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Devalued flood plain housing could cost Nama
29 November 2009 By Nicola Cooke
JBA Consulting, a Limerick firm that devised the flood mapping guide for the Office of Public Works, said that its high-tech national flood mapping indicated that large tracts of zoned development lands were in areas of flood risk.
If those lands are taken into Nama as development lands and then rezoned back to agricultural or amenity use, the government could face significant write-downs in their value, the firm warned.
It is understood that defence minister Willie O’Dea has already raised this issue at cabinet and with finance minister Brian Lenihan. Under an EU directive, local authorities must designate all lands as being of high, medium or low flood risk within five years.
‘‘There are landbanks that are of poor quality and on flood plains, but have multimillioneuro values," said one source.
‘‘The planning guidelines require all local authorities to see if lands are ‘fit for purpose’, which they are not if they have been extensively flooded. Sites worth tens of millions will instead be worth tens of thousands. This is an issue Nama must look at seriously now, before it wastes taxpayers’ money."
Emer Lang, senior analyst at Davy Stockbrokers, said that flood risk on development lands taken over by Nama ‘‘could be an issue’’ for the new agency.
Dr Kieran Hickey, a flooding expert and lecturer at NUI Galway, said that the government should ‘‘re-house those whose homes were flooded’’ in recent days in developments that Nama will take over.
‘‘What is the alternative? Continue to have to repeatedly repair these homes and settlements that should never have been built on flood plains in the first place?" he asked.
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