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UN slams role of global funds

Scathing attack on government and NAMA role in creating housing emergency

THE SCATHING criticism by a human rights working group of the United Nations of the Government’s failure to meet its obligation to deliver affordable, public housing will not surprise those experiencing the unrelenting rise in homelessness and the cost of rental accommodation. What is new in the letter written by Surya Deva, chief rapporteur of the UN Working Group on Human Rights and Transnational Corporations and Leilani Farha special rapporteur on Adequate Housing is the detailed critique of NAMA and its role in the financialisation of housing in Ireland.

In a letter delivered to the Government last week, the UN investigators claimed that over 90 per cent of loans sold by NAMA have gone to international, mainly US funds. It further stated that NAMA and the introduction of Real Estate Investment Trusts (REITS) as well as the sale of non-performing loans by State controlled banks, have contributed directly to the housing and homeless emergency.

“Our chief concern lies with those laws and policies which have allowed unprecedented amounts of global capital to be invested in housing as security for financial instruments that are traded on global markets, and as a means of accumulating wealth”, the letter from Deva and Farha asserts.

“This expanding role and unprecedented dominance of unregulated financial markets and corporations in the housing sector is now generally referred to as the ‘financialisation of housing’ and it is having devastating consequences for tenants. Contrary to international human rights obligations, investment in housing in the Republic of Ireland has disconnected housing from its core social purpose of providing people with a place to live in with
security and dignity`’.

They are also critical of the failure of successive governments to build public housing, particularly since the 2008 financial crash.

“Central to the Government’s recovery strategy was the introduction of austerity measures, a programme of ridding domestic banks of non-performing debt assets and increasing levels of foreign financial investment in the domestic housing and mortgage market. Sweeping cuts were introduced notably to the public housing capital construction budget – from €1.46bn in 2008 to €167m in 2014 – which was disproportionately severe. As a result, newly built social housing fell from 5,300 units in 2009 to 1,000 in 2012 and then an effective ceasing of the social house-building programme with just 476 units built in 2015. Between 2005 and 2017, the number of families on the social housing waiting list increased by 100% from 43,000 to 86,000.”

However, its identification of NAMA as the key instrument for transferring public assets on a vast scale to vulture funds and effectively making people homeless is particularly stark.

The letter states: “Owing to the heavy deregulation of foreign investors, and the legislative changes introduced to make Irish property markets more attractive to these investors, the sale of non-performing loans and securitised assets to foreign private financial institutions has increased exponentially. Of all assets sold by NAMA, 93% have gone to foreign investors, with 90% being sold to US private equity funds. By 2016, one third of all properties sold in Ireland were being purchased by investors.” NAMA has sold some 110 billion in loans as well as other assets worth some 124 billion since its inception including lands on which an estimated 50,000 public and affordable homes could have been built.

The authors point out that “heavy private housing investment combined with the cuts in the public housing budget has been making housing in Ireland significantly unaffordable.”

This is made worse, they argue, by land hoarding with investors sitting on vacant land to restrict supply and thus increase demand and value.

“Private equity landlords, such as Ireland’s largest landlord, I-RES REIT, have openly discussed policies of
introducing the highest rents possible in order to increase returns for shareholders. The recent report by the Department of Finance notes that these large REIT investor landlords are playing a key role in setting inflated market rents in certain areas. Private housing investment, and the related increased unaffordability and availability it has generated, has also impacted security of tenure. Property investors (and investor landlords) are known to push tenants and owners out of their homes by taking possession, evicting, or creating conditions to compel tenants to leave – such as vastly increased rents or using loopholes in rent legislation.”

Hopefully, the will be passed on to Eoghan Murphy and his officials in the Department of Housing.

Frank Connolly is the author of NAMA-Land (Gill Books 2017)