Special Report by Owen McCormack
As thousands of more families face homelessness, evictions or emergency accommodation in hotels and B&Bs, the human misery involved is providing opportunities for some to make vast profits. While the Government and Labour’s Minister Alan Kelly have failed to provide social or affordable housing for those affected by the fall out of the Celtic tiger , they have ensured that a clique involved in real estate and corporate finance will profit enormously.
Last year the Government funded the building of just 459 social houses, one of the lowest amounts in the state’s history. As reported recently on RTE radio, this Government is content to see a situation where 40 families crowded into just one Dublin city centre B&B with just one cooker to share amongst them when preparing meals for their families.
The lack of social housing alongside the near impossibility for many of ever owning a house means an new corporate elite will able to exploit tenants on a scale the old landlord class could only dream of . The FG/Lab Government have thrown incentives at builders, speculators and financiers who are now building a massive rental market, attracted by high rents, non-taxable profits, and no prospect of any rent controls or tenant’s rights.
The housing crisis is thus providing rich pickings for a new generation of corporate landlords. Both Irish and International investors are rushing to get into the rental market and are buying up apartments and houses at knock down prices from NAMA and others. The personnel involved come from the same class who profited during the Celtic bubble; real estate agencies, legal and financial experts, builder and speculators. Together with international vulture funds and private equity firms they are forming a new generation of corporate landlords who will have vast numbers of tenants and properties at their disposal and who are set to profit from the continued housing crisis and lack of social housing.
The state agency NAMA is gifting thousands of housing units to various outfits with the sole aim of boosting the profits of a few and ensuring property prices continue rising, regardless of the suffering of people in desperate need of accommodation. Those properties, already effectively paid for by taxpayers could end the crisis overnight if used as part of a massive investment programme in social and affordable housing.
Who are the new corporate landlords?
REITS; Real Estate Investment trusts; although often fronted by the Irish rich and propertied class, also have international backers from various private equity firms or global real estate companies that give them access to vast international funds. I-RES, Green and Hibernia have gathered billions in funds to buy properties cheaply from NAMA and others that can then rent out at high prices in tax free ventures. One of the largest, Hibernia, shows how the same clique that benefited from the Celtic Tiger bubble intend to continue profiting from the misery of its collapse.
Noonan and Hibernia’s Kevin Nowlan ringing them bells of profit
Hibernia REIT: Ireland’s entrepreneurial class at its finest
Founded by Bill Nowlan, as the head of an asset and property management company, Nowlan lobbied FGs Michael Noonan to pass legislation to legalise REITs in order to attract Irish and international funds into Irelands commercial and residential sector. Nowlan saw an opportunity with large amounts of property going at bargain prices and set up HIBERNIA REIT when Noonan and the FG/Lab government passed the legislation in 2013. This new legislation meant corporate landlords could now operate in Ireland and pay no taxes on their profit’s or on the sale of their properties. According to Bill, Ireland needs to be more
like China or Singapore when it comes to planning and development.ie less regulation or laws that impinge on the wealthy’s latest get rich quick schemes; “Many of the new cities in China 10 years ago were pastures. In Ireland, we need a Singapore-type approach to providing new residential and commercial buildings
Nowlan gets his son, Kevin Nowlan in as Hibernia’s CEO, a former agent with real estate firm DNG, who worked at Anglo Irish Bank under Sean Fitzpatrick as a “wealth manager”, then landed a job at NAMA.. Many of NAMAs officials were deeply embedded in Ireland’s property and financial bubble during the Celtic tiger boom. Just as many have now jumped from NAMA into private firms bringing their valuable contacts and insider knowledge of where cheap and profitable properties can be got. Everyone’s a winner, except Irish taxpayers or those who face homelessness or evictions or rapidly rising rents.
Danny Kitchen; Chairman of Hibernia, was former head of INBS who oversaw “Fingers” Fingleton’s retirement package worth 27 million Euro, even as the Building society was bust with 5 billion in debt that Irelands workers had to pay for.
Terence O’Rourke – managing partner in KPMG in 2007 one of the big auditors and accountancy firms that like Ernst and Young or Price Waterhouse Cooper receive huge fees from Governments for studies that always recommend cuts to public services and privatisation as solutions to every problem!! Under Rourke’s tenure, KPMG audited Irish Nationwide even as the crisis was in full swing, but managed to miss the impending bankruptcy and give them a clean bill of health. As well as been on the board of Hibernia, he is also on the board of the Irish Times.
Frank Kenny; Director of Hibernia; Owns US based Willett Companies, with a property portfolio which brings in rents of €51m a year. A recent interview proudly announced that “His kids went to Harvard and Columbia. He collects fine art. His house insurance alone is €30k a year”
And a little help from some International Friends…….
George Soros, billionaire investor with a personal fortune of 20 billion euro, owns 7% of Hibernia. Known as the ”Man who broke the bank of England” , he like other capitalist smelled the profits to be made from Irelands housing misery.
Partners of the Irish rich in making profits from the housing crisis are the global real estate firms such as;
Hines; one of the world’s largest real estate companies’ with assets valued at $25.8 billion. They got a prime sites in Cherrywood and at Spencer dock in Dublin at bargain basement price from NAMA. Cherrywood alone is a 400-acre site with approval for 3,800 apartments and houses, which they can rent out without paying taxes on any profits. They currently have about 1 billion in property assets in Ireland, most snapped up since the recession started.
US giant real estate company Kennedy Wilson have also benefited from NAMA’s largesse and the collapse in property prices when the bubble burst; they bought numerous sites and properties including five apartment blocks in Dublin while NAMA are also helping to fund their development on Sir John Rogerson’s Quay in the Dockland which will house “204 high quality” apartments John Rogerson quay; The corporate future…funded by NAMA.
John Rogerson quay; The corporate future…funded by NAMA.