands, which the LDA might look at acquiring in order to unlock larger-scale development opportunities. John says that the LDA’s approach will be a commercial one, but there will be provision for compulsory purchase orders (CPOs) should the need arise: “I think that in the interests of a much wider development opportunity, we need to be prepared to use [CPOs], and to be clear that we are prepared to use them, but at the same time, my view is that there wouldn’t be a wholesale deployment of CPOs as a strategy for acquiring land”.
John is all too aware that there is an expectation of rapid delivery from the LDA, and that’s reflected in its approach to the first eight sites: “We have engineers, architects, traffic management studies – all that type of work is underway. None of the sites have planning permission, and I think this is an illustration of the need for the LDA. The lead time into obtaining planning permissions is significant, and none of this work had been done until the LDA came along. We expect to see the first homes on those sites from 2020 onwards, and we hope to continually add to that site portfolio”.
John doesn’t see planning as a stumbling block, but says new planning frameworks would make larger projects easier to get off the ground: “New frameworks would be useful to give direction and vision to larger-scale regeneration opportunities. Where you have multiple landowners, if a planning framework akin to what we have with Strategic Development Zones could be put in place to facilitate and give not just planning clarity, but also implementation clarity in respect of land areas, I think that would be useful and that’s something that we’re in discussions with the Department on”.
A condition of access to State-owned sites is that 30% of housing provided is affordable. John says that the Government is currently working on developing a policy and regulatory framework for both affordable purchase and affordable rental. The latter has been deployed extensively in other areas, but is a new concept for Ireland, and could be a game changer. One model that the Department is looking at is cost rental, where rents are based on the cost of delivery. John sees great potential in this, given that household sizes are changing, and more diverse types of accommodation will be needed in the future: “We need to make the proposition attractive. We need to be able to show people that they’re pleasant places to live, that they’re well thought out, that there are good amenities, but also that they won’t be hit with heavy rental increases year on year, and that they’ll have security of continual occupancy for as long as it’s necessary for them. I think if you brought in those types of initiatives, you would see a gradual shift in the attractiveness of this type of tenure”.
The proposition should also be attractive to investors/landlords. The State may have a role, but once the correct policy framework is in place, John also sees opportunities in an “affordable rental industry”, where firms who are interested in a rate of return that is perhaps lower, but predictable over the longer term, will enter the sector.
Crunching the numbers
A Chartered Accountant by profession, John worked in the corporate banking sector before joining NAMA in 2011, eventually becoming its Chief Financial Officer. While at NAMA, he was centrally involved in the major strategy shift that led to it becoming a significant force in housing delivery in Ireland. John left NAMA in 2017 to work on what has become the Land Development Agency.
With three young children at home, he says he doesn’t have too much free time, but enjoys going to gym: “you forget about everything except the weight that’s in front of you. I enjoy that mindfulness aspect”.
With the lands, agencies and monies involved, there’s definitely an element of pressure to succeed, but John feels that the LDA’s targeted, project management approach is the right one: “The easiest thing in the world is to set big targets and the hardest thing is to be able to deliver them. In terms of short-term goals, we’ve broken those down into projects and tasks so that we’re tracking them almost on a weekly and monthly basis to ensure that we’re still on target. That’s the approach we’ve taken to ensure that we achieve what we say we’re going to achieve”.
Communication and expectation management are also key: “Our Chairman, John Moran, is very keen on transparency and visibility as we progress, and I think that should give people confidence that as we achieve milestones along the way, [when it comes to] the grander targets over the long term, people will have confidence that we can deliver on those”.
The Land Development Agency Act, which is due to be published shortly, will also clarify the Agency’s role: “We’re being set up as a commercial State-sponsored body in the same way as CIE or ESB, so we have to act commercially, and I think that’s important because while we’ve been given significant initial funding, property and development is a capital- intensive business. It’s important for us in terms of our sustainability to operate on a commercial basis. So the first thing the Bill will do for us is set out clearly what our functions and objectives are”.
Overall, he’s confident that the will is there to make this new departure a success: “We’ve had significant support from the Department of Housing, but also from the Department of Finance, the Department of the Taoiseach and the political leadership. I am encouraged by the openness of those Departments to new ideas and new ways of looking at things. And I’ve been encouraged by the response from the market in terms of the LDA being an enabler for more opportunities”.
And what of accusations in the media or elsewhere that the LDA is yet another quango, launched with great fanfare, but unlikely to make a difference: “If you look at the facts: what components does the LDA have? It has funding of one and a quarter billion Euro. It has a platform consisting of property, financial and legal experts. It has access to a large land bank with more coming. And it will have significant scope through its legislation to deliver on those redevelopment opportunities. For any organisation to have that mix of people, land access and money, I think you’re going produce something interesting”.
The easiest thing in the world is to set big targets and the hardest thing is to be able to deliver them.
And what is produced could be hugely positive for the State as a whole: “What is the best use for any particular piece of land? And how can we accommodate all of the services, including housing provision and all other Government services, in the best way possible, from the overall land bank? That’s the vision. So regardless of what the vested interests of ourselves, or any other State agencies are, the State will be in a position to make an educated decision on the best use for land within its control”.
The major point to get across is that the LDA is very much open for business: “We shouldn’t be seen as an ivory tower that’s impervious to engagement and discussion. We want to engage – we want to deal with the market, and we want to be approachable”.
Managing Editor, Think Media