The world according to... Karl Deeter
Mortgage brokerage professional and market pundit Karl Deeter tells why red tape is preventing empty buildings being used for housing
although a self described espouser of old style liberal economic laissez faire, Karl Deeter does not hesitate to recommend State intervention "when things are not functioning."
For example, the mortgage brokerage professional and leading market pundit, is preparing to propose the notion of tax breaks for landlords taking rent allowance tenants.
"I was recently talking to Father Peter McVerry (the leading homelessness activist) and he's in favour of the idea. It would mean landlords would actually be rewarded for taking on rent allowance tenants who are currently being turned away from private rented accommodation. They'd have to comply with all conditions and sign up for a three-year lease. There'd be no losers as far as I can see."
Los Angeles-born Deeter of Irish Mortgage Brokers is one of the few Irish property industry insiders who can claim kudos for calling a spade a spade as the property market began to crumble seven years ago.
In 2008 when many within the sector were scrambling to prevent the public from believing the worst crash in Irish history was well underway and when the 'soft landing' brigade were at their most persuasive, Deeter went on radio to explain to the nation why he "wouldn't touch a house with a barge pole". Back then, when the verbal support for a crumbling market had become a 'green jersey' issue, a mortgage broker advising people not to buy homes seemed incomprehensible.
"Yes I got a lot of criticism for it at the time, especially within the profession. But I believe you've got to be straight with people. It's short sighted in any business not to be straight up."
Seven years on, after a similarly unprecedented wipe out of Irish mortgage brokerage operations, IMB is among the few firms left standing - based in part on a similarly forthright approach to customers. Deeter, its head of compliance, has gone on to become a regular commentator on the airwaves.
His longevity as a media pundit on property and mortgage markets has endured, not just because of his direct and sometimes controversial approach, his novel suggestions for solutions, but also because his views are based on a widespread knowledge of international property market economics and models.
Deeter is known to hoover up property market and housing model studies and theories from universities and academics worldwide as well as being a keen researcher of working housing solutions in other countries. He's also been known to call up or email the authors of reports directly when he doesn't understand what they're on about - be they located in New York or Helsinki.
Although obviously having a vested interest in a thriving lending market, as a pundit he has used the relatively independent perspective of a broker to skewer the often cynical approach by banks to lending.
The Deeter brain is constantly running through solutions to market problems. And while his ideas sometimes seem simplistic, they are almost always backed up by detailed examples of working models in other jurisdictions.
He is also in favour of some rather unpopular measures such as taxing the Irish people more for housing. "In France every citizen pays a fraction of a percentage of their income tax which is earmarked directly for social housing. So everyone bears the burden. Here social housing is funded via Par 5, so only those who buy new homes pay for social housing. There's something wrong with this picture. We should be charging everyone 1pc if we're truly serious about social housing."
When we think of somewhere like Longford (with too much housing )and Dublin (with a shortage) , Deeter sees a lateral solution linking them. "A high-speed train service from Dublin to Longford could actually help solve the housing crisis by making affordable housing city accessible. It works in other countries, so why not here?"
Deeter is among the speakers lined up to address Housing The Next Generation, the Irish Independent and Ulster Bank sponsored conference event set to be held on April 30 at UCD. The conference event will be attended by more than 700 Irish property, mortgage and housing sector professionals to explore new ways forward for housing in Ireland as the market gets into recovery mode.
He's a landlord and a property investor (he owns rental properties), a tenant (he rents his business premises) and a renovator (he has completed his own conversions of Pre 63 properties). And at a time when the economic ascendancy appears to believe that more people should rent, Deeter asserts that those who own their own homes will always be better off.
"Every mortgage payment you make is like a forced saving. It adds to your wealth. Research shows that housing has a bigger impact on your status than race or education. Those who own their own homes are on average €13,000 better off than those who are renting. Think about it, if the Luas is extended to Finglas, it makes the renters poorer by increasing the price of their rent, while it makes owners richer by increasing the value of their property and by increasing its rentable income."
When it comes to the crisis, one matter which has him incredulous is the sheer waste of space in Ireland. "You walk down any key shopping street in Dublin City Centre and the ground floor shop might be occupied but there are three or four floors empty overhead. We are being called upon to build more houses and expand the city when the space is already here. It just can't be used.
"First of all we need to tax vacancy and the non use of land. Other countries do it and it works. Next we need to break through a mesh of unnecessary building regulations, fire regulations and other regulatory requirements which work against each other and make so much space unusable for housing.
"For example, I want to convert a period house into four apartments to let them out. Let's say an old Pre 63, a big tall Victorian building with lots of floors and a steep stairs. Well there are requirements to enable disabled people to access the building. But the requirement for wheelchair ramps contradicts a conservation requirement that those lovely big stone steps be kept intact, the stairs kept and no lift installed. It might sound mercenary to say it, but why should every private residential building in the country have to be accessible to wheelchairs when only a small portion of us are actually in wheelchairs? Especially if it means that so many go without housing as a result?
"Disabled people should be catered for but the reality is they are not the rump of society. So why do we need to provide disabled access to a private residence that never had any? We have created incompatible regulations which prevent housing on a vast scale. How can we preserve the integrity of historic homes while at the same time catering for say energy efficiency requirements? These are the sort of obvious issues which need to be addressed."
Further details for Housing The Next Generation can be obtained from Conference coordinators Core Consulting (01-6634300) and coreconsulting.ie.