Politicians should be prohibited from objecting to housing projects, a leading property developer has suggested.
Cork developer Michael O’Flynn, chairman and CEO of the O’Flynn Group, has warned that the ongoing housing crisis is costing the country jobs and foreign direct investment; that the regions will suffer more than the greater Dublin region and that private developers, who are still regarded “as somewhat toxic”, must be part of the solution.
And he described the Central Bank’s mortgage rules as part of an “overcorrection” which is punishing a generation of “ordinary couples” who have no hope of being able to buy a home like their parents did.
“Lots of people got it wrong in the past, including developers, the Central Bank and the banks,” he said.
“Now we find ourselves back in a housing market that’s pretty much dysfunctional.
“We have a Central Bank, now to my dismay, actually saying to the world ‘stay renting: we won’t allow you buy a house’.
“The multiplier of salary at three-and-a-half times, compared to other countries at other four-and-a-half times, means that some people with today’s salaries have no hope of buying a house.
"Your standard couple today, a garda and nurse-type buyer, really are struggling to buy a house and we have done nothing about it.
“If the housing market is a risk, there are insurance products and other ways of dealing with it.
We went mad in this country with mortgages, we gave over 100% mortgages, we did all kinds of stupid things and now we are over-correcting to the extent that average couples are actually priced out the market.
He made his comments in a wide-ranging interview with Jonathan Healy's Red Business podcast on Cork’s RedFM.
Mr O’Flynn, whose firm is actively engaged in residential development on up to 12 sites in Cork and Dublin, said while the vacant site levy is helpful, it won’t force people to build when it’s just not viable to do so.
“The blunt reality is that we can’t build houses or fund houses unless we make 15% margin,” he said.
“That’s a minimum margin necessary to take some of the risk we are taking for the bank to fund us.
“The developer community are still regarded as being somewhat toxic, maybe that’s a strong word. But people need to get over themselves.
“If you are going to fix the housing crisis, you’re only going to fix it by having developers developing.
“You will not get any scale of development in this country, or this region, unless you have private development.”
He repeated his call for the creation of Strategic Land Reserves, which would involve designating thousands of acres of unzoned land in urban areas in rent pressure zones for house building but said politicians should be prevented from objecting.
“They try to be all things to all people and they get themselves into all kinds of difficulties with that,” he said.
We need more leadership, we need them to stay out of objecting on behalf of local residents. They should also be prohibited from doing so.
“They have a dual mandate of serving the people but also of coming up with the legislation and the policies that enable an economy to work.
“This economy is not going to continue to do well because of the lack of housing. And the regions are going to be more affected than the greater Dublin area because in the greater Dublin area people can go out and out and out and they can still commute. We don’t have the commuting options from county towns.
“Nobody wants to talk about it but the sooner we face up to the fact that we are losing jobs, then we start dealing with the fact that this housing thing is a lot more complex than the politicians and government want to admit.”