Thursday, December 1 2022


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Tenants should have the right to affordable, safe and decent standard housing.

Instead, government policy has turned Generation Rent into an income-generating asset for institutional real estate investors, also known as cuckoo funds.

There are thousands of building units for rent under development which are at lower standards such as smaller units. The average floor space of apartments has fallen by almost a third since 2015. The average size of apartments with planning permission in 2015 was 95 m², but only 75 m² in 2020.

The institutional real estate investment fund rental model built to rent is a very dangerous path.

These investment funds do not deliver housing as a house, but it is an income generating asset for their shareholders.

Their business model is based on maximizing profits by lowering standards, constantly increasing rents, as high as possible, and moving and rotating tenants.

US investment fund Kennedy Wilson, for example, advertises properties in Cork City for € 3,300 for a three-bedroom apartment.

The American fund Greystar announces a property in Dublin North Quays, a one bedroom apartment for 2,400 €.

How are tenants supposed to live, pay the basic costs of living, especially with children and childcare, save for the future, and save for a deposit?

Housing expert Rory Hearne: “To provide housing for Generation Rent and ensure vibrant, prosperous, integrated and diverse communities for the Ireland of the future, the government’s Housing for All plan must deliver a significant supply of genuinely housing. affordable to buy and rent. ”File photo: Niall Carson / PA

Another US real estate investment fund, Hines, is requesting planning for a full development of 1,614 apartments in Drumcondra, Dublin. Of these apartments, 1,043 (70%) will be one-bedroom apartments or studios.

There is no possibility for people to buy any of these units. These developments represent a housing dystopia, devoid of a stable community. They will become the buildings of the 21st century.

Is this the future of Generation Rent? Hines is also developing thousands more in Cherrywood and Dublin 8.

Government policy also makes social housing an attractive asset for these investment funds, which exacerbates the housing supply crisis.

On the one hand, through its switch to the supply of social housing via the Housing Assistance Payment (HAP), payment to private owners to house tenants of social housing, a third of private rentals are now subsidized by the State.

This is not real social housing. These tenants live in precarious housing and many pay “top-ups” above the rent differential paid to the local authority.

But investor funds use the HAP program as an investment strategy – they know that if they develop rental apartments, they will have the state as a potential tenant.

The same goes for social housing rental programs. Investors build to rent it and lease it to local communities. But this costs the state enormously more than the traditional construction of social housing, and makes social housing a profit-generating asset for institutional investors.

The Housing For All plan, if it is to represent real change for tenants, must define how it will end the devouring of Irish housing by institutional investment funds, the plan must clearly move away from current policy which encourages and subsidizes institutional investors through favorable measures in terms of town planning, taxation and social leasing.

Government policy has made Generation Rent an income generating asset for cuckoo funds.
Government policy has made Generation Rent an income generating asset for cuckoo funds.

Investor funds have a war chest of billions of dollars earmarked for Irish housing, and they will continue to buy thousands of homes and build unaffordable and unliveable rental housing unless the government reverses its policy .

Building legislation for rental should be amended to include 50% of units available for purchase, an increase in the standard size of apartments and units. Stamp duty measures should include apartments, and real estate funds should be taxed heavily on their rent and profits.

The fundamental question must be asked: who is the Housing for All plan aimed at? Are they institutional investors and developers or Generation Rent?

We need to challenge the idea that property should be a place to make huge returns on investment. Housing, a fundamental social right, should no longer be treated as a profit-making commodity.

In order to provide housing for Generation Rent and ensure vibrant, prosperous, integrated and diverse communities for the Ireland of the future, the government’s Housing for All plan must provide a significant supply of truly affordable housing to buy and rent, and be clear, institutional property funds will not provide it.

It is thanks to a massive program to build traditional social housing for local communities, and not precarious HAP rentals, that tens of thousands of affordable, secure and state-provided rental housing will become available to low-income people. and medium – which are above the eligibility thresholds for social housing, and truly affordable housing to buy that will solve the crisis.

  • Rory Hearne is Assistant Professor of Social Policy in the Department of Applied Social Studies, Maynooth University

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