The Irish Times story on Youghal - and the subsequent stories - made for difficult reading. Having grown up in the town, and moved back to the area in recent years, I know it intimately. It has never in recent times been a wealthy town, and ever since the carpet factory shut down in the early 1980s, followed shortly thereafter by Murray Kitchens, it has been in decline.
Today's Irish Times editorialises on the resilience of the Irish Town. I disagree. In America, Detroit was once a huge bustling metropolis, the fifth largest city in America. Today, it has slipped to eighteenth; at the recently completed census, the city asked for a recount because the Federal Funding level is likely to drop dramatically. A once proud city, center of the world in car manufacture, the top eight employers are "public sector" - education, healthcare, government. General Motors is number nine. Its exquisite art deco architecture is now in decay. Cities, towns, villages have been abandoned throughout history. If our towns are not managed properly, they may also slip quietly into history.
Some others have offered some suggestions as to how Youghal might be improved - the rail line to Cork (a feasability study for which is tentatively roadmapped for "sometime before 2020 in the County Development Plan); the monk's road and other tourist attractions; a mayor, and devolved local government. Previously there have been discussions with interested parties on the construction of a marina, and attendant facilities.
Youghal is not the only town, of course, that finds itself in trouble. It has its own plusses and minuses, but there are things in common, including the building boom legacy. The National Asset Management Agency is in control of countless properties and assets that they are trying to generate a return on. For example, let's consider an apartment that cost €200,000, with loans attaching of maybe €150,000, and a market value of - maybe - €50,000. Even with that market value, it is not an immediate value, but a future likely value. There are of course other assets available - building land, houses, hotels, and so forth. In the mean time, these assets are decaying, or costing more money to maintain or complete. Half built developments may be destroyed.
There could be a way to take some of those assets, and make them generate a value return other than simply cash. For example, could the town of Youghal lease a dozen apartments from NAMA for ten years for €1 per apartment, and then use its own resources (the resources of the town clerk, essentially) to maintain them? They could be rented out to holiday makers for €50 per week, the intention being to cover costs of maintenance only, in the hope of generating tourist revenue for the region?
If there are hotels owned by NAMA, the same could apply. If we are making an assumption that the value of an asset is only realisable in the medium to long term for accounting purposes, then it appears logical that we should be trying to maximise the value of that asset in the near term - NAMA could let the property....or it could seek to find other uses for it that would generate value in other ways. There are issues to consider - local hotels would be upset at the competition, for example (although in Youghal, I'm not sure there are many who would have that problem) and others struggling in the buy to let market may similarly complain. However, the argument may be that prices need aggressive downward pressure like this in order to re-set them properly. If the apartments are not being let anyway, that would certainly be true. And only certain types of landlords open apartments for short term let like that.
Other assets could be used for other things. Sites, fields could be alternately developed for short term use - markets, festivals, fairs could be organised on downtown sites where planning was secured for an unbuilt apartment block.
The impact would be to unlock some of the value trapped in a pincer movement of a depressed market for property, and the NAMA / loan structures. Allowing regional or local access to the economic value even for a short time could be modelled to have an impact on the economy as a whole, and accelerate its move out of recession. In turn the properties become more valuable - and NAMA gets its return, while its assets are protected and utilised. Just a thought...
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