Impact of vulture funds on local housing provision laid bare in the Council chamber

PAUL MURPHY

Vulture funds have been allowed to run riot in this country since the financial crash, buying up properties leading to spiralling rents and deepening the housing crisis, an Aontú councillor told a meeting of Meath County Council this week.

Cllr Emer Tóibín was speaking to a motion calling on the Council to phase out the lease back of housing from pension and private equity funds and to seek out the necessary funding to buy or build new housing directly.

Housing, and the shortage of it, was "one of the greatest causes of hardship affecting so many people across county Meath and across the country", she said.

People’s homes were “their anchor” and went to the very heart of their ability to function every day, to work, to live, to raise families, to contribute to society and to be happy.

Housing queries comprised a very heavy proportion of councillors’ workload in their constituencies and it was extremely difficult to give assurance to people across the desk from them that they can get a roof over their heads in the near future.

She said that Meath had the lowest number of local authority houses in the State and it had 4,000 people on the housing list. Waterford and Louth had twice the number of local authority houses than Meath per head of population.

“Every councillor here knows that Meath does not get its fair share of investment in so many areas of service provision. Meath County Council has one of the lowest rates of investment in the State so how are we going to play catch-up and get our fair share for those in need?”

Private equity and pension funds have been very busy in this country and county since the financial crash. The Government had “justifiably” come in for criticism over the ease with which vulture funds had been allowed to operate.

They had contributed to spiralling rents and rising house prices. “One activist has spoken out about the ease with which the red carpet had been rolled out for these funds. This was evidenced by the number of meetings held between these funds and the Department of Finance between 2013 and 2014 – 65 meetings in total”.

Cllr Tóibín said that vulture funds had little interest in renters or buyer or in addressing Ireland’s acute homelessness crisis – some of them were now the biggest landlords in the country.

She said that last year Meath County Council had spent “an inordinate amount” on lease back than in 2020.

There had also been a 100% rise in the cost of lease back over a three-year period. It would have been easier for the Council to build directly or purchase houses than persisting with a system in which the Council did not know whether the houses would remain with the vulture fund or go to the local authority. She welcomed the fact that lease back was being cut back in Meath.

Labour Cllr Elaine McGinty, supporting Cllr Tóibín, said that she had investigated one of these vulture funds in her own area and what she had found was that it was a collective active management vehicle whose principal activity was to acquire and hold investments in commercial property with a view to maximising return for shareholders.

She understood where all this had come from – our banking system was broken, there was no money in the country so the Government went out to the market looking for money.

“Where it started out from and where it is at now are two very different things. Who is behind these funds? I know some of the names out there but I don’t know them all.

“Where is this money coming from? There is no asset at the end for the local authority. There is no tax implication. The Minister was supposed to bring in tax but it was amended at the last minute”.

“Why were these funds not paying the same tax as ordinary citizens,” she asked.

Social Democrat Cllr Ronan Moore said that the use of private equity or vulture funds had to be one of the worst elements of the Government’s approach to housing over the last number of years. At the end of any lease there was no guarantee that the house itself would end up in the ownership of the local authority.

Independent Cllr Gillian Toole said she supported Cllr Tóibín’s motion but the hard reality was that the banks had exited the housing market due to lack of profitability.

Some “crashed and burned” and weren’t salvageable between 2009 and 2013. The position that Meath and other councils found themselves in was a direct knock-on effect of the recklessness before 2008. If we weren’t careful some of the current policies and proposals could land us back there again with unaccountable and untraceable operations such as those vulture funds.

“We are supposed to learn from history but I ask the question, have we and will we ever?”

Council official Barry Lynch said that leasing was one of the mechanisms the Department had put in place to provide social housing, a mixture of capital and revenue account funding. It was put through in a way that would not add to the national debt.

There had now been a complete change in that policy and leasing was being phased out. The Council was out there endeavouring to “increase the pipeline” by any means available to it and they had “turn key” proposals out at the minute to look to make up the shortfall in funding in other areas.

The Council agreed Cllr Tóibín’s motion.