Wednesday 19 June 2019

No help for Tyrellstown families from Leinster House as vultures circle

Two young mothers who have received notices to quit take their babies for a stroll at the Cruise Park housing estate in Tyrellstown in West Dublin. Photo: RollingNews
Two young mothers who have received notices to quit take their babies for a stroll at the Cruise Park housing estate in Tyrellstown in West Dublin. Photo: RollingNews
Colette Browne

Colette Browne

The prospect of hundreds of evictions from one estate in Tyrellstown is a manifestation of the country's housing crisis writ large - and a portent of things to come given the huge influence vulture funds now wield in the Irish property market.

Transport Minister Paschal Donohoe described eviction notices being sent to scores of families in Cruise Park, after Goldman Sachs-owned vulture fund Beltany Property Finance acquired the development loan for the estate, as "unfair". Separately, a spokesman for Environment Minister Alan Kelly said it was "quite harsh to chuck this amount of people out at one time".

One can only imagine the chastened executives in Goldman Sachs bowing their heads in shame at such excoriating criticism from representatives of our caretaker Government.

What planet are these guys on? Vulture funds are not exactly renowned as being warm and cuddly or acting with any kind of social conscience. The only thing they are interested in is money.

So, while it may come as a surprise to members of our gormless Government that this particular vulture fund is living up to its name, the rest of us should prepare for further mass evictions.

For a number of years, a variety of vulture funds have been buying distressed loan books from Irish-based banks and Nama. The figures involved are scary.

Goldman Sachs alone has spent €760m buying Irish loans since 2014, while IBRC and Nama sold a combined €36bn of assets in 2013 and 2014, with US vulture funds snapping up the vast majority.

Ulster Bank is imminently expected to sell a €6bn loan book to the same funds.

This isn't something the Government ever expressed any concern about. In fact, it actively encouraged it. Last year, Finance Minister Michael Noonan was accused of "rolling out the red carpet to vulture funds" when it was revealed the Department of Finance had met with private equity firms 65 times in 2013 and 2014, with the minster attending eight of those meetings.

In contrast, during the same period, the department met just five times with advocacy groups for mortgage holders - with the minister failing to attend a single one of those meetings.

Now, the Transport Minister bleats that families being evicted, to satisfy the voracious profit-making appetite of vulture funds, is "unfair". Where was he when tens of billions of euro worth of Irish assets were sold to these unregulated financial scavengers that can act with complete impunity?

The main problem for Tyrrelstown residents is not that they are being evicted, but that they have nowhere to go and neither do thousands of other families all over the country.

The numbers of people in emergency accommodation, in hotels and B&Bs, is now at a record 6,000 while 134 families were made homeless in one month alone, January, in Dublin. Of these, 125 had never been homeless before. Nothing the Government has done to address this crisis has made a blind bit of difference. The problem is getting worse.

Last week, the ESRI reported that, despite the huge, pent-up demand for housing in the capital, apartment building had come to a virtual standstill. The author suggested possible causes for the moribund market could be increased costs and the hoarding of development land.

The Government's botched attempt to respond to these two issues perfectly exemplifies its incompetent handling of housing.

Mr Noonan wrote to Nama recently expressing concern that developers were hoarding land and asking the agency to ensure it was supplying land to the market as quickly as possible.

However, if Mr Noonan is so worried about land hoarding, why not introduce a financial penalty for those developers who mothball sites? There are plans to introduce such a levy - but not until 2019.

If you were a developer, certain you could maximize profits by waiting a couple of years to develop a site and facing no financial penalty for doing so, what would you do?

As an aside, former Mayor of Dublin Oisín Quinn was calling for the introduction of such a levy back in July 2013, but nobody in Government listened. Maybe they were too busy meeting with vulture funds.

Similarly, the Government's attempts to bolster housing regulations have been credited with doing very little to protect property buyers and instead increasing building costs dramatically.

Independent building inspections by local authorities were done away with in 1990, replaced by a crazy system of self-inspection that led to disasters like Priory Hall, but the new regulations retained self-inspections and added lots more red tape.

BRegsForum, a blog dedicated to building control regulations, has estimated the extra cost of these regulations is up to €22,000 per home. Compare that to a system of independent building inspections which costs approximately €200 per house in Northern Ireland.

Even when the Government announces a temporary salve with great fanfare, in the form of "rapid build" modular housing, it invariably blows up in their face. Some 22 modular homes that were promised by December will not now be ready until at least the end of this month.

Separately, a €20m tender for 131 modular homes, that were supposed to be completed by June, was cancelled a few weeks ago and reissued with a new deadline of December. Latterly, the cost of these supposedly temporary homes has been called into question, with the Anti-Austerity Alliance stating the cost of each unit in Ballymun, €190,000, is more than the current asking price of homes in the area, at roughly €150,000.

In any event, these homes, if they are ever built, are just a drop in the ocean of what is required and if there is no additional supply in place by next year, when a temporary rent freeze introduced by Alan Kelly expires, the numbers of homeless will be unlike anything we have ever seen before.

What has the response of politicians been to this rapidly escalating catastrophe? For the last six months, they have been distracted while in election mode and now, post-election, they are all too busy strutting around refusing to go into government together to do anything. If I were a resident in Tyrrelstown, I wouldn't be holding my breath waiting for anyone in Leinster House to come to my rescue. It's clear that they, and every other tenant, are on their own.

Irish Independent

Today's news headlines, directly to your inbox every morning.

Don't Miss