Mick Wallace A lot of questions, but very few answers at the Justice Committee today, with the #Garda Commissioner... https://t.co/6e8jRJFo10
Mick Wallace RT @hooklighthouse: Look at those colours. Spring time on the Hook Peninsula is filled with all sorts of natural beauty... 📷 by Steven Fea…
Mick Wallace Interesting that Labour didn't even turn up for PAC Report on #NAMA in the Dail Chamber last night... https://t.co/yrToAYmG2Z
Mick Wallace #Garda Commissioner at #Justice Comm. likely to be a damp squib - 1 Questions confined 2 Comm doesn't answer much 3… https://t.co/DlhVJqLev7

Housing Crisis will continue, as long as this Government does…

Dáil Diary no 61 – 19th November 2015

I had six minutes to discuss the Housing Crisis at Private Members on Wednesday night – the Government interest in the various problems in relation to homelessness availability of housing, affordability, quality and ghettoisation were probably best reflected by Minister Kelly, who arrived for the last half hour to talk, laugh and snigger his way through the remaining debate. Dealing with such a serious subject, in the face of apathy and bad manners, is disconcerting. Sadly, the Housing Crisis will continue as long as this Government does…

Here’s my Dáil Contribution -

“There are a number of reasons and numerous opinions on why we have a housing crisis. Without a doubt the main problem is the fact that the current and the previous Government stopped building social housing. When the State stopped building social housing, this had a knock-on effect in the private and rental sectors. On top of this, we have serious problems with both of these sectors.

 

The decision by NAMA and the banks to sell off rental units and development in a fire sale has been a disaster for the housing and property market. When the next government initiates an independent commission of inquiry into the workings of NAMA, the rationale behind the decision to sell properties in large bundles will have to be analysed. These bundles are so large that only a few investment funds worldwide could entertain the idea of buying them. It is hard to perceive how in God's name the rationale for this came about.

 

On top of this, we had huge portfolios, like Project Eagle and Project Arrow, sold in a non-competitive fashion, with the Irish frozen out of the market for the best value portfolios. The bigger the portfolio, the lower the value obtained for the assets. This made no sense whatever. Take for example Project Orange, which was sold to Irish Residential Properties. This company now owns over 1,500 units. Project Orange contained 760 units, so why in God's name, given our housing crisis, did the Government not use some of those units for social housing? That is what should have happened. The Project Orange portfolio was sold for a fraction of the price it will cost the Government to build the required social housing units. The same situation occurred with Project Arrow, which was sold to Cerberus for €800 million. Almost half of that portfolio was residential property, but the Government did not even examine it to see what was suitable for use as social housing.

 

In January 2014, almost two years ago, I warned the Minister for Finance in the House during Question Time about the real estate investment trusts, REITs, that were being set up. I warned that these would invite foreigners into the country to buy large portfolios of property with zero tax to pay. I said at the time that questions must be asked about the increased corporatisation of property markets with little financial gain for the State. I went on to say that this would surely have implications for the rental market in the years ahead. The Minister replied: "It is hoped that the REITs will help to standardise and improve management standards across the rental property sector as a whole, which would be of benefit to both investors and tenants". They were a huge benefit to investors, but not to tenants. When I look back on this, I wonder whether this was done deliberately and whether the Government did want to corporatise the whole rental market. That is the direction we are taking. Now, with the likes of Kennedy Wilson and REITs controlling so much of the rental market, it is easy for them to form a cartel and dictate prices.

 

NAMA has said it will build 20,000 housing units on land that belongs to the Irish people because it was part of the distressed assets of the banks. However, only 10% of these units will be social housing. Why, given that we need significant social housing if the housing crisis is to be addressed, is 50% of this housing not to be social housing? I would not agree with making 100% of this housing social housing because that would create another ghetto. However, we need to begin to address the fact that the Government is not building social housing currently. If it is going to allow NAMA to build 20,000 units, half of those units should be social housing units and there should be a proper housing mix so that there is no ghettoisation.

 

Traditionally, social housing here has had a bad reputation. It has meant poor quality, a poor location and poor services. It does not have to be like that. We can build good housing almost as cheaply as poor housing. There is no great gap between the cost of good, decent housing and poor housing. It is outrageous to think we cannot build social housing well and mix it with private housing in a good way. If we look at state housing in Italian cities, we see good quality units. We could do the same. We must change our attitude in regard to the provision of social housing. This would make a significant difference. Until the Government decides to get over its ideological barrier to building social housing, we will continue to have a social housing problem and a housing crisis, and people will continue to fail to afford to buy into the private or rental market.”

 

Mick Wallace.

 

namaleaks

THE TRUTH IS COMING....

Namaleaks is a project that seeks to uncover possible injustice and poor practice related to NAMA (National Asset Management Agency) and financial institutions in Ireland.

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