Closing Bell: Who actually cares about fixing Dublin's housing crisis?

From Sandyford to Syria, Vincent Wall gives his take on the week's business stories...

Closing Bell: Who actually cares about fixing Dublin's housing crisis?

Rolling News

I’ve just returned from a visit to a friend in the Beacon Hospital, Sandyford. With all due respects to those who work and live in that still developing suburb of South Dublin, it’s not the prettiest part of the city.

That’s not to say that there aren’t nice views of the nearby Dublin foothills, nor from the upper storeys of some buildings, of the sea to the east, but generally speaking the architectural mix is one of multi-storey commercial and residential blocks, bland, squatter office blocks and a scatter of light industrial units, car dealerships and warehouses.

But Sandyford does offer lots of local employment and is connected quickly to the city centre by the Luas light rail service.

I’m not a professional planner, but in many ways it offers the ideal canvas within the Greater Dublin Area to build well-designed, high-density accommodation units, the kind the city needs to house the thousands of, mainly younger people, who are searching for their own space to rent or buy.

But in its wisdom, the planners of Dun Laoghaire Rathdown County Council, have rejected plans by IRES REIT, the country’s largest single landlord, to build three 14-storey blocs incorporating more than 450 apartments, on the basis that the height, scale and bulk of the buildings represent “excessive development.”

In doing so, they are not only sending a signal that many local authorities are not overly concerned by Dublin’s chronic shortage of residential space, but those same councils are content to leave the problem with Central Government or with other local authorities probably located miles from the city – the only locations where many can afford to live.

We need to cop on.. Having nearly destroyed the city’s Georgian and Victorian heritage during the three-decade period to the 1980s, many of our planners have now become overly conservative and restrictive when it comes to high-rise buildings and high-density urban development.

In this context, the new office blocks that line both sides of the LIffey from Butt Bridge to the sea, could be up to four storeys higher, given their distance from the Georgian core and the width of the river along this stretch.

In this context also, Dublin City Council is currently planning for the building of just three thousand residential units on the Poolbeg Peninsula, a unique brownfield site, close to the city centre, that could with high-quality design and appropriate public transport links, house more than double this population – as Dublin Chamber of Commerce has pointed out with increasing levels of frustration.

The consequence being, high and rising house prices across the city, punitive rents and increasingly long and environmentally-damaging commutes for thousands of people.

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The preliminary census data, published during the week, suggests that while population growth across the country slipped to its slowest rate of growth in twenty years, the population of our cities, and particularly Dublin, continues to grow at pace.

And it’s worth remembering that the most recent census measured a period when many citizens continued to leave the country and few of those who had left when the recession first hit had thought of returning.

That migration trend has now reversed; net immigration has commenced again, and if the economy continues to grow in the mid-term at more than 3% per annum, then expect more demographic pressure on housing stock across our cities. And, as the population inevitably ages, expect pressure also on services for that cohort of the population.

Interesting so, to see the specialist French infrastructure fund, Infra Vie Capital Partners, paying up to €70m for Care Choice and the 500 nursing care beds it currently offers in Dublin, Cork and Waterford.

The Fund has obviously read the tea leaves in terms of the twin dynamics of increased longevity and smaller family sizes, meaning people are living longer but with fewer children to look after them. That’s a gap in the market, the private sector may be more happy to fill than the housing market in the short term..

It’s also a lucrative market for those who spot the opportunity in time. The price paid by the French is more than double the price paid for Care Choice by its vendors, Emerald Capital Partners, just three years ago.

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Turning to those who already have homes and mortgages, Central Bank Governor, Philip Lane confirmed to the Oireachtas Finance Committee during the week, that those tracker mortgage holders whose alleged grievances with their lender banks, were rejected by the Financial Ombudsman, can still hope for a different outcome as part of the ongoing Central Bank Review into the tracker mortgage mispricing controversy.

Pointing out that the Ombudsman’s remit would likely have been restricted to the contractual elements of the mortgage agreement, the Governor said the Central Bank’s Review is also covering regulatory aspects, and significantly, more subjective areas such as the content of advertising; the nature and tone of any communications or meetings between lender and borrower; and the degree of influence that may have been exerted on a mortgage holder by their financial institution.

We can reasonably expect the numbers of tracker mortgage holders who will require redress and compensation from the banks, arising from the Review, to move north of 10,000 prior to the planned closure of the review in September.

Meanwhile, the Governor’s colleague, Central Bank Chief Economist, Gabriel Fagan, believes the Irish economy is displaying the features of a phenomenon known to his profession, as a “Phoenix Miracle”. This is where strong economic growth is driven by rising income levels and business investment without increasing debt levels...

As the mythical phoenix bird rose from a bed of ashes, the concept seems particularly apt, though those declining numbers of Catholics amongst us, might bear in mind the grim Lenten warning: “Remember Man that thou art dust and into dust thou shalt return.”

Speaking of mysteries, and to cheer ourselves up, let’s hope the Department of Finance soon clears up the puzzle of the missing €60m in Universal Social Charge taxes it had planned to collect in the first quarter of the year, and which never materialised.

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As we write, European markets seem to be taking Donald Trump’s missile strike on a Syrian air force base, in their stride.

The note from the White House, that the strike was a once-off seems to have stemmed the initial wobbles on Asian markets overnight and investors, as is their wont, will now look to the next thing – the latest monthly US employment figures.

But the world can only have become more volatile with the launch of those rockets, and while the Trump Administration can satisfy itself in the short term that it’s not to be played with and follows through on its word, there’s a world of a difference between launching an attack on an exhausted and discredited regime such as Syria’s , and the gentlemen in charge of the asylum and the nuclear codes in North Korea: a world of a difference and the small matter of China.

Perhaps we should brace ourselves...