‘The only time apartments were viable was in . . . Ballsbridge, Killiney and Dalkey’

Pat Farrell is putting lobbying skills to use representing institutional property investors

 ‘Pat the Banker’: with a background in health, politics and banking, Pat Farrell is no stranger to the challenges that come with representing a maligned sector.  Photograph: Dara Mac Dónaill

‘Pat the Banker’: with a background in health, politics and banking, Pat Farrell is no stranger to the challenges that come with representing a maligned sector. Photograph: Dara Mac Dónaill

 

If Pat Farrell had trouble being painted as the bogeyman, his working life would have been a nightmare. In the more than 45 years since he left school, one of the State’s most seasoned lobbyists has yet to be in an industry not maligned by the public or in the crosshairs of policymakers.

“Somebody needs to do it,” Farrell says of a career spent first in healthcare, followed by a stint as secretary general of Fianna Fáil, after which he ultimately became the chief spokesman for the banks during the global downturn before leaving to work for Bank of Ireland as it emerged from the depths of the recession.

True to form, his current job is in possibly the most unpopular sector of the day – corporate property landlords – as chief executive of lobbying group Irish Institutional Property (IIP).

Over coffee in a Dublin hotel, Farrell (62) explains his penchant for “taking on causes” which he sees as having problems communicating their message.

His move into the property sector was a new departure after more than 20 years in banking and his appointment comes at a time when developers are increasingly the target of public and political ire for the pace of residential property development in the State. Clearly, they’re well aware of the changing tide of public opinion, so much so that they viewed the foundation of a lobby group to represent their interests as being necessary.

“You’re absolutely correct,” says Farrell. “They say that in a war, or political battle, the first casualty sometimes is the truth and there have been quite a lot of misconceptions about our sector.”

Farrell sees the participation of institutional capital – which, he notes, accounts for less than 5 per cent of the total rental stock available in the Republic – as being critical for a mature property market in which development comes from different sources.

That requirement is particularly acute given calls to stem urban sprawl and build upwards in a city not known for its high density housing, and to improve the viability of apartment building in Dublin.

Viable apartments

“The only time that apartments have been viable and built in Dublin was in very high end areas such as Ballsbridge and Killiney and Dalkey and places where there was enough affluence in those areas for people to be able to afford to purchase without resorting to material borrowings,” Farrell notes.

So if that is the case, is there any way the State can promote apartment living without cementing the status of a large cohort of people as a generation of renters?

“We’re actively promoting the concept of shared ownership and shared equity,” says Farrell, referencing State-backed interventions currently used by policymakers in the UK.

Solutions from the industry and its lobby will have to come thick and fast if it is to avoid some of the measures being promised by political parties. In the election, a massive programme of social and affordable house-building and rent freezes were among the courses of action being proposed, notably by Sinn Féin.

“I absolutely welcome the commitment that is now there, post the election, for the Government to invest in social housing because there’s a narrative out there that says that the market was supposed to do this. There was never any implicit or explicit contract with the market to provide social housing,” Farrell argues, adding that models exist whereby the private market can work with the State to bring funding to the market so as not to overburden the exchequer.

“There’s no other source of capital in this market,” Farrell says.

He also flags their successful record and notes that over the coming three years, his members – which include multinational giants such as Kennedy Wilson and Hines in addition to domestic players including Cairn Homes, Glenveagh Properties and Ires Reit – will build 14,000 units for rental and purchase.

Rent freezes

Does that optimism remain after the uncertainty caused by the recent election?

“Well, the election is the election. We respect the political process, we respect everybody’s mandate, but I would contend that now the fog of political war has cleared, we need to be evidence-based about what we do next,” says Farrell who is, unsurprisingly, against the idea of a rent freeze. He says it hasn’t worked in any city in which it has been tried.

While it may be easy, and in some quarters fashionable, to lambaste the likes of Farrell for their role in promoting the interests of developers and private funds – and in some cases dismiss their views – that would be a mistake.

Farrell has seen first-hand the baleful influences that poor housing policy can have as a board member of tenants rights advocacy group Threshold and Fold Ireland, a body which provides apartments and houses for older people with families, and this makes him all the more aware that the rental market is a “very difficult market” at the moment. The solution: “bring on more supply”.

From Leitrim village, Farrell is the son of an auctioneer father and homemaker mother. He grew up a “townie”, but his father had a “farm of land” that he and his brother would tend in the summer months.

At 17, Farrell finished education to begin a career in healthcare, locally in Leitrim at first before ultimately rising to the position of chief executive at Galvia Hospital in Co Galway, now part of the Bon Secours group.

After six years at the hospital, he saw a newspaper advert for a vacancy as Fianna Fáil’s general secretary – at the time the most powerful party political administrative position in the State. The role required developing election strategies, selecting candidates and the formulation of policies.

He wasn’t a party member at that time but his father had been a member of the Fianna Fáil national executive for 30 years.

“I think at that time what I probably brought to the party was a professional background, a business background, but also political heritage,” he recalls. Farrell would ultimately work for three Fianna Fáil leaders – Charles Haughey, Albert Reynolds and Bertie Ahern – a tenure he suspects could be a record.

Opposition benches

During his period in office, the party was in government between 1991 and 1994 before being consigned to the opposition benches until the 1997 election. Farrell preferred the time in opposition “because in opposition, the entire political leadership of the party focused on the ambition to be in government”.

How does he view the party now, raw from the election at which it won just 38 Dáil seats? “You have to consider the fact that Fianna Fáil has been written off several times since the election of 2011 and yet has remarkably managed to build its base . . . That said, it’s an extraordinarily competitive landscape and the old certainties are gone. There’s a lot of fragmentation across the political system and that poses particular challenges for large political parties.”

During his time, Farrell dealt with issues such as the beef tribunal, contributing to that inquiry after conducting an audit in the party. Famously, he was selected as a senator by Reynolds in the interregnum after the 1994 election and before government formation.

That move was for a period of three months. “It’s something that’s been appropriated by all political parties in turn,” he says, adding that he did attend on the one sitting day during his term and probably contributed more words than most, though adding modestly: “I’m not saying they were of any great consequence.”

The appointment as senator was raised by Sinn Féin finance spokesman Pearse Doherty during the inquiry into the banking crisis in 2015 when Farrell was called as a witness. He put it to him that – as former Oireachtas members have lifetime access to Leinster House – the appointment was a mechanism to allow Farrell roam the halls of Leinster House for the rest of his days lobbying whenever and whomever he pleases. Is that the case?

“Absolutely not,” he says, adding that it’s a “well understood convention that taoisigh would appoint somebody who would be a party official rather than somebody who would be running for the senate because that would be seen to be bestowing preference on one particular candidate”.

In any event, he says his interaction with the levers of power are “on a professional basis”.

‘Without fear or favour’

“I engage with all political parties without fear or favour because I believe in paying the system respect across all parties.”

And would he be in Leinster House once a month these days?

“Probably, but it might only be for 10 minutes, or to walk through it [to the other side] on my way to somewhere else . . . I go to Leinster House when I need to go but I’m not somebody who’s a part of the furniture around it.”

After he left Fianna Fáil in 1997, Farrell joined EBS for a period before becoming chief executive of the Irish Banking Federation (IBF) – predecessor to the Banking & Payments Federation Ireland – in 2003. As chief spokesman for the banking sector, his time at the lobby group spanned two distinctly different periods.

For the first half of his tenure, the sector was expanding quite rapidly in tandem with the global economy. That success bred complacency across the industry and Farrell didn’t escape the banking collapse unscathed, defending his members when the going got particularly tough.

It was he, who, in July 2008, assured the media that the Irish banking sector was competitive, well-capitalised and had a strong capacity to absorb external shocks. More than a decade on, does he regret making those comments?

“I had an assumption and a view that we were in a particular space, and in the aftermath we weren’t: of course I regret that.”

Farrell did, however, learn a lesson from the comments. He has since “raised the bar in terms of interrogating” his members on different issues, he says.

After almost 10 years with the IBF, Farrell took up the job of head of communications and public affairs at Bank of Ireland in 2013.

At that time, Bank of Ireland was viewed as the least bad bank in terms of the bailout it required from the State, but Farrell said there were plenty of challenges for him in his role, not least to restore its reputation in the eyes of the public.

In 2013, Shane Ross, currently acting minister for tourism and transport but at that time the business editor of the Sunday Independent, referred to him in a column as “Pat the Banker”, saying his mission to soften the image of Richie Boucher (then the bank’s chief executive) placed him “somewhere between a masochist and a madman”.

Tough issues

Toward the top of the list of tough issues he was forced to deal with at the bank was the tracker mortgage scandal. Did Farrell question the arrogance within banks that allowed the tracker scandal to happen in the first place?

“Was it arrogance? It was undoubtedly. If I look across the sector and the amount of time it took to acknowledge the issue and the scale of it, yes you could characterise that as arrogance . . . it could have been addressed much faster because it did undoubtedly cause distress for a large number of people.

“We’ve all seen since then that we do need to change the culture of banks and that’s accepted by everybody in the banking system.”

It’s unlikely he would have been able to make these remarks had he still been entrenched in the banking system, but they appear to be strongly held views.

Although his lobbying efforts no longer extend to the banking sector, Farrell remains influential in the nexus between industry and politics. His reading list – he’s currently reading a history of the rise and fall of the East India Company and has just finished the third volume of a biography of Margaret Thatcher – makes clear why he has chosen such a path.

But as he edges toward the age of retirement, does he want for more time to feed his fondness for cycling and reading?

“Sixty-five is seen as an age to retire at but I’m somebody who would have to keep involved in a meaningful way in something or other,” he says.

After making successes of careers in health, politics and banking, it’s not as if he’d be short of challenging offers.

CV
Name: Pat Farrell
Age: 62
Position: Chief executive of Irish Institutional Property
Lives: From Co Leitrim, Farrell now lives in Sandymount, Dublin
Family: Wife Margaret and children Cian and Ria
Something you might expect: Farrell “likes the challenge of trying to communicate what can sometimes be complex or challenging” and also has “a penchant for taking on causes not always popular”.
Something that might surprise: Despite having spent a long career in banking, Farrell has no interest in golf. Instead, he’s a keen cyclist and takes on 100km cycle roughly once a month.

 

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