Richard Boyd Barrett: NAMA scandal sold Ireland to vulture funds

Well where Deputy McGuinness ended is a good place for me to start. You couldn't make it up and that's the truth about NAMA. That's, that's, absolutely, absolutely. If only you had taken the left turn at the right point. You'd be in a different place. We might all be. Yeah, NAMA is just, when the history books are written, NAMA will go down as one of the greatest scandals ever and I find it sort of pretty amazing, shocking really, but maybe not totally surprising that the government try and present it as some sort of success story on the basis that it, the money, the 30 billion, 31 billion that the state initially paid out to take over the assets of the developers who'd bankrupted the country, leading to a decade of austerity, huge hardship for the country. We paid 31 billion and the government's argument is, well, we got that back and we made 5.6 billion on top so everything's fine. In fact, we could even put it down as a success. When in fact, what we did was create, and it was entirely predictable, some of us predicted it and said it absolutely clear at the time, that the decision to sell off all those assets to investment funds and vulture funds, which were the, the plan for which obviously was hatched when NAMA was originally set up, but its mandate in 2009, wasn't it? I came in in 2011, but most of the sales happened and the big push to sell off to the investment funds happened under the Fianna Gael Labour government, which came in in 2011 and I remember it so well, Michael Noonan saying this was necessary to sort of re-stabilise the Irish property market and at the time some of us said this was a big mistake. We had the biggest property company in the world, biggest property company in the world and most of the, a huge amount of the property, let's put that, a huge amount of the property, I was just reading over some of the stuff, was in the Dublin area, where the housing crisis is now concentrated. It had a potential, I think NAMA had a potential to build about 86,000 housing units. Now if all those had, as some of us proposed at the time, had been public and affordable houses, as against, if you look at what the delivery in the years intervening of public and affordable housing has been, it was for most of the years that those sales, that fire sale was happening to the vulture funds that Michael Noonan invited in. I think a lot of this was coordinated by a group called the Clearing House Group, who had special access, it was organised special access to the sort of big companies, to the Department of Finance and the Department of the Taoiseach at the time, and they were essentially writing the budgets, I think, but they met, I think 2013, if I remember correctly, Michael Noonan met about 60 of these investment funds, where they planned the massive sell-off of this enormous property, the biggest property portfolio in the world, to these investment funds, with all that potential to deliver housing that could have been public and affordable housing, but instead was given to these investment funds, and now we're buying it back, right, that's what's happening. We're buying it back, the local authorities are buying it back, AHBs are buying it back to provide social housing, but at the prices set by these developers who got it off us at knockdown prices, and you see the real maths of this, the real arithmetic of this, is we paid 31.8 billion, we got 5.6 billion in profit, that's 36.4, but in the period, in the intervening period, between 2010 and 2025, house prices went up 150 percent. Now, so if you take that 31.8 billion figure as the sort of, you know, the bottom of the market for that portfolio, the par value was 70 billion, but that's what we paid for it, 150 percent increase brings that up to 79.1 billion, so we got back 36.4, but it went up to, and probably more in fact in reality, but at least, you know, this is a back of the envelope calculation, but it's probably an underestimate of what its actual value is when it was being built out and sold off, 79.1 billion. So, the investors who got it, the investment funds and the property speculators and developers walk off at about 42 billion euro. Probably that's a conservative figure, but I would say that's the sort of minimum figure of what they've walked off, and what that translates, I mean, that's all maths, right, but what it translates is, if you take Cherrywood, which is one of the big sites that NAMA took over from developers who'd helped bankrupt the country's biggest residential development in the country, in my area, the house is now there, well the average, if you take in the really expensive ones, is a million euro prices, a million euro. If you take out the really, really expensive ones, the average is about six to seven hundred thousand. That's what they're, that's what you have to pay to buy them, right, so what does that rule out? 80% of ordinary people, 90% in terms of their ability to buy that, I'd say roughly 80-90% of people couldn't possibly afford that, but that's what they're selling that. You go on, look at stuff, houses being sold in Cherrywood at the moment, they were all in our hands. Not only that, but we put in, in just Cherrywood as an example, we put in 15 million of taxpayers money in infrastructural funding to that development, so the parks and the roads were paid for by the public, but the developer walks off with the profits, selling them at six and seven hundred thousand, and insofar as we get the social housing, the 10% social housing, we have to pay the developers for that, at prices they set, right, so we sold it to them at a song. They, Heinz, in this case, the company, one of the big investment investors that was invited in at the time, sat on it for about 10 years, because they were in no hurry to build. They were flipping sites. Mel Reynolds reckons that Heinz had made a profit before a single brick was laid in Cherrywood, because they were already starting to flip parcels, and of course TASC have done reports on this in terms of the wider NAMA portfolio, is a lot of the investors who bought this had no intention of buying. They were just going to hang on to it until the housing crisis got bad enough, that their property investment had increased in value, and then they'd sell it on, so they'd sit on it, so that they actually wanted to wait, and to create a housing crisis, before they would even consider building, or more likely flip it on to somebody else to build, who would then build it out, but at prices that are massively inflated, and then we buy it back from them. I mean, this is like, the mafia couldn't have made that one up. We sell it to them at a song, they make a massive profit, and we buy it back from them, and we pay for the infrastructure for them, and in exchange for the infrastructure that we paid, in the Lehigh funding I mentioned, 15 million in Cherrywood, just to give one example, in the original proposal around Lehigh funding, there was supposed to be a 40 percent of the development give back, in terms of affordable housing, 40 percent. That was dropped within, I think it was about four weeks, that was just taken off the original Lehigh proposal. We thought, happy days, so we're going to get 10 percent social housing, and we're going to get a big chunk of affordable housing, because the state has put in this Lehigh funding. That was then dropped, no 40 percent, we were going to get 15 million worth of affordable housing. In other words, we're going to get back what we put in, which was a disgrace, but we didn't even get that. Do you know how much affordable housing we got in Cherrywood? None. Zero. Not a single affordable house. It's unbelievable. Developers just don't do it. Not only that, but the entire Cherrywood was supposed to be a kind of flagship development. It wasn't going to repeat the mistakes of the past. It was a new town, basically, as I said, the biggest residential development in the country, one of the biggest in Europe, and it was going to be the 10 minute town. You wouldn't need a car, because we need to get people out of their cars, you wouldn't need a car because you could walk to everything. You had your parks, infrastructure, paid for by the people. You have your six or seven hundred thousand euro houses, which only, you know, a small group of people can afford, or the stuff that we buy back. But at least you would be able to walk to the town centre. There was going to be a town centre. Do you know what the town centre is? It's a massive hole in the ground that the developers are refusing to build. It's not profitable for them. They don't want to build a town centre. They have no interest in a town centre. Now they've got variations on the strategic development zone in order to increase the density, so they can make more profit from building more units on the site, or it becomes more valuable after it's done so, and then, or they get, you know, the planning for it, or the change in zoning for it, so their value, their investment decreases in value again, but the people don't have a town centre. In fact, it's so ridiculous, there's a bridge that carries the Lewis over from one side to another, but there's supposed to be a pedestrian bridge as well, because there's people living on the other side of that, but the developer doesn't want to build a pedestrian bridge either, because it's connected to the town centre. They just don't want to build it. So, young kids are running along the Lewis line from one side to the other, in what is a serious safety hazard, because the only shops like you can, there's a spar express across the road from where the town centre is supposed to be. It's supposed to be a town centre with like doctors, and cinemas, and supermarkets, just a big massive hole in the ground, and they're allowed away with it. They're allowed away with it, and we're Fianna Fáil and Fine Gael councillors are voting in Dunairie right now to give them increased densities, so their investments are worth more. So, it's just like, you couldn't make it up. Now, the thing is, like, and that's replicated all over all over the country with the NAMA portfolio. I think Mel Reynolds estimated that 70 percent, NAMA had 70 percent, they estimate, of the zoned building land around the greater Dublin area at one point. So, it's the whole land bank. So, they dictated what we're seeing now. House prices that nobody can afford, and of course, you know, who can afford that stuff? The big investment funds can buy the stuff up, or the state pays over the, you know, massively over the odds to buy stuff back that it sold originally at a knockdown price in terms of social and affordable housing. But, that could have all been social and affordable housing, and we could have solved the housing crisis, but now they've gone through all that. They've largely made their profits from the NAMA portfolio. We're going to do it again. We're going to do it again. We haven't learned the lesson of this massive mistake of allowing these guys to run off at all the profits, and control the housing sector, and drip feed the housing, and profiteer from it, and end up selling it back to us at these extortionate prices that nobody can afford, that are fueling the housing and homelessness crisis. We're now going to do it all over again by rezoning a big pile of land, which is currently worth very little agricultural land, and we're going to rezone it, so overnight it'll be worth a fortune for the private owners of it, who are all the same people again. The land bankers and the speculators. So, this is happening as we speak, and I'm just amazed nobody is, like, ringing the alarm bells of it, and, like, the scandal of it is just, to my mind, is sort of beyond belief. In the Dun Laoghaire area, I mean, this varies, right, but roughly speaking, zoned agricultural or green space per hectare is 80,000 euro. If it's zoned as residential per hectare, that value goes from 80,000 per hectare to 5 million. That is a 625% increase overnight to the owners of that land. That's what's been voted through in Dun Laoghaire town. We voted against, goes without saying. The Finnfallers and the Finnagalers voting in favour of this. Overnight, the owners get a 625% increase in their investment for doing nothing. Nothing. Now, so they're made multimillionaires, but this is not a victimless crime. Where does the money come from? Well, it's just like if we remember what happened with Nama. Somebody's going to pay for this, and the person who's going to pay is the end purchaser of the home or the renter, because when the houses that are finally built, if they're ever built, and they'll do exactly the same, by the way, they've over-zoned. This proposal from the government, which came from central government, is the national frameworks looking for land for 528,000 new homes, 15,000 hectares to be re-zoned, whereas the required council land is 300,000. So we're massively 50% over zoning, but all the people who own this are going to be made multimillionaires overnight. As I said, 625% increase, but when and if they build, they will build it at, they'll be selling it at the 600, and 700, and 800,000, or a million euros, some of the stuff is now going in Cherrywood. So the ordinary person who's trying to buy a home pays for this, or the people, because not many working people can actually afford that, big investment funds will go in and buy it and rent it out, and they'll rent it at 3,000 euro a month, or 3,500, that's what it's going for in Dunairie at the moment. Making an absolute fortune from unaffordable rents, fueling all the homelessness and the despair over extortionate rents that nobody can afford. So that's where the increased value that that land now has been given because of a vote of a group of councillors in Dunairie right now, and they're going to do the same in South Dublin, and they're going to do the same in Dublin City, and they're going to do the same in Fingal. That's where that money comes from. It ends up in houses that cost 600, 700, 800,000 euro, or rents that are 3,000 or 4,000 euro a month. So ordinary people pay, and maybe with some of it again, just like we did last time, the state will end up buying it back again. Instead of us just bringing into public ownership the agricultural land and rezoning what we need to build affordable housing, public and affordable housing, which is what they do in places like Finland, where they've actually tackled the housing crisis and reduced homelessness, where the land bank, most of the land bank, is in the control of the public authorities. So they decide, it doesn't mean there's no private housing by the way, I often hear the government say, oh we don't want any private housing, that's not true. But in Helsinki, the public authorities decide what is built and whether it is going to contribute to actually providing housing that is needed and that is affordable and so on. But here, we just hand it over to the speculators and to the hoarders and to the profiteers in the property sector, and we make people multi-millionaires overnight and we screw the vast majority of ordinary people who are just looking for an affordable roof over their head. So I just think it's a scandal that this is happening, when some of us argued way back when that NAMA, the mandate should have been changed and we should have developed it as a state construction company, take the public land bank, take the land bank, the zoned land and the land we're planning to rezone into public ownership and build public and affordable housing. And even now, that's what needs to happen. If we're to have any hope of solving the housing crisis, the absolutely dire housing crisis. And all of this does, you know, at the end of the day, I mean that's all sort of history and arithmetic and all the rest of it, but at the end of the day, what it all comes down to is more than 17,000 families in emergency accommodation, thousands and thousands of people paying rents they can't possibly afford, paying 50, 60, 70 percent of their income on unaffordable rents, or people mortgaged up to their neck, where if anything goes wrong with the economy, we'll find ourselves right back where we were after the crash in 2008 or 9. If there's any wobble in the Irish economy and people are landed with these massive debts that they can't afford, we'll be right back where we were in the last crash that sent the entire country over a cliff. I mean, will this ever stop? I don't think so. I don't think it's going to stop.