THE taxpayer will be forced to pick up the tab as councils ban housing on massive banks of land -- bought for billions by property speculators at the height of the boom.
The value of development sites has plummeted by more than 90pc, after councils rezoned land which is no longer needed for housing.
The Irish Independent has learned that 12 of the country's 34 local authorities have already dezoned or banned development on lands. The remainder will do so by the end of the year, under a radical shake-up of planning system countrywide.
But the move will have serious implications for taxpayers. Banks lent billions for speculative deals on those lands which have since collapsed -- with the State now forced to pick up the bill. Housing will now no longer be allowed to be built on 8,000 hectares previously earmarked for development in 12 local authorities alone.
At the height of the boom, this land could have sold for more than €1m per hectare. However, after rezoning the average value is likely to be just €25,000 a hectare, informed sources said.
The findings provide the first indications of the extent of the zoning madness rubberstamped by councils over the last decade.
Many of the local authorities were controlled by Fine Gael, the main government party now tasked with cleaning up the mess.
At the height of the boom, around 44,000 hectares of land -- enough to build more than one million homes -- was zoned as suitable for housing.
This was almost 32,000 hectares more than needed.
House prices continued to soar, despite the oversupply, with landbanks swapping for huge sums. In practice, many of these landbanks were swapped from owner to owner, with nothing built. Now local authorities have been ordered to rationalise their planning policy -- identifying where there are needless landbanks, and dealing with them by rezoning.
The massive shake-up does bring some good news for thousands of homeowners living in ghost estates because these developments will have to be completed before planning permission is granted for new units.
But it will also have a negative impact on the taxpayer. Every loan over €20m goes into NAMA, meaning that hundreds of devalued sites are now controlled by the 'bad bank'. About 18pc of the €73bn in NAMA loans are connected to land.
A NAMA spokesman said these loans had been substantially written-down when they were taken over, some by as much as 90pc.
The new figures show:
a total of 12 councils had 14,000 hectares of land available for housing two years ago; l Under the new plans, there are just 5,800 hectares;
Laois now has 273 hectares of land for housing, down from 2,235 hectares two years ago;
Sligo County Council reduced its landbank from 350 hectares to 195;
Other councils to have re-zoned are Fingal, Clare, North Tipperary, South Tipperary, South Dublin, Wicklow, Galway City, Dublin City, Kildare and Cork City.