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THE GOVERNMENT WILL support legislation being brought forward by the Social Democrats to end the practice of long-term home leasing deals with cuckoo funds, rather than buying social or affordable homes.
The legislation, drafted by Social Democrats Housing spokesperson Cian O’Callaghan, will be debated today in the Dáil, with Taoiseach Micheál Martin saying that the government will not oppose the bill.
It comes after Labour’s Housing spokesperson Rebecca Moynihan said yesterday that if Housing Minister Darragh O’Brien doesn’t reintroduce his 2019 bill to block cuckoo funds, that Labour would reintroduce it word-for-word.
“Last week, the carnage being caused by cuckoo funds was put into stark relief when one fund block-purchased 135 family homes in Kildare,” said O’Callaghan.
“Since 2018, investment funds have spent €4 billion on residential property in Ireland. Ordinary buyers, who have to scrimp and save for years for a deposit, cannot compete with these multi-billion-euro funds.
When funds buy these homes, they turn them into rental properties. Often, they are leased to the State, for social housing, at exorbitant rents. The State pays the mortgage in these deals, while the cuckoo funds keep the homes.
O’Callaghan says that while a measure was taken to allow councils to continually add to their housing stocks by being able to buy 10% of new housing developments, this was quietly amended to facilitate more long-term leasing deals with investment funds.
According to O’Callaghan, rather than buying the properties, councils are entering into long-term leasing deals with “eye-watering rents” for up to 30 years. At the end of this period, they would have to return the properties to the investment funds.
While O’Callaghan has welcomed the government’s support of his bill, he regrets that the government has taken so long to get to this point.
It comes as Minister O’Brien received cabinet approval for his Affordable Housing Bill on Tuesday.
Several aspects of the bill have received criticism, including its shared equity scheme for first-time buyers.
Caps for affordable housing will be introduced, with prices as high as €450,000 in areas like Dublin City and Dún Laoighaire, with the lowest price caps set at €225,000 for Cavan, Donegal, Leitrim, Longford, Mayo, Monaghan, Sligo and Tipperary.
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SF have brought motions forward to stop this for the last 5 years. The now housing minister called for this practice to be banned himself in 2019. This could have been stopped long ago. The only difference now is the Government’s developer focused housing policy has been laid bare.
@Daryl Walsh:
Bring in a Vacancy Tax, and I think you’ll see things change considerably.
@Daryl Walsh: why did Sinn Fein fail to bring forward a bill on this over the last five years instead of more motions?
@Ciaran O’Mara: yea that’s who’s really to blame here. The party who has never been in power. Not the parties who purposely set out policy to enable and encourage vulture funds to act like this.
@Ciaran O’Mara: it’s never SF’s fault
@Patrick O Connell: ah Patrick c’mon now man, you’re beloved FG invited the Vultures into Ireland told them that they won’t have to pay tax. But here you are trying to blame SF. You should have more sense.
@iohanx: There is a Vacancy Tax called the Urban Regeneration and Housing Act, 2015. Under this Act, from 1 January 2017 each local authority is obliged to introduce a vacant site register. With impunity, many councils refuse to comply with this law. As an example, reported in the 2016 census, County Galway had 10’279 vacant properties. The link at the bottom of this page; http://www.galway.ie/en/services/planning/planspolicy/vacantsites/ points to; http://www.galway.ie/en/media/Vacant%20Sites%20Template.docx, which is an empty template document and not a vacant register. So should we bring in another law that won’t be enforced?
People are finally waking up to the shenanigans of FFG, with the help of the Greens, and the special treatment accorded to their big business friends. Wipe-out time at next General Election but how much additional damage will they have done to the country by then?
@Jack Cass: It’s beyond messed up that there’s now a cultural acceptance for young adults in this country to face a decision between living with their parents into their 30′s or even 40′s, getting stuck in a rent trap forever and never being able to afford a house or just simply emigrating.
Not to mention the two recessions with the same demographic bearing the bulk of unemployment for both. The long term effects will be profound
@Jack Cass: I wish it were so. But remember, FF completely destroyed the country before and they were only out of power for one lousy term. The sheep keep voting for the wolves. However, the younger gen will replace these stubborn voters. I just hope it happens soon. Housing issue is over a decade long and the same steps keep happening. People see what they’re doing > the parties doing it promise change > people vote for them > change doesn’t happen
@Rob Gale: ya calling people sheep for not wanting may leftist in power, that’s the way to get us normal people to vote for ye.
@Daniel Roche: normal people are priced out of the market for being unlucky enough to have been born at the wrong time
Varadkar calling for change to address the housing crisis now despite FG in power the last 10 years when it got worse and worse.
@RogersRabbit: All part of the facade and the public never learns. Guess which party is topping the most recent opinion polls?
@RogersRabbit: and the worse part of that is… they have no option now but to act and will take all the credit when its implemented even though they’ve had to be forced to do it now after ignoring it for the last 10 years. I can already see it on a Live Debate “Our government implemented the banning of cuckoo funds, we done that while in Government” it turns me absolute gut. Doing the same with Insurance, Riding the back of Pearse Doherty on that one, Varadkar has already publicly tried to claim it. Its as much embarrassing as it is frustrating.
@RogersRabbit: only a few months ago he said vulture funds are actually good landlords. And only a few days ago he said we should be thankful for vulture funds as a lot of property wouldn’t have been built without them. He’s only changing his tune because it’s in the public eye again. His gov. set these conditions in place for vulture funds to take advantage of, now he’s acting like it was some ages long written policy in place long before they were in power. His comfort in lying matches his general hollow suit persona.
Noice to see. But. It’s of no real use unless it has a means to take back all the properties the funds have bought up. Thousands of houses and apartments across the country.
@Dave Gillen #wearamask #noToRacism: Spot on.
So these vulture funds will still be perfectly entitled to purchase entire estates and still not be financially penalised from doing so.
This is only to stop the state entering into long term leasing deals with them?
Exactly how is this going to stop the vulture funds hoovering up property?
@Cookie: Because us regular folk can’t afford the inflated rents these vulture funds charge… so if the state can’t enter into leasing deals with them… who’s going to rent their properties?
Why are the media rebranding these Vulture funds as “cuckoo funds”? Is this to make them seem less threatening? This seemed to be started by FF and FG and the media has picked it up and ran with it.
@Daniel Muldoon: they are different types of undesirables in these circumstances.
https://www.auctioneera.ie/vulture-funds-cuckoo-funds-co-living
FFG finally realising they won’t survive another election unless they do something to show they actually care about the housing mess in this country….
@Tarraing Mo Liathróidí: It’s too little and too late for them now. Bye bye FFG, good riddance. See you all in hell!
@Tarraing Mo Liathróidí: the problem is that the main opposition party are in charge of a similar, if not worse, mess up North.
@GrumpyAulFella: Well at this stage taking monkeys from Dublin zoo and having them replace FFG would be an option I’d go with than to have these lot wreck another few generations chances of owning their own home
@GrumpyAulFella: struggle to see the relevance of this constant comparison… two completely different situations being governed on completely different circumstances, with completely different strategies and completely different means. There’s no conflicting countries on the same run within our government… look how backed into the corner FFG are of late. ALL opposition parties are doing something right. Just a pity FFG will take the credit for everything they are being rightly forced into doing. Wats the saying… a lot done, more to do… (insert sarcastic emoji here)
@Christine Hanway: ah but it’s the clasdic old fine farmer chestnut they love to break out “the alternative is worse!!” ” The north! The north! Won’t someone please look at what they’ve done to the north” truth is we have no idea how SF would fare because we’ve been a two party system since the foundation of the state. Assuming they’re not pulling a labour and lying through their teeth about their policies I can’t see how they could possibly be worse than what we have now.
@SJF: *Fine Gaeler
I commented it on another story, but relevant here to, I don’t get why the government would not buy the lands themselves, divide the plots, create the infrastructure, and just sell plots to individuals so they can build their own home?
Put guidelines in place so houses don’t look out of places (color scheme, size range, ect), have to be built by an expert (as oppose to do the work yourself).
And as it is government, sale the plots without profit. Prices would be more affordable, it would create a competition for the builders and prices would be more affordable.
@Michael Legris: easier to build a hundred homes at once than in ones. It would end up a mess. However the government should build homes and sell them at a reasonable rate
@Virgil: Government are not building the homes, but selling the plots. Let people build what they like (within guideline). Create a competion between builders, and stop the rabbit cages like 3 bed houses when actually one of the bedroom is only a cabinet that would not fit a double bed …
@Michael Legris:
Vegetables!
Under your innovative suggestion, you could build a substantial veg business from the plot, especially in the early years, whilst awaiting planning permission from local council and dealing with endless objections from your neighbours, the local tree huggers, Archaeologists and Friends of the Earth.
Good luck with it!
@Rory J Leonard: Why, they are building an estate and selling you a plot with planning for a family home pending review of drawing (to see if it fits with the guideline).
It’s been done in France for 30+ years (my family and friends all use these sort of estate to build their homes).
@Rory J Leonard: Guideline could be: Leave 3 metres between plot boundaries, front of the house between 5 and 8 meters from the front of you plot, house no more than 9 meter deep and roof pitch no more than 8 meter tall. Use of 50% red bricks in the front. Roof have to be black slates , ect ect. Let local authorities think of their own guideline to create something harmonized.
From there, let people be creative and submit their plans for review.
@Michael Legris: stop will ye.
Soooo….developers build for profit homes on government land which are then bought up en masse by cuckoo funds who lease thses homes back to the government at exorbitant prices and pay zero tax on rental income thanks to tax schemes introduced by…the government….why don’t we cut out the middle man and just deposit a large chunk of taxpayer money into the vulture find bank accounts every other week…you get what you vote for people.
We’ll just have to bite the bullet and make it easier for banks to seize properties that aren’t paying their mortgages. It’s most of the reason banks offload properties to these vulture and cuckoo funds.
@Shaner Mac: They are buying up newly built estates that were supposed to be for first-time buyers. After 2008 they were buying repossessions but now that isn’t as much of a problem as the government is making out. The government would have you believe that these funds are doing us a service when really they are sending us down a dangerous road. They like other European countries are allowing these funds to come in to build the financial market here in Ireland for investors where nobody will be able to afford to buy and will have to rent. At at today’s rental rates its good for investors, bad for the people who have to pay it.
@Daniel Muldoon:
All government is doing since 2010 is implementing the terms of the loan to Ireland and international agreement monitored by commission.
Commission need government ( taoiseach and minister elected by Dail) to make domestic law and govt needs TD votes to do that.
The DAIL is real centre of power in this country whose members account to us BUT voters not holding TD to account for not delivering election promise Dail. Huge cost.
We grossly grossly underestimate our DAIL in this country.
This bill showing some sign of change and dail working that government support. Thank god
A lot more legislation and in particular security of tenure this b
@Daniel Muldoon:
These funds are after Yield, simple as that. Traditionally builders would sell off plans to get the finance to start building. This is not happening as builders can complete whole estates, apt blocks prior to begin selling. This is as a result of cheap money and fund buyers etc. Now that economy is bouncing back government should target the Yield with taxes, vacancy tax, rent caps and renter rights. Overtime make the funds sell the properties because yield not worth it. Tax them etc.
Who and why was Part V of the Planning and Development Act 2000 Act changed? What lobbyists were involved. Who’s ‘friends’ where sent copies and was any ‘lovely bags of sterling involved?
‘this legislation was quietly amended to facilitate more long-term leasing deals with investment funds.’
Not quite it was changed in 2017 by former minister Eoghan Murphy. Who strangely has just left politics before this story broke. A politician who preached about accountability in public life but has avoided it himself.
Scavenger funds they should be called
These reit trusts are bought globally I remember in the early 90s in australia they were trying to stop them ,they are all over usa ,Canada , etc. they are usually chinese and disguised as not.
Why are you calling vulture funds cuckoo funds? So a housing crisis created by ffg is solved by ffg maybe and they want a pat on the back…ffs
michael lergis, stop will ye.
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