Dáil debates

Thursday, 14 April 2016

7:45 pm

Photo of Mick WallaceMick Wallace (Wexford, Independent) | Oireachtas source

Most people would agree we have had a problem with how we do housing and with the construction industry for a long time.

Sadly, in the five years I have spent in here, I have watched things getting progressively worse rather than better. This week, the members of the Independents 4 Change group - myself and Deputies Clare Daly, Joan Collins, Tommy Broughan, Catherine Connolly and Thomas Pringle - introduced a motion to the House. I will give the background to it. Our motion proposes:

That Dáil Éireann:notes:
— the recent proposal by the Master of the High Court, Edmund Honohan, that the Irish Government pass emergency legislation to allow it to acquire suitable properties from foreign investment funds through Compulsory Purchase Orders, as a measure in addressing the housing crisis;

— that since this proposal was first publicly reported on, the crisis in housing has become even more acute; and

— that the cost to the State of such compulsorily purchased units would be less than the cost of building new units;
further notes that:
— to date, foreign investment funds have enjoyed access to property at deep discounts, thanks to the policies of the National Asset Management Agency (NAMA) and financial institutions operating in Ireland, even as Irish citizens and the State have been denied access to same, and that a system of compulsory purchase for suitable units sold in portfolios by banks and by NAMA would go some way toward rebalancing the deeply unfair and damaging advantage given to foreign investment funds, and toward addressing the housing crisis;

— innovative and radical proposals for tackling the housing crisis have come from a variety of different sources to date, with this latest proposal emanating from the judiciary, a grouping not generally noted for its radicalism; and

— the Government has to date failed to move any proposal adequate to addressing the scale of the housing crisis;
and calls on the Government to:
— give immediate and serious consideration to the use of Compulsory Purchase Orders as a mechanism for addressing the housing crisis; and

— immediately draft legislation to allow for compulsory purchase from foreign investment funds; draw up proposals as to the practical operation of such a scheme; and give effect to those proposals.

Regardless of the composition of the Government that is put in place this year, most people will agree that radical decisions are required at this stage to address the housing and homelessness emergency we are facing. The housing crisis is of course linked to the cessation approximately eight years ago of serious levels of local authority housing construction. That has had an impact on the whole sector across the board. Without a shadow of a doubt, we will not solve the crisis without resuming the construction of local authority social housing units. We have discussed many aspects of that requirement and there are many dimensions to it.

I will return to our motion in the context of the sale of a huge chunk of Ireland to foreign vulture funds. Much of this property was not made available to Irish citizens or to Irish businesses. We have seen the huge profits these vulture funds have made. I remember that when NAMA was established, the argument in favour of its creation, which was made to those who were arguing against NAMA, was that we would have a huge problem if we let the banks have a fire sale of all these stressed assets. The idea was that NAMA would hold the units before moving them when there was some form of a recovery. It was suggested that this would ensure the loss on those assets would not be too big. Instead, we got a fire sale. Anyone who has had the money to buy property from NAMA has made a fortune. Cerberus, for example, has spent approximately €4 billion on the purchase of assets on the island of Ireland with a par value of over €20 billion. It beggars belief that it got them so cheaply. I will be shocked if the next Government does not initiate an independent inquiry into how all of this has worked out because there are huge problems in this regard.

I suggest we need to look to the future as well. We need to take back some of this property. The vulture funds have bought huge chunks of residential units and development lands that are needed. Even though we have been looking at a housing crisis for a long time, the State has allowed NAMA to sell so much of what is needed to vulture funds for peanuts. It does not stack up. Before Christmas, NAMA signed off on Project Arrow, which involved a portfolio with a par value of €6.3 billion. It is a reported that NAMA sold this portfolio for €800 million. This relates mostly to property in the Republic of Ireland. Where is the logic in that? We are aware that houses cannot be built overnight. We have sold houses and apartments that have already been built to these operators for peanuts. It is time for the State to take serious action, for example by introducing a system of compulsory purchase to take back what we need to deal with the crisis.

We will not be able to provide all the housing we need as quickly as we would like. The Government has spoken about modular housing. We have given away properly constructed houses for a fraction of what it costs to put a modular house together. It has taken longer to build those modular houses than was initially laid out. Why not take back some of the property that is rightfully ours?

The facility that the vulture funds have had in purchasing these properties from NAMA and the financial institutions has not been available to the Irish. We allowed NAMA to sell property in such big bundles that Irish businesses could not even come near it. They could not even bid for it because they were not in the same league. We effectively said, "Only foreigners need apply" or "Only US vulture funds mainly need apply". This has distorted the market. Not only have we allowed these vulture funds to purchase huge tracts of housing, apartments and development land that we need but we have also given this property to them too cheaply. We did not interfere to stop NAMA, which is a State body, from doing this. We have not held them to account for what they have done. We have not questioned what they have done. We have seen the figures. The astronomical profits that have been turned over in such a short space of time from these NAMA sales are horrendous.

As Deputies will probably have read over the weekend, Cerberus was able to give Paddy Kearney's business a write-down of £250 million on property that was initially in NAMA. Cerberus could well afford to do so because it is hammering many others and will hammer many more in the future. The same company bought property from Bank of Scotland and Ulster Bank. There is a great deal of trouble coming down the tracks regarding many of these sales. We have refused to question what is going on. The manner in which NAMA has operated is the biggest economic scandal in the history of this State. We should start by stopping it from operating, establishing an independent inquiry into what it has done and introducing compulsory purchase to take back from the vulture funds what belongs to the people of Ireland.


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