Buying a home gets harder: Cuckoo funds a renewed imperialism

It may be a renewal of the post-1960s optimism that declared the 1970s would be socialist to suggest, or even hope, that the arrival of cuckoo funds might force us to decide whether this is a society or an economy and act accordingly.

After all, as we prepare to celebrate the centenary of our liberation from one form of imperialism it seems bizarre to welcome another — and how else could the idea of corporate investors buying an ever-increasing proportion of homes so an ever-increasing number of people are condemned to being tenants for life be described?

It certainly seems a fair description of last year’s housing market when investment funds spent more than €1bn on almost 3,000 homes.

In 2018, one in 10 homes sold in Dublin was bought by corporate investors.

The soul-destroying challenges of trying to buy a home will be exacerbated by businesses with the commercial punch to set prices beyond the reach of the majority of citizens. It is now all but impossible to become a first-time home owner without inherited wealth.

Dublin’s anticipated post-Brexit financial services boom will intensify those pressures.

The barriers that prevented anyone who did not inherit a farm becoming a farmer are now ring-fencing the housing market.

Opportunity and birth are linked in a way that social democracies struggled to make redundant.

Our veneration of property rights — increasingly a modern feudalism — is reshaping this society in the most disruptive way.

It is wildly optimistic to imagine it will end well. It may also, in the blackest of black ironies, stymie economic growth.

In the digitised world, unfarmed land is the least productive resource yet everything we do is benchmarked against land values. This makes Ireland unattractive for mobile capital and talent.

Office space is too expensive and having to pay workers so they can pay sky-high rents to cuckoo funds is an uncompetitive environment.

Many families spend 60% of income on housing, a ratio out of kilter with international norms.

America’s Federal Housing Association considers anything over 30% a symptom of market dysfunction.

Unless we break the utterly contrived link between land prices and housing, our housing crisis will be with us forever.

It may defy received wisdom, but land and property prices are the primary threat to prosperity and stability because without an affordable place to live and work, even the smartest, most talented people create little enough.

We have been here before. The infamous Kenny report set out a solution but it was ignored.

Indeed, the very opposite happened when social housing obligations were abandoned.

Over 120 years before the Kenny report, when an older imperialism held sway, the Tenant Right League issued its Three Fs demand: Fair rent, free sale, and fixity of tenure.

Those demands nurtured a revolutionary movement, one that culminated in the rebellion we are about to celebrate.

Which raises obvious and disheartening questions: Where does investment end and exploitation begin and, most importantly, will we ever learn from our mistakes?

This, as the old harrumph-cum-joke goes, is hardly the Ireland Connolly and Pearse died for — and the joke is on us all.

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