The recent news in Ireland that the state is likely to foot the bill for the demolition of around 40 ghost estates around the country should simply NOT be the case.
There is no need for anyone to "foot the bill" for any such previous error of judgement by whoever was responsible for these ghost estates. The key point is to look at the issue of how they were created in the first place:
Financial institutions (lets call them "banks") lent out money on a profit driven basis, with little regard for any overall long-term strategic development plan. These properties where then built with all this leaveraged capital, and once the inevitable end of the boom happened, this same capital dried up, preventing these estates from being completed. If we can just isolate "the banking system" as a source of capital, then what they do (in conjunction with a central bank) is issue the money to be raised to finance these projects, and once the projects are successfully completed, and a return is obtained on this investment (ideal scenario for the banks), then they get a return on REAL equity, i.e. Work/Building/Human activity, in return for issuing capital that was essentially generated from nothing.
However, because these projects FAILED and the return was not yielded, all the banks have to do is write the investment off, so that no one has to fork out payment for anything that was never realized in the first place. Hence, the cost of demolishing these failed estates forms part of the overall cost of these projects, and is therefore added to the projects overall cost that is to be included in the write off amount. In addition to this the cost of putting the land back to some normality (or where it was before the projects begun would also be encompassed in the overall cost of these failed projects. Once this is achieved we are back to point zero from the projects inception.
