Ireland's housing collapse now becoming a literal one

Dublin - Ireland is opting for bulldozers rather than bankers as it starts to clear the legacy of the housing boom whose collapse brought the economy to its knees.

About 1,850 housing developments, unfinished after the bubble burst in 2008, pockmark the Irish landscape, according to government figures. This week, Ireland's National Asset Management Agency, the state agency set up in 2009 to purge banks of their most toxic commercial property loans, started the destruction of an apartment block for the first time.

"There'll be some places where the most sensible decision that can be made will be to demolish," Housing Minister Jan O'Sullivan said in an interview in her Dublin office. "If nobody wants to live in them, then the most practical thing to do possibly will be to demolish what is there."

The so-called ghost estates are the most visible scar left by Western Europe's worst real-estate crash, which led Ireland to follow Greece in seeking international financial help. In all, about 15 percent of Irish homes are vacant, the country's statistics agency estimates.

The death of a two-year-old who wandered into an unfinished development in February underscored the problem of leaving the estates empty. The building in Longford in central Ireland was bulldozed on Wednesday on safety grounds after a sewage-related explosion in a home on the site.

"The people that bought into a dream inherited a nightmare," said Peggy Nolan, a local lawmaker in Longford. "The taxpayers have paid enough, as far as I am concerned, shame on these developers."

About 553,000 houses were built in the 10 years through 2005 in the country of about 4.5 million people, as homebuilding expanded at twice the pace of the rest of Europe. About 294,000 homes now lie empty, as prices halved. In Dublin, prices have dropped 64 percent from the 2007 market peak, according to Irish real estate agent Lisney.

The asset agency, known as NAMA controls or is linked to about 10 percent of estates. The agency this week demolished a 12-unit apartment block at the Gleann Riada, about 115 kilometers (72 miles) from Dublin.

O'Sullivan is drawing together developers, local authorities, banks, NAMA and residents to formulate "site resolution plans" for each estate. The government envisages that "substantially completed" developments will be finished and potentially sold or used for social housing, O'Sullivan said. Others will be demolished and returned for farming.

The plan is to "get rid of this blot on our landscape, and this blot on our communities," she said.