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Budget Statement 2018 (Continued)

Tuesday, 10 October 2017

Dáil Éireann Debate
Vol. 960 No. 1

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(Speaker Continuing)

[Deputy Mick Wallace: Information on Mick Wallace Zoom on Mick Wallace] You could not make it up. Why are people talking about this as if it were a tax on landbanking? It is not. We need a tax on landbanking. The average price of a new house in Dublin has risen to €460,000. Within 15 km of the centre of nearly any other city in Europe, a house can be bought for €150,000. What are we doing selling them for €460,000? I guarantee we are going to have another crash. The Government is building it. It will be quicker this time; it will come around sooner. We are bound to have one. The Government is doing everything perfectly for a crash to happen. The Minister is now talking about engaging NAMA with funding in this new scheme he is on about. The idea of funding builders to build when the banks will not give them the money is a good idea but, for God's sake, the Government should keep NAMA's hands off this. I keep hearing people say, "Let us use NAMA's expertise." It does not have any. It has no experience - I am sorry, I am hoarse.

Deputy Martin Kenny: Information on Martin Kenny Zoom on Martin Kenny The Deputy must have been shouting last night.

Deputy Mick Wallace: Information on Mick Wallace Zoom on Mick Wallace It has no experience in the property game or in housing. There is no one on the board with any experience in this area. Between late 2016 and the first five months of 2017, 91 of NAMA's staff have left. Anyone who is any good is getting out of the place because its name is muck now and they do not want anything to do with it.

I will outline part of the problem. Tallaght Cross West went sale agreed in January 2016. NAMA sold the 442 apartments of the development to I-RES REIT. They worked out at about €100,000 each, whereas the average new house in Dublin today costs €460,000. The full price of the sale was €83 million. There was €40 million worth of commercial property and €42 million worth of residential property in the sale. What are these fellas doing with it? They are probably renting them and they will sell them for a bomb when they feel like it. Honeypark in Dún Laoghaire started in 2013. It comprises 800 units. Cosgrave is building it and NAMA is funding it. In December 2015, NAMA sold 180 of the units to a fund called Mercury at €360,000 per unit. What did Mercury do with the units? They were presold, built and rented. They never even saw the market. Why would they? NAMA - the State - is coming up with money to build out projects, and what does it do with them? It sells them to the vulture funds. What a great idea. That will really solve the housing crisis. I put out a press statement last Friday about a site on Castleforbes Road in the Docklands, the Northbank apartment block. There are 46 empty apartments in the development and NAMA has them. NAMA has just bought seven it did not already control. There are 124 apartments in the whole development. It bought the last seven so it could control the whole development and put it on the market to get a vulture fund to buy it. Why would we want to give apartments to vulture funds when we have a housing crisis? Will anyone in the Government ask NAMA why there were 46 empty units in that complex? Some of them have been empty for three years. This is nonsense. Does the Government want to fix the housing crisis? One would be unwell just thinking about it. It breaks my heart.

The Minister, Deputy Coveney, established last year that we can build a three-bed house in Dublin for just over €200,000 because we have our own land, we can supply the house and, obviously, we can get away without the levies, the planning contributions. The State could therefore supply three-bed housing in Dublin for somewhere in the region of €205,000 back in December; let us call it €230,000 now. Why would we want NAMA building houses which it will sell for about €400,000 with State land? What is the clever plan there? I do not understand it very well. I do not see much logic in it. I would love to know where the rationality comes in. It is madness. I get the impression from the budget that the Government thinks that things are great now and that the economy is rising. It is improving by about 5% a year. Things are pretty good for perhaps about 50% of the population. That may be a bit of an exaggeration. Perhaps it is somewhere between 40% and 50%. I swear to God, there is a rising level of inequality in this country that I have not seen in my lifetime. I am over 60 years of age. I have never seen the level of inequality we have today. We are going down the tubes. I am not a pessimist; I am an optimist. However, we are not running the country in a fair way. Why do we not do it? Why do we not run the country properly? I do not understand it.

In September 2016, the Minister, Deputy Coveney, announced a local infrastructure housing activation fund, with the intention of addressing affordability. It was abandoned in March 2017. A total of €226 million was given for infrastructure for sites, but there was no agreement to provide affordable housing, which was the plan in the first place. Government policy is driving up the price of housing and rents. I see the Government is now introducing a measure to address capital gains tax, that it will bring it back to four years. The Government is retrofitting a big screw-up on the part of the previous Minister for Finance when he brought in a system that encouraged the REITs to come in and buy up all the distressed property for peanuts from NAMA and the banks and get a cartel controlling influence over the rental market in Dublin. That is what they have today - the REITs: I-RES REIT, Hibernia REIT and God knows what next. We now have huge foreign money controlling our rental market. Is that a good idea? The Government wants to get rid of the amateur fella who only has one or two properties, but we cannot afford professional landlords. The latter are boasting about the fact that they can now get €2,200 a month for a two-bed and up to €2,800 for a three-bed. They are saying the prospects look good for the next couple of years and it is going up, not down, because we do not do anything about managing it. It is the Government's responsibility to manage but it is not managing.

To go back to NAMA for a minute, there is so much conflict of interest in how it operates. There are four-bed units in the development in Dún Laoghaire to which I referred. They are selling for €700,000. We are organising State money to build houses to give to developers to build and sell for €700,000 when we could be using that land to provide not just social housing, but affordable private housing as well. We are not doing it.

Connor Owens was hired by NAMA in June 2012 and became deputy head of asset recovery in October 2014. Prior to his appointment, NAMA's Conor Owens was a founding director in May 2010 of a property company called Core Asset Management. It was established specifically with the backing of some American money, with the aim to purchase distressed properties from NAMA and from struggling investors and developers in Ireland. After starting Core Asset Management, he appointed Bill Nowlan of WK Nowlan & Associates, an adviser to NAMA, as a director and core shareholder of Core Asset Management in August 2010. Bill Nowlan would go on to serve as a director of Core until November 2013 and had shares in it until 2014. He was giving NAMA advice, and these guys were controlling funds that were buying property. Why does no one care that NAMA is ridden with conflict of interest? Honestly, I will be tempted to leave the country if the Government gives it a role in trying to solve the housing crisis. The Government might say "good riddance" and do it to try to get rid of me. It is crony capitalism.

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