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