Introduction

For the vast majority a house is essential for human wellbeing. Most people see houses as a roof over their heads not an “asset” or a “commodity”. This is not the case for the global financiers, however. At the height of the last economic boom the buying and selling of homes reached dizzying proportions. In Ireland unprecedented numbers became home owners. This was mirrored across the globe, with people encouraged to take out one and even two mortgages.

Across the world, bankers went into overdrive, lending money and then selling loans on to other banks all over the world, creating the sub-prime mortgage crisis and the ensuing global meltdown.

Despite the hardship that was caused, no lessons have been learnt. In fact the very financiers that created the crisis went on to benefit from it. In Ireland, the collapse of the property market signalled massive pain for ordinary people, but real opportunities for Vulture Funds. As early as 2009, the US fund, Cerberus, was hiring key advisors in the property market and by 2013, ex NAMA officials were setting up investment vehicles like Hibernia REIT to make a killing. Roughly €200 billion of Irish property was sold to these investors for knock down prices. This left a major shortage for the rest of us and undermined any recovery for ordinary people. Currently, there are nearly 10,000 homeless people in the state, 3,000 of whom are children. Added to this are more than 100,000 people waiting on social housing and countless numbers paying over the odds for rent and mortgages.

Whether Fianna Fail, Fine Gael or Labour are in government, their policy has consistently been to open up opportunities for private investors. The current crisis has arisen from a confluence of four aspects of this policy.

  1. Reduced Social Housing. Since the 1990s, the policy of successive neoliberal governments has been to reduce the numbers of council houses being built in order to fuel a boom in private property. The first act of the current Fine Gael/Labour government was to abolish Social Housing as we have known it and to bring in ‘Social Housing Support’ which classified RAS, Rent Allowance and Leasing as equivalent to a council house. This effectively meant relying on the profit-driven private sector to deliver a vital social need.
  2. Poorly Planned Supply. The decision of successive governments to withdraw from planning the building of public housing meant that by the 1990s Celtic Tiger ‘boom’ developers were building houses in places nobody wanted to live or couldn’t live because of a lack of jobs or services. This is part of the reason why there are now more than 270,000 empty properties all over the country, alongside a shortage of housing in other areas. The government’s solution to this problem is to re-introduce tax-relief for builders and property speculators. This means the same profit-driven gamblers that helped wreck the Irish economy in the first place, can do it again. During the recession, they have sat on the side-lines waiting until the property market started to improve so they could come back and make another killing.
  3. Mortgage Distress. Over 70,000 households are in mortgage distress, exacerbating the problem in homeless services. Families are losing their homes because they can’t pay the mortgage or because their ‘one-off’ landlord is forced to sell their home to pay off the mortgage to the bank.
  4. Rising Rents. After an initial fall in rents after the 2008 crash, rents have been rising consistently since 2013 with rents in Dublin and other cities rocketing. Rent increases have led to many people being thrown out of their accommodation and placed in homeless services. Landlords have also pulled out of the various leasing schemes.