Cassandra Voices

Tag: NAMA

  • Exit through the Vestry

    Vestry 

    /ˈvɛstri/                                         

    Noun

    • a room or building attached to a church, used as an office and for changing into ceremonial vestments.
    • a real estate investment trust (REIT), incorporated in the Republic of Ireland.

    There comes a moment when you discover a person the trajectory of whose business affairs appears to embody the rotten nature of Irish housing. Such people are often perceived as visionaries of the real estate market, top of their class in producing a return on investment through a system that permits widespread human suffering. One such visionary is Richard Moyles, director and largest shareholder of The Vestry General Partner DAC, one of Ireland’s most powerful landlords. Moyles is also a director of Be Lettings, the letting agent Vestry uses to manage its tenancies and properties. Characters like Moyles are endemic in our communities. We are told that their investments are what make the world spin. Sure, only for them, wouldn’t it all be so much worse? Or, as the American President laughed with the Taoiseach on the subject of the Housing Crisis, “It’s a good problem to have.” In this piece, I push against this narrative – with Richard Moyles as a touchstone, and paint a picture at the iceberg’s tip. This is not, however, Richard’s story. It’s the story of a mother and her young son with nowhere to go; the same story as thousands of other tenants whose lives are determined by the decisions of men and women like him.

    Jen has lived in an apartment in Dublin 1 for a decade, becoming Vestry’s tenant when the group acquired the property in 2021. Her son, Danny (aged 5), has known no other home. Vestry bought the apartment from Grant Thornton for €325,700, after the previous landlord went into receivership and Grant Thornton took control of the property. “The landlords were changing like socks,” Jen told me over the phone. She received a letter through the door, explaining that the property had changed hands, and that she would now be Vestry’s tenant. “No one asked me”, she said, “if they want to sell the apartment, I should be the first person they asked.” Vestry’s control over the property immediately made Jen and Danny’s situation insecure. Under the previous owner, Jen had signed a lease until January 2026. Vestry were under no legal obligation, however, to honour this agreement. “The law is on their side,” Jen said.

    Jen’s case is among the fifteen disputes between Vestry and their tenants that have come before the Residential Tenancy Board over the last six months. Her story is quite typical of many of those before the RTB – the landlord wants to sell, and the tenant, caught in the tempest of the housing crisis, cannot leave. Jen told me that Dublin City Council offered to buy the property under the tenant-in-situ scheme. Vestry, however, declined the offer which would have secured a “market rate” purchase for Vestry and a home for Jen and Danny. A win-win scenario, one would have thought. “My main issue is that there is no transparency between government bodies, landlords, and tenants. I don’t understand why it [the DCC offer] was so secret.” A representative from Be Lettings told Jen that they were looking for between €350,000 and €375,000 for the apartment. When Jen asked the DCC worker charged with acquisitions under the tenant-in-situ scheme what offer was made to Vestry, she was looked at “like (she) had two heads.”

    When I went to visit Jen and Danny, accompanied by members of the Mountjoy-Dorset branch of the Community Action Tenants Union (CATU), Danny’s energy and curiosity was infectious. Jen and the CATU members decided to knock on every door in the apartment building, with Danny’s exuberant voice echoing through the stairwells as his mother pleaded her case to her neighbours. He showed us his favourite book, Torben Kuhlmann’s Lindbergh – The Tale of the Flying Mouse. The book tells the story of what Danny described as a “genius mouse”, who is forced to flee Germany after the humans create a labyrinth of mouse traps, leaving himself and his friends on the run. The similarity between Danny and the little mouse was, frankly, striking. Surplus to Vestry’s requirements, little Danny and his mother must now make their way in a city filled with the sorrow and stress of displacement.

    One of the CATU members pointed to a leaflet poking out from under the door of one of Jen’s downstairs neighbours. He had left it there a couple of weeks previously. “Well, there’s no one in that house”, the member remarked. How could it be that this woman could be facing homelessness, while a perfectly suitable house seemingly lay vacant, right under where they slept? Such is the effect of a political economy whereby a basic human right, housing, is treated as a speculative asset for men like Moyles to gamble with.

    CATU are currently representing a number of Vestry tenants who are facing eviction by the investment trust. “⁠It’s typical that our members are being put at risk of homelessness due to no fault of their own. It’s also typical that private landlords are prioritising their shareholder profits at the expense of housing insecurity for our members and other tenants,” Lily Palmer, communications officer for CATU Mountjoy-Dorset told me. In response to the evictions, and fearing that Vestry may be carrying out mass, citywide evictions, CATU Mountjoy-Dorset have purchased a dedicated phone for Vestry tenants to contact them, should they want representation from the Tenant’s Union, called the “Vestry Hotline”.

    In 2023, The Ditch reported that Vestry controlled more than 850 homes in the Irish rental market, posting more than €20 million in profit. Company records show that Moyles is the company’s largest single shareholder, through an investment firm wholly owned by him, called Apsone Investments Ltd. Mr Moyles keeps good company with his fellow shareholders, a who’s who of property moguls. Let’s take Silk Shadow Ltd, who control 10% of Vestry. Silk Shadow is owned by property power couple Hilary and Christy Dowling . In 2011, Newlyn Homes Limited, which controls 100% of Silk Shadow had €22 million of its loans transferred to the National Management Asset Agency (NAMA). Christy is also a co-director of Vestry and Beo Ventures Ltd, along with Robert Kehoe and Andrew Gunne. Andrew Gunne, incidentally, was previously a director of Focus Ireland, a charity apparently tasked with alleviating the humanitarian crisis of homelessness. The Vestry group reveals a complex web of companies, all with their fingers in the Irish home market, or indeed, the Irish homeless market.

    Moyles, along with Vestry co-director, Robert Kehoe, are directors of Be Lettings. Be Lettings describe themselves as “a leading residential letting and management business with a nationwide portfolio of houses and apartments”. In at least one case Be Lettings has sold properties to Vestry itself. One effect of such ‘house flipping’ is rampant inflation in the housing market. For example, a 3-bed, 2-bathroom, semi-detached house in Dublin 15 was bought in November 2019 for €287,500.00. In January of 2025, the same property was sold to Moyles’ Vestry by Moyles’ Be Lettings for €400,050.00. Land registry documents show Vestry is this property’s current owner. It was surely no coincidence that Be Lettings facilitated the sale, allowing Moyles to benefit through his shareholdings both from the sale of the property, and from its future tenancies. According to Vestry’s accounts this home, and Jen’s, are listed as a security for a company called Situs Asset Management Limited. This means that should Vestry fall into financial trouble, the home can be seized by Sistus, with little recourse or security from homelessness for whatever tenant may be renting the property.

    Moyles currently has a case before An Bord Pleanála, which was lodged in October of 2024. The case concerns an application for a fire safety certificate for a property he leases at 21 Denmark Street, Dublin 1. The case file reads “for material change of use from flats/bedsits to B&B rooms with other material alterations”. This is precisely what Dublin does not need: more B&Bs at the expense of permanent residences.

    When I visited the property it was clear that work was ongoing in the building. Stacks of rubbish were piled high next to it, and the door was bolted shut with two heavy padlocks. This property – a listed building built in c.1790 – is not owned by Vestry, Moyles, or other associated entities. The building’s Land Registry file shows that it is currently held under a leasehold from a company by the name of Dubres Strategies Limited. This company is not registered in Ireland, but Malta, according to leaked documents found in the Paradise Papers. The Paradise Papers is a global investigation into the offshore activities of some of the world’s most powerful people and companies, led by The International Consortium of Investigative Journalists. A man named Rodney Lee Berger is Dubres Strategies Limited’s director. He and Corinne Hilary Berger are directors of Dubres Capital Limited, a company incorporated in the Republic of Ireland, with an address at 13 North Great George’s Street, a stone’s throw from the property at 21 Denmark Street.

    Vestry’s purchase of Jen’s apartment was not the first time Moyles had cause to deal with Grant Thornton, in their capacity as receivers. In 2011, when Moyles was a director of Shelbourne Development (Europe) Limited, The Bank of Scotland appointed Grant Thornton as receiver. According to the receiver’s abstract submitted to the Companies Registry Office, dated 18/12/2019, Grant Thornton collated receipts of €33,511,913. In 2014, National Asset Loan Management Limited appointed Mazars as receivers to Moyles’ Shelbourne Properties Limited. Remarkably, this is a different entity to Shelbourne Development (Europe) Limited. According to the receiver’s abstract presented by Mazars, they took control of €23,975,661.56 of assets associated with the former company. It’s strange how the same man can be a supporting character in the downfall of one property giant, dust himself off, and appear on the other side of the ledger, purchasing a stressed asset from the very same receiver who had previously confiscated his holdings. As Mac from the 2005 comedy TV series ‘It’s always Sunny in Philadelphia’ put it: “I’m playing both sides, so I always come out on top!”

    Artist’s impression of the ‘Chicago Spire’.

    Moyles shared his directorship in both companies with Garrett Kelleher, who tried to sue NAMA for $1.2billion in a U.S. court, after his Anglo-Irish Bank-funded “Chicago Spire” vanity project failed to get off the ground. In 2009, prior the  resignation of Chris O’Connell as the head of Shelbourne Development (Europe) Ltd, O’Connell told the Irish Times: “In the short term it’s (referring to the establishment of NAMA) going to mean uncertainty for developers, bankers and investors alike, but it’s the key to the resurrection of this market over the next decade and it’s going to generate significant business opportunities at a number of different levels,”. And indeed, the offloading of bad loans from the bankers’ books by NAMA has created significant business opportunities. It could certainly be argued that this mechanism has allowed Moyles, Kelleher, Dowling and the crew to continue their honest work as lowly property moguls.

    “He doesn’t want to leave”, Jen told me, “he has his swimming lessons here, he has his little pals, his little life is going to be disrupted”. We must confront Jen and Danny’s reality, and the reality for some 15,286 people currently in homeless accommodation in this “Republic”, 4,653 of whom are children, with countless more contending with crippling rents, inflated high prices and insecure tenancies. If this is a “good problem to have”, who is it good for? Certainly not those people, and certainly not those paying exorbitant rent for mouldy studios. Is the problem housing supply, that “Ireland is Full”, or something else entirely? When we start asking the right questions we may start putting the pieces of the puzzle together. Once we establish, as a basic cultural norm, that little Danny’s right to a roof should take precedence over Moyles’ right to make money from that roof, then, we might start excavating what is rotten about Irish housing. Until then, the carousel of real estate investment will keep turning, and little Danny and his mother will remain on the sidelines, not knowing what comes next.

  • Housing: A Banker Speaks Out

    It is often said the current Irish housing crisis is mainly the result of a lack of supply of new houses; a supply that slowed down and never really fully recovered following the burst of the property bubble in 2008.

    Developers lament a lack of initiative in governments past and present; housing plans replace one another, at least in their facades. The latest example is the Fianna Fail Housing Minister Darragh O’Brien’s Housing for All replacing, or rather refining Rebuilding Ireland introduced under Fine Gael’s Eoghan Murphy – all while multiple cranes never really stopped crowning Dublin’s skyline.

    The spin is that this lack of supply, in turn, generates scarcity, which translates into higher prices.

    Thus far, the solution we have been served is to create a tax-friendly environment: a de-facto tax haven, to attract reliable (and well-resourced) institutional landlords and investment funds – commonly referred to as Vulture or Cuckoo Funds – to accelerate badly needed developments, besides keeping the Irish banking system afloat.

    Apparently, such entities are best placed to pursue ambitious housing schemes, and the management and maintenance of as much of the national housing stock as possible. And supposedly, as in the Housing for All plan, it is the market that is best equipped to understand and deliver the population’s needs, down to every neighbourhood and community.

    Unfortunately, however, the nature of this demand, might not be guided by the community’s needs, but the obligation of a certain profit margin for a financial instrument; held in a pension fund – perhaps owned by a kindly grandmother somewhere else in the world – while enriching the asset managers of these private equity juggernauts.

    What actually gets built, and at what price, is increasingly under the control of entities that hardly take into account the repercussions for society at large. In some cases they simply up sticks to gnaw on bones elsewhere. The Cuckoos have been here for a long time, locking in the spread between ever increasing rents and the financial costs.

    The influence of the banking and financial sector over the delivery of housing has become ever more evident. Thus, the quagmire of basic supply and demand arguments have little or no bearing on how a complex infrastructure such as housing is managed.

    It is within the banking sector, and regulations set by the ECB and Irish Central Bank that a substantial proportion of the residential properties of this country are held, packaged and repackaged, and sold in bundles to foreign investment funds in a process called securitization.

    For most people, despite the shocking revelations arising out the 2008-09 Crash, the inner workings of those dynamic sytems remain out of reach. We therefore find it necessary to look for guideance from someone who really understands the relationship between the current housing crisis, and the financial markets underpinning this.

    Ben Hoey has worked in commercial and investment banking for the past thirty years. After leaving Ireland in the 1980s, he went on to become CFO of Merrill Lynch International:, CFO of Bank of Ireland Capital markets in the wake of the 2008-09 crisis, and managing director of Kennedy Wilson Europe until 2015. Then, as he likes to put it, he failed to retire.

    He is now in the process of setting up his own Fintech business, aimed at creating a Rent to Buy structure.

    It was while analysing a distressed home loans portfolio on behalf of the Not-for-Profit organisation called Right2Homes, that he awoke to the full scale of banking misconduct, and mis-selling of the mortgages in the first place.

    Hoey contends that up to one-hundred-and=fifty-thousand mortgages may have been affected, including some currently in the Courts for repossession hearings, and others that have already been repossessed by banks and Vulture Funds.

    He is now taking approximately one hundred test cases of misconduct and mis-selling of mortgages before the Financial Services Ombudsman: and that seems to represent just the tip of the iceberg.

    Today, Irish interest rates remain, intentionally, the highest in the EU in order to increase bank profitability. This allows the Vulture Funds to purchase swathes of property and maximise their returns. Nowhere else in Europe offers such attractive rates, and hence Ireland is plagued by the funds, who see us as easy picking. Distressed mortgage holders are simply the low hanging fruit.

    How can we explain why an entire generation is paying the highest mortgage rates in the Eurozone, or being forced to rent at at more than double the rate compared to ten years ago? Extreme commodification of residential assets lies at the heart of this.

    Image: ©Daniele Idini

    Ben Hoey: It’s all about cash flow. Property, as an investment, is valued based on its ability to generate cash. Cash is king, and that’s why these Vultures, even the Cuckoo Funds, can access so much low cost leverage. No one has a hope against them. That’s what’s wrong with the world. Capital markets are so cheap now that they can buy anything. And if you think that the current government policies and Central Bank policies is putting free cash into the system, you need to recognise that free cash doesn’t go to you or I. Free cash flows to the banks to make sure they are solvent and healthy. And it’s the banks that make the fortune out of the free cash from quantitative easing.

    Cassandra Voices: What would be the average rate that Vulture Funds will buy loans for? Is there an average or is it dependent on the amount of NPLs versus performing loans if it’s a mixed package, for instance?

    Ben Hoey: No, it will never be mixed. Even when Nationwide Building Society was sold off, it was broken into different portfolios of loans depending on the ability of the debtor to pay. For simplicity, there was the complete deadwood, ‘haven’t heard from them in years‘; to the guy struggling; missing every couple of months; to the performing ones [the loans that were regularly being paid off]. So even within the Non Performing world, they split them into different categories and then they’re priced accordingly per portfolio.

    In 2018/19, the average pricing for Irish bank’s non-performing residential home loans was circa 65 cents on the dollar. And that’s per portfolio. Nothing is ever priced per loan because it’s all priced on the cashflow of the portfolio. Cash flow primarily generates what price they’re prepared to pay for the portfolio in total. Then, once they work out that, they apportion the price back across the portfolio for tax and regulatory reasons. Other factors such as equity in the home, negative equity, etc. do play a role, but they don’t care much about the price per loan, as each loan position will be managed individually and the portfolio will be managed and funded in its entirety; the objective being to maximise the cash flow on every loan.

    Image: ©Daniele Idini

    Cassandra Voices: The narrative supporting the presence of Vultures Fund in Ireland is that their investment is a necessary precondition for a stable banking market, and consequently construction industry. Why are we still seeing massive sell-offs of loan portfolios to Vulture Funds? Are the banks still in a sort of intensive care unit and in need of continuous injections of capital, as in the wake of the Crisis?

    Ben Hoey: I don’t think so. The banks are generally a cash cow. But what happened in 2009 is that there was a liquidity crisis as international investors and depositors withdrew their cash from the Irish banking system. NAMA was formed to solve that liquidity crisis in the banks. Most of the developer loans, which were completely dead in the water (with no cash flow), which were extensive relative to the rest of the banking market, were transferred to NAMA and again cheap, very cheap bonds were issued to support the purchase. All of those bonds were issued to the banks that transferred their loans. They effectively swapped their bad developer loans for low cost NAMA bonds which greatly improved their liquidity and capital position, as they could use those bonds to generate cash or liquidity in the market. NAMA was vital to addressing the liquidity issue in Irish Banking at the time.

    The interesting thing is that actually they didn’t start getting the residential loans off their books until about 2016, 2017 and 2018. So, there was clearly no rush as the liquidity crisis passed. The main reason that the banks in Ireland started to sell the residential loans was that the European Central Bank said: “guys, we are worried about the next crisis and you’re still living in the current crisis. So get your residential non-performing loans down below a certain percentage of your balance sheet.”

    It was typically seven percent on residential NPLs dropping to around five percent. So the Irish banks, faced with severe imposed capital costs, were strongly encouraged to sell their portfolios to hit these ratios. The European Central Bank brought in horrendous capital hits like a 100% reduction of your capital if you didn’t get below that level. So, for example, if you had a €100 million loan portfolio and you had provided say €60 million against it, your exposure to future losses was only 40, the ECB was saying: “if you don’t get below that ratio, then an ever increasing amount will be deducted from your capital, greatly limiting your ability to undertake new business.”

    We need a strong banking system which is ready for the next crisis. So after NAMA, there does not appear to have been a liquidity crisis for the Irish banks and, by their very nature, liquidity crises need to be solved immediately, as they are not like property and health service crises, which seemingly can go on for decades.

    In 2008-2009 the Irish government stepped in and did the craziest thing ever, which was to guarantee €400 billion of customer deposits, because all the international deposits were leaving the Irish banking system literally by the second. And they actually started to realize that, oh, my God, we have a bank account too that needs to be funded – and, they know, it’s going to run out of cash soon. And that was the problem. Nothing to do with lack of profitability. It was lack of cash or liquidity as it is better known in the industry.

    Cassandra Voices: So it was the withdrawal by investors, essentially a withdrawal of money by other banks or investors?

    Ben Hoey: By all the deposit base. Ok, not so much the Irish people, because they had access to the deposit guarantee scheme already. There was some stories of customers moving their cash to Switzerland and they all lost their shirts on the exchange rate. But no, in the main, it was the big institutional money that would have always chased the higher yielding banks. So, the Irish banks would have been paying a greater rate because they were less safe, because of country risk, etc. So as soon as those institutions got scared, they just pulled the cash out and the short term money markets closed to the banks. All right. And then that’s when the ECB had to allow Irish banks to start printing bonds. So they printed money. They issued bonds. But it was to save the banking system. Yeah, I think that was the bottom. Remember, you can only have a liquidity crisis over a short, very short, period. The liquidity crisis is a week or two weeks where – I always have to remind people – the truth is hard to establish, as each bank fights for survival and many assumptions have to be made by chief executives. It’s a very, very awkward position to be in.

    Cassandra Voices: Isn’t it the job of bankers to project a level of confidence that might exceed the reality of the picture?

    Ben Hoey:  The chief executive always has to take the optimistic view. Then, you know, you look at the Irish regulator at the time. He looked at that crisis. I don’t know where he got his information from. He came out and said that the Irish banks are well capitalised to weather the storm. So there was a man who wasn’t even a chief executive talking up the banking system in order to give it a chance of survival. I think a month later it was all over. But to have no liquidity is what kills a bank, not lack of profit, as the accounting rules are focused on the long-term profitability of the banking system.

    Image: ©Daniele Idini

    Cassandra Voices: But what happened to Iceland in your view? Did they do the right thing  when they more or less let their banks fail.

    Ben Hoey: They had no choice. There was no EU there to support them. You know what partially got us into the problem was joining the EU: the euro and cheap money coming into an economy that was used to expensive money. People thought, “I can service a million euros worth of tracker mortgage for six bob a week.” And so when we went into the crisis, the ECB helped us out. We are part of the euro. We couldn’t be brought down. But Iceland had no backstop. They were on their own. It was a common belief that the guarantee by the Irish Government of €400 billion of bank liabilities was stupid, but the markets ignored it. Do I think NAMA was a good thing. Yes, I think it saved the liquidity of the Irish banks.

    It’s after that period, after 2010, there was a tremendous opportunity for Irish banks to rebuild and innovate. And they didn’t. They just sank back in and took the cheap money and did the same thing day in and day out. And then they screwed their own customers, beat the shit out of them, treated everyone the same. Talked about moral hazard and how certain members of our community overborrowed and made a mess of it. I hope society never forgives them, but some people move on. So in answer to your previous question, after the liquidity crisis was solved they didn’t need to sell their NPLs, they wanted to sell them. They didn’t need the cash. In fact, the banks were overcapitalised in my view and wanted to repay capital.

    Cassandra Voices: So if the banks, after 2010, were not in need of cash, but they were forced by the ECB to sell most of their distressed loans nonetheless, why didn’t they consider more ethical solutions that would have protected family homes for example? Instead of selling to the American, Canadian or other international funds?

    Ben Hoey: Two reasons. Execution risk and moral hazard. The moral hazard in this case is: banks say we can’t give a discount to someone even though they might deserve it, or we may have lent them too much cash. We can’t restructure the loan fairly and write off some debt as their neighbours will want a debt write off too. You can argue all day as to whether that’s right or wrong, but that’s the moral hazard argument. So they have to sell to someone who would be seen to be not so fair. And there’s a lot of hassle and maybe a bit of shame. Moral hazard helps to embed that shame in people. So that’s the moral hazard,.

    Then there’s execution risk. If you consider, at the end of the day, you have a bank official charged with selling several billion euros worth of loans. So you have a small number of ambitious well paid people who want to continue to be successful. So do they sell to Brian Reilly and his not-for-profit initiative, who’s never done anything like this before, who appears to have the funding, but it’s never been executed? Or do I just give it to Cerberus, who will walk in the door with the cheque immediately?

    You know, the head of Lone Star, the richest Irishman in the world, John Grayken, visited some of the Irish banks selling assets, which is akin to Warren Buffett popping in for a chat; that’s powerful messaging to Irish bank officials who need a guaranteed sale. They are big talkers; you tell me the cheque you want and I’ll write it now. That’s execution risk. There’s no executive risks with the likes of Lone Star or Cerberus.

    Cassandra Voices: What do they ultimately want out of all of this if, at the end of the day, they’re buying something that’s not performing? The cash flow really isn’t there. Do they want the properties? What do they want out of this?

    Ben Hoey: The normal model was they would price the portfolio on the current cash flows and then, after the purchase, they would improve those cashflows or liquidate some loans, i.e. repossess. And, in certain cases, they do deals for guys to walk away. So, say the property was worth €100,000 for simplicity sake, and they gave the guy twenty grand to walk away. God knows what they bought the loan for, but they ask themselves: “is this the maximum cash we can get here?” So €100,000 sale price, minus the 20k that they gave them to walk away. That’s generated €80k today, and the today is very important. That would have fed into the model. So it’s all about maximizing the cash flow.

    When they couldn’t maximize the cash flow because the Irish courts didn’t cooperate, they minimized the cash outgoing. So, originally when you buy a non-performing loan book that actually has a bit of cash flow, you don’t use all your own money to buy it. You go to a London bank and they give you what’s called a loan on loan. So they lend you money, and probably at one and a half percent, up to 60 percent loan to value, secured on the loans you bought. So that’s really cheap. But your own equity needs are say, nine percent unlevered.

    After a while you think this is not going anywhere. I’ll just put the whole lot into securitization vehicle and then issue triple-A notes up to a high percentage, paying out 80 basis points. So, they drive down their funding costs, which again enhances the cash flow. Net cash flow.

    Yeah. It’s all about cash. Show me the cash. The trouble is that they couldn’t do deals with Irish people because there was so few who had any cash and had no access to cash. And the Courts wouldn’t allow them to repossess.

    Cassandra Voices: And what has all of this to do with the Housing Crisis? How does this affect supply and demand on the Irish housing market?

    Ben Hoey: You said “there’s no supply.” So how do you know that? Supply of what to who? No one has defined how many affordable and social houses our society can afford. We don’t actually know what supply we’re trying to meet. And, you know, like all journeys, if you start in the wrong place, you have no hope of getting to where you want.

    The pension fund, the Vultures, are just one mechanism of delivery. But who are we trying to supply to? The family paying a bit of tax, probably earning up to €80,000? They should be able to buy a home or rent it affordably. We’re not trying to supply housing to a German pension fund. They don’t need housing. They need profit.

    Cassandra Voices: But a larger section of society in Ireland actually needs housing. And instead, what you are saying is that we are supplying Vulture and Cuckoo Fund profits, through the delivery of housing for their needs, and not the Irish people?

    Ben Hoey: Can you imagine if Apple said they were going to build a new phone with special features and they were going to sell it to a German pension fund so they could sell it on to our citizens? That’s exactly what we’re doing here. We’re saying we’re building these houses for German and U.S. pension funds because they’re the only ones that can afford them. We put a profiteer in the middle – a middle man. And that’s what happens when you commodify an infrastructure, a key infrastructure like housing.

    Image: ©Daniele Idini

    Cassandra Voices: Is this by design where we are now in terms of housing?

    Ben Hoey: This is inevitable when you make something a tradable commodity. You’ve turned homes into an investment class. There’s no rules anymore. The cheapest money will get the deal. And that’s the fundamental issue.

    What would happen if the Vultures took the airport over and were charging everyone €300 a head to get through? It wouldn’t happen because it’s so obviously wrong. But so is just about everything obviously wrong with the family home market. And you can see the effects. You go to Dublin, North Docks and South Docks; There are thousands of beautiful apartments, worth €600,000 to a million sitting empty because the German and U.S. pension funds want that type of housing, as they were told there’s loads of wealthy young people living in the city. How’s that worked out? Again, their money is so cheap that they can leave those apartments empty, and wait for rents to recover.

    There’s no crisis for them, even though their flats are empty. We’ve actually allowed a particular type of Vulture investor to dictate the supply of family homes to the Irish market.

    Back in the 1990s and early 2000s, we started building stuff all over the country where it wasn’t needed. We’ve learned from our mistakes, but we’re building the wrong sort of property in the right place: and this kills me as a capitalist to say it but… stop treating family homes as a commodity that can be traded. It will make the cost of labour very expensive and the country very unproductive.

    Image: ©Daniele Idini

    Cassandra Voices: Would it be possible to gradually stop treating the residential property market as a tradable commodity?

    Ben Hoey: No, I think you have to go back to basics and look at the complete supply chain: who ultimately is the rightful owner? Is it the individual, the government, or is it a commercial operation? And then you’ve got to put the right structure in place. And the funding naturally comes. Everyone looks out to different models such as the Austrian model etc. And they do work, but you can’t just pick and choose bits of them. You’ve got to look at the whole structure, holistically.

    Cassandra Voices: Ultimately it comes down to a vision of the society that we want to live in. And in order to define this we need a political environment that is willing to build an economic system that takes into account the needs of the population at large, and as you said is willing to define, in the first place, what those needs actually are. In the case of the Irish housing markets, the problem doesn’t seem to to be about access to financial resources, but again, who has access to it.

    Ben Hoey: When I was listening to you there, I was thinking about how we got rid of the British landlords in the past, who took the land with the backing of military power. And we’ve replaced them with, private equity, the Vultures who have employed not military power, but their cheap money. If only you knew the pain they go through before they decide to buy or to build. If you watch that pain, that risk mitigation, you realize how naive we are. The governments says build, build, build. But the clever money agonizes before it decides what to do. The Vultures know exactly what they want. But we don’t. So we end up being picked off.

  • It is Time for a Renewed Deal

    U.S. President (1932-45) Franklin Delano Roosevelt was born into one of the most aristocratic families in America. A distant cousin, Teddy, had even been elected President. In his youth FDR, as he became known, was a bon vivant and ladies’ man, who strayed from Eleanor, his saintly but formidable wife. This blue blood seemed an unlikely person to buck the entire system of U.S. capitalism. He remains a hate-figure for U.S. Conservatives to this day.

    Any account of his life should include the enormous personal tragedy of incapacitation from polio. He could not walk, a disability which may have broadened an empathy for others’ suffering. He was elected President in 1932 on a platform to provide a New Deal to the American people after the Wall Street Crash of 1929 and ensuing Great Depression. The destitution of the American people is movingly depicted in John Steinbeck’s Grapes of Wrath (1939), where a group of ‘Okies’, led by Tom Joad, are ruined by dustbowl conditions, and the calling in of loans by ruthless bankers, and in E.Y. Yip Harpburg’s Broadway Musical Brother Can You Spare Me a Dime (1930). Even brokers were forced to eat from soup kitchens, as erstwhile respectable folk were reduced to ‘hobos.’

    A bull market of speculation collapsed after an unregulated free market had built mountains of sand out of folly and greed. The dominant economic philosophy of laissez faire brought light touch regulation and government passivity, as with our present, similarly hegemonic, neo-liberalism. The view then, as today, was that government had no business interfering in private transactions and that wealth, growth and efficiency are best achieved through the operation of an Invisible Hand. The banking crash from 2007 has had similar deleterious social consequences.

    FDR in 1933.

    FDR adopted the then heretical advice of the economist John Maynard Keynes that to save capitalism it was necessary for the government to intervene in the market. He set up national agencies and support structures for aid and assistance. It was a bailout to protect the poor and disenfranchised, not the rich. His New Deal was in the national interest, not to protect vested interests. The Supreme Court initially blocked the legislation, insisting it had no business varying contracts. In response, an exasperated Roosevelt informed the judges that if they did not approve his legislation he would appoint new ones, which led to a change of heart. This became known among wags as ‘the switch in time that saved nine.’

    The assumption of liberty of contract is that anyone is free to enter into a bargain under whatever terms they choose, but once the deal is struck they are bound by their word. But this is based on the pretence that the market is a level playing field. Many sign on the dotted line without fully understanding the implications, or do so under duress.

    Roosevelt may at times have displayed an ambivalence towards democracy, but he favoured those at the bottom of the social ladder, as he recognised that democracy had been sabotaged by vested interests. Just like today, transnational corporations and law firms were dictating to governments. He revived the U.S. economy through a Keynesian stimulus as government expenditure raised aggregate demand. This brought investment to help ordinary people, not the infliction of wanton cruelty in the form of perma-austerity that runs contrary to even capitalist logic. The best evidence is that a mixed economy, combining private enterprise and public initiative, with social safety nets and support for small enterprise, is a model that works best for society as a whole. Keynes was right then, and still is, but over time his approach went out of fashion.

    John Maynard Keynes in 1933.

    In late 1970’s Britain in particular, the excesses of socialism were becoming obvious, with the three-day-working-week, refuse on the streets, and the stranglehold of government by the Unions. In circumstances where initiative was stifled, Margaret Thatcher and Ronald Reagan championed the old doctrine of unregulated markets, conveniently referred to as neo-liberalism. The ideological underpinning came from the Austrian Friedrich Hayek and the Chicago School under Milton Friedman.

    The curious assumption was that wealth would trickle like manna from heaven down from rich to poor under free market conditions. Instead we got the 1980s yuppies like Donald Trump, accumulating vast fortunes. Over time we have seen a dismantling of the Welfare State; the removal of social protections and safety nets. Today the richest 1% are on target to own two-thirds of all wealth by 2030, with the rest of our existences increasingly precarious. The distinction between working class and middle class is being eroded as we revisit a medieval pyramid of barons and serfs. Yet, ironically, Hayek actually described socialism as the new serfdom. But old-fashioned Marxist class divisions no longer make sense.

    The unprecedented banking collapse after 2007 led to bail-outs being awarded to those who were responsible, and the infliction of austerity on the wretched of the earth. This led Nobel laureate economist Joseph Stieglitz to point to a socialism for the rich and capitalism for the poor. Yet those countries which adopted Keynesian approaches – including nationalisation of banks – such as Iceland, have been vindicated by stabilisation and recovery.

    Ireland achieved the worst of all possible ends. It established a bad bank NAMA, which cut deals with failed property speculators and lawyers and the congeries of the corrupt. As the IMF and Europe imposed austerity on the defenceless masses, those responsible were bailed-out and their debts cancelled. The fraudulent banks had made money on misrepresentations, providing negligent lending advice about the value of stocks, investments and credit ratings. This caused the economy to overheat and generated a property bubble that many had pointed to. Now institutions continue to foreclose against the poor and defenceless, as sanctity of contract is insisted on. The perversion of the system it that the richer you are, the more easily you can cut a deal; the logic of a bank too big to fail.

    The neo-liberal recasting of homo sapiens into homo economicus, also initiates a new form of Social Darwinism, permitting the survival of the most ruthless in a dog eat god universe. We have seen a slippage in standards, where the young are habituated to lying, having witnessed the deceit of those in high office. Lines between fact, semi-fact, lies and deceptions have been blurred. Even in the courts of law fabricated cases have reached pandemic proportions. This has also led to increasingly vicious tactics against those who demure: like a plague, the corruption of banks has spread to other private agencies and even state institutions; where whistleblowers are systematically undermined. In a distorted world, the mugshots of heroes of our time now feature in rogues’ galleries of subversion. The indicted include human rights lawyers, public-interest journalists, and anyone in public life with a shred of a social conscience.

    It is an increasingly divisive ‘them’ and ‘us’ social setting, where the poor, the migrant, the displaced, the activist, and the public intellectual, are marginalised and destroyed in increments. Targeted assassination by the state is now evident across Europe, and not just under Mr Putin. Our corporate suzerains lead political discourse towards safe issues around individual entitlements. Suddenly the political class are all in favour of gay marriage, gender equality and decriminalising someone for puffing on a joint. But what about more fundamental rights intrinsic to sustaining human life, such as health care, housing and social support?

    Around the world courts are evicting and rendering homeless surplus populations, and in India dumping them on the streets. Housing, either buying or renting, is increasingly unaffordable, diminishing the prospect of human flourishing. Now crucially also, the privatisation of health care has led to life or death becoming a matter of affordability not a right or entitlement. There are other sinister ramifications. Those teachers, academics or professionals in badly paid but socially worthwhile occupations must toe the line, or are fired for exposing corruption. Survivors sing for their supper, while in journalism the phrase he who pays the piper calls the tune is increasingly apt.

    The wise sensei or village elder is no longer looked up to, but instead the old are being asked to quietly await their death. Intelligence and achievement have to be costed and channelled into wealth producing activities. You are not seen as a man if you do not have the mentality of the hunter.  Short-termism both in contracts and outlooks has brought reactive decision-making, wherein people are desensitised to the suffering of others. These depredations being heaped on society are deliberate. The Shock Doctrine pioneered in Chile and Indonesia by neo-liberals in the 1970s have been visited on Ireland and Greece, and elsewhere. It brings cuts in funding to socially useful public agencies, such as libraries, which are being gradually eliminated. There have also been huge cuts to legal aid, imperilling the ability of the innocent to defend themselves against criminal charges.

    It is clear that we require a Renewed Deal, bringing Keynesian stabilisation measures, including support for small businesses, social safety nets and the shutting down of corporate tax avoidance. The E.U. must desist from imposing austerity under the guise of the Growth and Stability Pact, and reinforce regulatory protection of labour rights and the environment, resisting the lobbying of giant corporations. Courts in Ireland should also recognise a basic human right to housing, including prohibition against arbitrary eviction, as well as healthcare. So let us organise a petition then for an umbrella organisation to bring a Renewed Deal to the world.

    Codicil

    I write this as the Coronavirus pandemic sweeps through the world, with governmental intervention and support in the Keynesian sense right back on the table, particularly in the U.K. But there is appearance and there is reality; smoke and mirrors.

    My concern is with the Malthusian ideas emanating from an ongoing devotion to the tenets of neo-liberalism, and also that social distancing and other precautionary measures will accentuate pre-existing social atomization, and amplify a lack of care and concern for one another.

    Emergency measures could also empower authoritarian elements within States, undermining cherished civil liberties.

    My fear is that any Renewed Deal and stimulus to avoid economic meltdown under the politicians currently in power in the U.K. and Ireland will be selectively targeted, with many if not most of an over populated planet permitted to wither away by increments. We cannot have another Bailout to preserve the assets of those at the top of a latter-day feudal pyramid.