Fury as council landed with €400k-a-year debt

Galway repays €32m ‘social housing’ plots ..yet not a single property built

A LOCAL authority is spending millions in interest on land it bought for social housing even though not a single property has been built.

At the height of the boom, Galway City Council paid €32million for the plot to develop for affordable homes.

But when the downturn hit it was saddled with huge debts and now ratepayers must meet the €400,000 annual payments. None of the principal loan is being serviced.

A source told the Irish Mirror the land was vastly overvalued when the purchase was initially made.

He described it as “obviously a huge mistake”.

The elected councillors at the time, many of whom still have seats, gave the green light for the purchase. The parcels of land were initially transferred to the Land Aggregation Agency, described as Nama for local authorities.

Councillors are now working out a deal with their creditors where they are going to keep some parcels of the more feasible land for direct development.

It is hoped social or mixed housing developments will be shovel-ready in the next year in areas such as Ballyburke, the Clybaun Road or prime sites on the western outskirts of the city near Knocknacarra and Salthill. In August the number of local people classed as homeless stood at 263 but some say the real figure in higher. Millions of euro have already been lost and written off as the price of development land in Galway collapsed since the high water mark of 2007.

But there may be some light at the end of the tunnel thanks to the new Galway bypass road announced by Government last month.

The route of the ring road will pass through some of the lands bought as part of the €32million package.

There will be Compulsory Purchase Orders from the Government and the authority will be able to recoup some of their losses when the State compensates for the land.

Galway City Council did not respond to numerous requests for comment.

years since the property market hit its height before the global crash

people officially homeless in the Galway area in August