The Taoiseach was right to look concerned.
It’s a total sickener.
A new strain has emerged.
“There is something new in what happened over the weekend. There is no point in saying there isn’t because there is,” he informed Cian O’Callaghan of the Social Democrats.
A new strain of the old greed.
This could be called the "Maynooth variant" although a number of TDs say it isn't new but an infection which has been slowly but steadily taking root under the eye of recent governments in a dangerously weakening market.
“Insidious” is what Labour’s Duncan Smith called it.
Micheál Martin identified this new strain during Leaders’ Questions. Like all the others it came from the liquid Reit market and is spread by cuckoos and vultures, but the big difference to look out for here is the emergence of bulk-buying of completed housing schemes.
And swooping. Swooping in and scooping up.
“Unacceptable,” he said. “Not acceptable.”
Investment companies should not be purchasing entire suburban estates. His Government is absolutely opposed to this.
The Taoiseach’s sincerity was genuine. As was his obvious concern, not just for the individual victims of the Maynooth variant and other financial mutations, but for his administration’s future and his own political skin.
He will be aware of the disgusted reaction to the Business Post's weekend revelation of an investment vehicle called Round Hill Capital sneakily nipping in and snaffling all but 22 out of 174 new homes in a Kildare housing estate, shouldering shocked individual buyers aside with its massive buying power.
So he will be aware that this sort of practice has to be stopped, not only to help first-time buyers find a home but also to stem the public anger over the unfair, inequitable and dysfunctional state of the housing market here.
Raging contagion
At least an effective vaccine exists now for coronavirus, while opposition criticism of the Coalition’s handling of the pandemic has always been tinged with the cautious awareness that a raging contagion is oblivious to the rule of politics.
If only the same could be said for the housing crisis, which was very much with us before the pandemic and looks well set to outlast it. The climate allowing global real estate investment trusts (Reits) to flourish was engineered nearly 10 years ago by Fine Gael minister for finance Michael Noonan when he introduced tax breaks to encourage these companies to invest here and boost an economy emerging from deep recession.
And in they poured.
They weren’t supposed to go mad looking for money by milking the lovely tax breaks until too many suffered and too many noticed. They should have confined themselves to reaping lucrative returns from commercial property and nondescript apartment blocks full of students, young buckos and renters who can’t afford to buy their own place.
They weren’t supposed to start muscling in on proper suburban houses built for people who want to raise a family and set down strong roots in the electoral register.
Fianna Fáil, now in government with Fine Gael, can't say the party didn't foresee the horror show that became The Rise of the Reits. In his time as leader of the Opposition, Micheál Martin often cast a critical eye on their dealings and an equally critical eye on Fine Gael for allowing it. Darragh O'Brien, his housing spokesman, promising to clean up the situation, prepared legislation in 2019 to do just that. But he wasn't in government then.
But Darragh is all set to move on the Reits. Rarin’ to go. He just needs to take a good run at it first.
Further analysis
He told Morning Ireland on Tuesday that further analysis would have to be done before he acts. Outright banning of these companies (was anyone suggesting that?) "would be a pretty radical move and might have unintended consequences".
It was pointed out more than once to his boss in the Dáil on Wednesday that Germany managed to do it, banning such wholesale investment in specific areas of housing as opposed to the entire property market.
Cian O'Callaghan reminded the Taoiseach that the Construction Industry Federation said in 2009 that 95 per cent of new apartment builds in 2009 were bought by these funds. Was the Government only interested in protecting houses in the suburbs? What about apartments?
This is when Micheál broke the news of the new variant – the purchasing of entire estates. New to him, that is.
Social Democrat co-leader Catherine Murphy told him of other estates in Kildare which have been similarly bought over by these financial cuckoos who arrive with their fat chequebooks and special tax breaks and elbow out ordinary buyers from their chosen nest.
“How are ordinary buyers who scrimp and save for a mortgage supposed to compete with this?”
The Government has to do something. People who hoped to buy one of the new houses had no chance. The local council couldn’t match the swooping vultures either and the local housing trusts, also interested in acquiring some of the homes, were bankrolled out of buying by the cuckoos.
“There’s a skewed ideology at play here,” she said, promising that “every one of us” would sit overnight or for the weekend if they had to pass legislation.
The Taoiseach was very sympathetic. “In respect of that swoop-in by that investor, we are going to deal with that. That is not acceptable.”
Factory ships
But it gets worse. These Reits are like international factory ships, steaming into Ireland and indiscriminately hoovering up all sorts of housing stock.
Duncan Smith revealed that first-time buyers are not just losing out on new homes. The investment funds are leaving young couples “absolutely devastated” by sniffing out second-hand homes that might be within the reach of first-time buyers and offering over the odds before they even hit the market.
“What is happening is insidious.”
Sinn Féin, particularly its housing spokesman Eoin O'Broin, has been calling for a number of years for the tax loopholes which give these global financial machines a huge advantage over local buyers to be closed. Richard Boyd Barrett of People Before Profit has also long complained about the actions of the funds and brought the personal stories of powerless people's lives turned upside down by them.
Mary Lou McDonald was the first at Leaders’ Questions to demand action, and quickly, from the Government. She was followed by a succession of speakers from all Opposition parties.
Even the venerable Bernard Durkan, Fine Gael stalwart, wanted to know what emergency legislation is planned. As a Kildare TD he is well aware of the housing heartbreak in the constituency.
Outside the Dáil, Tánaiste Leo Varadkar limply said the situation is "undesirable".
Meanwhile, Darragh (let’s not be too radical) O’Brien said what is needed is “a whole-of-government approach”.
The Taoiseach indicated that O’Brien, along with the Minister for Finance and the Minister for Public Expenditure, was working on a plan. But despite fevered demands from the Opposition to hear more, details there came none.
In a novel twist, Labour Senator Rebecca Moynihan promised the party will introduce Darragh O'Brien's 2019 Bill "word for word" if he doesn't do it himself before the end of the week.
Time for the Government to swoop and put this bad cuckoo back in its clock.
Otherwise it will be the voters who are calling time.
