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.

The Laissez Faire economic policies we have been pursuing in housing are not serving the economy well and there’s also a huge opportunity now to get things right and show leadership on this issue.

As you can see from the article below, our German counterparts are managing this issue very tightly in order to protect both the economic and social cohesion of their capital city: https://www.yahoo.com/news/berlin-cracks-down-airbnb-rentals-cool-market-035857478.html

Until we have a radical new government policy in Ireland on private housing, I would argue that our economic sustainability hangs in the balance. Also there is a societal risk wherein Dublin is becoming more like London, whereby a sustained transfer of wealth to ‘landlords’ has resulted in a class-based ‘feudal’ society, the emergence of ghettos, deep rooted social problems and a lack of social mobility which is essential to any functioning democracy.

Property speculation and rigidity in the private housing sector is referred to as rent-seeking economic activity, the landlords are a non-productive sector and actually have a destructive effect on economic growth. Similarly one could argue that powerful trade unions and protectionist trade embargoes also create blockages in the economic system, in the tech sector we refer these kinds of phenomena as ‘anti-patterns’ when we find a poorly designed technical solution or approach in existence.

I would love to meet you both in person at some point to discuss these matters further if that was possible. One shudders to think that Fianna Fáil will be back in power soon and your party will not have been able to put in place any safe guards against their next ham-fisted attempt to solve this complex issue. Without doubt and at the first opportunity when back in power they will put through a concessionary budget based on populist and short sighted incentives, akin to the disastrous tax breaks that they introduced in the early 2000’s.

Some of the best thinking on this issue has emerged through the Green Party and the Social Democrats in the past year, I would hope that you and your party colleagues would open a meaningful dialogue with these minority parties and take on board the innovative policies they are proposing as part of your programme for government.

Yours sincerely
Macdara Butler

PS – Please note I have included below my correspondence with Minister Noonan dating back 2 years where I raised attention to the overheating residential property market and proposed monetary controls, I sent this almost 6 months before the new mortgage caps were enforced. That intervention has been hugely successful but it needs to be just the 1st step of a 3-phase plan to solve this problem in the long term.

We now need to focus on:
a) regulating the quality of housing and putting real enforcement of living standards in place
b) enforcing compulsory purchase orders to redevelop high density city centre locations that are sitting idle and decaying
c) introducing funding joint ownership schemes to support individual families who can own 50% of a property with the government (similar scheme already in London).

Previous Correspondence

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

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

REPLY

Return-Path: <Minister@finance.gov.ie>
To: “macdara.butler@gmail.com” <macdara.butler@gmail.com>
Subject: Housing market
Date: Tue, 19 Jul 2016 09:24:57 +0000

Department of Finance Office of the Minister
________________________________
Upper Merrion Street, http://www.finance.gov.ie
Dublin 2, D02 R583
Ireland

Dept. Ref: 16/0882/MF

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

19 July 2016

Dear Mr Butler,

The Minister for Finance, Mr Michael Noonan T.D., has asked me to reply to your recent correspondence, dated the 1st of May, in which you highlighted
the importance of effective policy intervention in the housing market.

The Minister would like to thank you for your email, in particular for highlighting the importance of ensuring a fully functional housing market which meets the needs of the people. The Minister wishes to assure you that the government is aware of the serious risk which the current supply constraint poses to our economic recovery.

With regards to your concerns about the private rental market the Minister would like to highlight the range of measures announced under the Stabilising Rents, Boosting supply package in November 2015. In particular the short-term rent stabilisation measures and the enhanced regulatory rights and obligations for landlords and tenants which have now been legislated for under the Residential Tenancies (amendment) Act 2015. The Government remains committed to striking an appropriate balance between the rights and interests of both tenants and landlords.

In the Programme for a Partnership Government a target has been set to delivery 25,000 new housing units per annum by 2020. In order to deliver on this ambitious target the Government will publish the Action Plan for Housing.

This Action Plan will set out a number of time bound and targeted measures designed to address the outstanding bottlenecks and help restore the housi
ng sector to a sustainable equilibrium.

The Minister would like to thank you for your proposals and once again assure you that the development of a sustainable property market that meets the needs of the people is a key priority.

Yours sincerely,
_______________
Mr Justin Dolan
Private Secretary to Michael Noonan T.D.
Minister for Finance

Private Secretary to the Minister for Finance. The Minister is a Designated Public Official under the Regulation of Lobbying Act, 2015 (details available on www.lobbying.ie

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