Letters to the Minister #3: Berlin cracks down on Airbnb rentals to cool market

From: Macdara Butler <macdara.butler@gmail.com>
Subject: Berlin cracks down on Airbnb rentals to cool market
Date: Sun, 1 May 2016 13:45:44 +0400
To: Leo.Varadkar@Oireachtas.ie, Minister@finance.gov.ie

Dear Ministers,

I refer to our correspondence from the last 2 years in relation to the pressing and urgent need for government intervention in the private housing sector, particularly in the Dublin area, in order to protect the continued development of our knowledge economy and our thriving tech sector, in which I work.

Continue reading Letters to the Minister #3: Berlin cracks down on Airbnb rentals to cool market

Letters to the Minister #2: Dublin Housing Market 03-AUG-2015

Date: Mon, 3 Aug 2015 17:15:06 +0100
Subject: Re: Dublin Housing Market
From: Macdara Butler <macdara.butler@gmail.com>
To: “Minister,” <Minister@finance.gov.ie>

Dear Michael,

it is over 18 months since my last correspondence and your monetary controls through the Central Bank intervention in the property market has been successful in quelling the rapid growth of Dublin property prices. I would like to firstly acknowledge this successful action and your excellent continued steering of the national economy.

While property prices have now stabilised it has only addressed one small part of the crisis in the Dublin housing sector. Furthermore the caps on lending have forced a large number of people back into the rental market for a much longer time period who otherwise would have bought properties (albeit at inflated prices).

Issue No. 1

Dublin Rental Market – now accounts for an increasing proportion of all dwellers who will rent for life. Major problems with cost, quality, health and safety, taxation leakage, etc.

Issue No. 2

Quality of New Housing – new units are being made smaller and smaller and concentrated into congested lots that nobody will want to live in. Why can’t we learn from the mistakes of the past and enforce higher specifications for new builds, larger rooms, more space for people etc.

NAMA

We now see NAMA proactively driving up rents and house prices and driving down housing quality across Dublin by pursuing short-term destructive policies to get a return on its portfolio. NAMA is trying to use property prices to fix the problem that gave rise to its very existence, property price inflation…

Una Mullally wrote an excellent article in the Irish Times on how this mess is transpiring: https://goo.gl/EsizQJ

Drivers of Real Growth

It is clear that the real growth in the economy, in tax revenues and the associated multiplier effect of the past 3 years are being driven by 2 big
sectors, Multinational High Tech jobs and our Food & Drink Exports. Obviously the Tourism sector plays a role but its not that significant
compared with the other two.

My research shows that 85% of the 100k jobs in the Irish software industry are with multinational firms, primarily from the US, and most of the jobs are concentrated in the Dublin area.

The scale of the housing problem in Dublin rental market is absolutely critical in this context, it is forcing up wage rates in a dangerous spiral
and the poor quality of accommodation is making the city unattractive for people with the much needed labour skills we need to attract and relocate here to sustain our EU digital hub status.

Even worse the cost and poor quality of rental accommodation is threatening the sustainability of Dublin as a centre for multinationals to locate here as wages continue to grow rapidly, chasing after rental accommodation prices. Property prices have stabilised with the Central Bank intervention but a lot of people in Dublin are not looking to buy property and may well be life-long renters.

New Approach

We need a bold vision for a Dublin where everybody living here has access to spacious, comfortable housing at an affordable cost. Basically we need somebody with the political courage to dismantle the Dublin property and rental markets and recognise that this ‘rent-seeking’ speculative sector is extremely damaging to our knowledge economy and to real economic growth and sustainability.

We also need regulation of the rental sector as a matter of extreme urgency, it is incredible given our tight regulation of restaurants, taxis etc that there are not even basic legal standards enforced for renting property in Ireland.

We need strong government intervention and a massive program of Compulsory Purchase Orders and dereliction orders to renovate the city centre and prevent the urban sprawl we have now that demands hugely expensive infrastructure programs to support that are not sustainable for our small population and low density.

Until such time as this happens Ireland’s political landscape will remain volatile and I believe it will radicalise younger generations into supporting parties like Sinn F=C3=A9in which could be very harmful to the country in the long-term. We have a capital city that provides a patently unfair quality of life for the various tiers of society, a modern society which is dominated by a legacy of vested land-owners and landlords.

Right now the immediate actions that need to be taken and can be taken are direct interventions with NAMA and the various planning authorities who are allowing the construction of sub-standard living accommodation that nobody will want to live in and thereby is creating an aftershock legacy of the 2007 property crash that will stay with us for 30-40 years.

We need to plot a different course for Dublin and for Ireland, this is not New York or London or some other place where gross inequity is tolerated or accepted. We need to set our standards now for ourselves and our future generations based on our reliance on international trade, knowledge and
skills, not on speculative property and rental incomes.

Thanks for your time
Macdara


REPLY

From: Minister <Minister@finance.gov.ie>
To: macdara.butler@gmail.com
Received: from mail.itservices.gov.ie
Date: Mon, 24 Aug 2015 09:02:38 -0700 (PDT)

Department of Finance, Office of the Minister
________________________________
Upper Merrion Street,
Dublin 2,
Ireland.

http://www.irlgov.ie/finance

15/2614/MF

Macdara Butler
macdara.butler@gmail.com<mailto:macdara.butler@gmail.com>
24 August 2015

Dear Mr Butler,
The Minister for Finance has asked me to thank you for your email of 3 August 2015. The contents of your email have been noted by the Minister and the relevant officials in the Department.

Yours sincerely,
_________________
Alex Lalor
Private Secretary

Letters to the Minister #1: Dublin Housing Market 19-JAN-2014

Subject: Dublin Housing Market
From: Macdara Butler <macdara.butler@gmail.com>
To: minister@finance.gov.ie

Dear Mr. Noonan,

I would like to firstly extend my support for your management of the Irish economy of the last 2 years which has been reassured and balanced.

The reason I am making contact with you is to highlight some of the emerging major structural issues with the housing market in Dublin.

I am an Economics graduate of UL myself so I believe I am well informed and balanced on this subject. The Dublin rental market is not fit for purpose and the rental stock in the central areas of the city is of a very low quality. The property market seems to be rapidly overheating with the emergence of “cash buyers” who are blocking young families from acquiring their own homes

Rental Market

The rental market is under served in Dublin and with the influx of high-skilled workers for the IT and Finance knowledge economy jobs there is a major structural problem. If people can’t get affordable, high-quality rental accommodation nearby there place of work, then economic growth is going to be severely impacted. Those people will simply move to other less desirable cities where their standard of living can be sustained.

I believe that the rental market needs a comprehensive regulatory system put in place with a rating system and with powers linked to the Health and Safety Authority.

Recently you might have seen the house burned out on Thomas Street where a large number of people were living which was in a very poor state of repair. The health and safety standards of these old buildings are so far below the standards it is incredible, particularly when one reflects on the Priory Hall situation.

By introducing regulation you will be able to stimulate jobs and regeneration within the city in the construction sector, the private owners will self-fund the upgrades.

Property Market

As you are aware the property market in Dublin is beginning to overheat at the moment with asking prices for private residences soaring 20% to 30% in January alone, and right across the city.

Obviously the market needed to recover to a normal level but the legacy of the credit crunch and the property bubble of 2007 has left some structural issues in the monetary system.

We are seeing a massive transfer of wealth whereby private investors are buying up all of the available properties, outbidding young families
looking to purchase a home and take up a mortgage.

Your department needs to intervene immediately with some policy instruments to cool down this phenomenon and send some signals to the internal market
also.

There are huge social and economic consequences if Dublin becomes the new London, a 2-tier society controlled by a super-rich elite who own all of the property in the desired locations. That outcome is not what the people of Ireland want and your government must do everything possible to keep Ireland a society where social mobility is very high.

I don’t know the solution to this complex issue but I would imagine some heavy taxing of investor purchases would have the desired deflationary
effect.

As a 32 year old Irish citizen it will be my generation that has to live with the consequences of decisions and actions that are taken or not by the
current government, I have no doubt you will be elected for a 2nd term also of course.

Yours sincerely
Macdara Butler


Mr. Macdara Butler
6 Collegewood
Castleknock
Dublin 15


REPLY

 

From: “Minister,” <Minister@finance.gov.ie>
To: “macdara.butler@gmail.com” <macdara.butler@gmail.com>
Subject: RE: Dublin Housing Market
Date: Tue, 6 May 2014 13:10:35

I acknowledge receipt of your email. Your correspondence will be brought to the attention of Mr. Michael Noonan TD, Minister for Finance and to the relevant officials in the Department of Finance. If the content of your correspondence relates to the functions of the Minister for Public Expenditure and Reform, Mr Brendan Howlin TD, it will be forwarded to his Office for attention.

Yours sincerely

Alex Lalor
Private Secretary to the Minister for Finance

Good Ideas for “The Recovery”

Here is a list of good ideas that I have heard in the media in relation to stimulating our small, open economy in Ireland:

  • Green energy projects can reduce oil-dependancy and create long term employment that is sustainable and boosts local economies
  • Free travel for over 65’s visiting Ireland as tourists, remove the 10 euro tax also
  • Build recycling centres and hire local recycling promoters to take people off the dole queue
  • Knowledge Loans – banks give people favourable loan terms to people for approved 3rd level courses
  • Your comments and suggestions are welcome!