Wednesday 18 September 2019

Gene Kerrigan: Cod-scientific gloss on market won't wash

Our petulant politicians have made a mess of housing and now they are getting their figures wrong, writes Gene Kerrigan

Illustration by Tom Halliday
Illustration by Tom Halliday
Gene Kerrigan

Gene Kerrigan

So, it was a good week for Simon Coveney, yeah? And a bad week for Leo Varadkar? Simon's edged ahead of Leo as the would-be FG leader, huh?

Fine Gael had a good week, Fianna Fail made a pig's mickey of it, right?

These, incredibly, are the somewhat beside-the-point conclusions arrived at by large sections of the political and media establishments.

Have these people gone so far up their own backsides that they can't see the reality of what's going on around them?

This is not about Simon and his backbone.

This is not about Leo and his ambitions.

Name the top five political differences between Simon and Leo? Can you name even one?

And this is not about one right-wing party getting a small, temporary advantage over another right-wing party.

Hundreds are sleeping rough - thousands are in wildly unsuitable emergency accommodation. The State and "the market" have put adults and children under permanent abusive stress.

As it was last Christmas, so it will be next Christmas.

Here's what happened last week, if you strip away the posing and the preening and the petty concerns of a passing parade of third-rate politicians and their media fanboys.

Simon Coveney had a problem. He had no idea what to do about homelessness, but he had to be seen to do something.

He agonised about interfering with "the market" (in penance, go down on one knee, thump your chest three times).

Most of our politicians hold right-wing doctrine to be sacred, and that says, Thou Shalt Not Interfere With The Market.

Simon has confessed that putting a 4pc cap on rent increases felt "counter-intuitive". It felt unnatural.

But the housing market is wreaking terrible damage, once again. The head of Ires Reit, the Canadian investment outfit that is Ireland's biggest landlord, told the Irish Times: "We've never seen rental increases like this in any jurisdiction that we're aware of."

Ires Reit is just one of the billionaire investment vehicles that have benefited from the largesse of Nama, which sells rich people massive parcels of property on the cheap.

David Ehrlich, Ires Reit's CEO, added: "I truly feel badly for the Irish people."

But he'll be putting up rents again, anyway. It's called maximising value for the shareholders.

And that's how David got a €376,500 bonus last year on top of his €753,000 salary (and let's not even mention the lucrative stock options he reaped on top of this).

There are, of course, small-scale landlords who, after hard work or luck, accumulate the cash to invest in one or two properties as a form of pension. Or, who become property owner/managers as a form of employment.

The motives of property owners is not the issue. Whether out of greed, need or a wish to maximise income while the going is good, landlords have been jacking up rents and pushing people on to the streets, as shelter goes to the highest bidder.

And, at the same time, land hoarders, planning permission hoarders, developers and estate agents have been pushing up the price of buying a home.

Two problems.

Problem one: no one knows if the unstable property market will again flip on to its back, sending another shockwave to shatter what's left of the banking system and kick another large hole in the economy.

What will happen if the establishment again hands out billions of euro of public money to bankers, while asset-stripping the rest of us? More compliant submission? Or will we this time take the pikes down from the thatch?

We know now that the Department of Finance is already worried about the effects of Michael Noonan's tinkering with the property market - using budget goodies to enhance FG's political prospects.

Problem two: the unleashing of the property market has already had gruesome social effects.

These are not symptoms of a healthy society.

So, agonising about it, Simon Coveney decided to cap rent increases.

To Simon and his fellow right-wingers, the notion of acting in the interest of citizens, not the interests of "the market", is like a Catholic bishop being required to hand out condoms. It feels unnatural, it feels "counter-intuitive".

The Department of Finance said no - Michael Noonan turned green around the gills.

These people know their ideological, semi-religious belief in the market isn't very convincing, so these days they put a cod-scientific gloss on it. Interfering with the market, they say, could have "unintended consequences".

Trouble is, things are getting steadily worse. Citizens might begin to wonder if wrecking people's lives is an intended consequence of FG/FF's obsessive obedience to right-wing ideology.

Simon had to try.

The "new politics" means the FG/FF cartel is a kind of off-the-books coalition.

Simultaneously, FF pretends to be the opposition. This meant FF had to try to look like it had some input into Simon's policy, so Barry Cowen began throwing shapes.

Simon wanted a 4pc per year cap, for three years - this will add three or four grand to your rent bill.

It's massive.

Imagine 4pc a year for three years as a wage demand, instead of a rent demand. The media would go berserk. Workers would be greedily "holding the country to ransom".

Normally, the FG/FF game plays out according to a script. You say 4pc, I say 2pc - we make faces at one another for a while until we announce we've agreed on 3pc, and the media cheers wildly.

But Simon was sick to his stomach at having to interfere, even to this extent, with "the market" (go down on one knee, punch yourself in the face).

He stamped his little foot and said: "No! No! No!"

Barry, it seems, went pale and said: "Oh, dear, suit yourself."

Meanwhile, as the Dail debated Simon's bill, TD Eoin O Broin said he found maths "difficult to understand", but he had a query.

Wasn't it true that, if the formula used in the bill was applied, in the first year "it would be an 8pc increase, not a 4pc increase"?

Ooops. They've done it again.

They got their figures wrong. Simon had brought the figures to the Department of Finance and they carefully examined the bill. Michael Noonan did, too. They didn't like it but they didn't spot the mistake. FF were given the bill, they didn't spot it. The media experts opined on the bill - they didn't spot the mistake.

Last February, during the election campaign, Pearse Doherty had to correct Michael Noonan's figures - they were some billions out - now, another Shinner (one who admitted he's no great shakes at the maths) was doing it again.

It seems Sinn Fein have access to the only calculator in Leinster House.

Inevitably, the repeated failure of the right-wing parties to respond adequately to the pain their policies have caused has produced an opposition.

People - including some celebrities and some activists - have been sickened by the current brutish housing policies.

Home Sweet Home was launched last week and its activists immediately occupied an empty Nama building, to try to provide some temporary refuge.

No, it's not the solution to the problem. The @HSHIreland movement is an example of that ancient Irish cry of Oh, for Christ's sake, stop fecking about.

It's not human helplessness that stymies progress on housing.

It's the failure to break from the irresponsible, callous, cruel and loathsome political policies that sustain homelessness.

Sunday Independent

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