Housing co-op plan gets thumbs up from US investors

Plans to establish a benevolent vulture fund in Ireland, which would buy up €5 billion of distressed mortgages and let the properties back to the occupiers in a bid to keep families in their homes, have taken a significant step forward.

The organisation behind the proposed National Housing Co-operative said it has received assurances around a significant tranche of funding from US investors following a three-day visit to New York last week.

Members of the Right2Homes group met with several prospective investors and funders, including Patrick Doherty, director of corporate governance at the office of the New York state comptroller, which manages the state's pension fund, the third-largest pension fund in the US with more than $190 billion of managed assets.

The organisation also held a meeting with Limerick-born Michael Dowling, chief executive of US hospital and insurance group Northwell, formerly North Shore-LIJ Health System, which boasts an annual turnover $8.7 billion (€7.3bn).

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Mr Dowling and Irish immigration campaigner and New York publisher Niall O’Dowd have pledged to organise a group of potential US funders once the legislation to establish the co-op here is passed.

A Bill giving the initiative a legal footing, which is supported by Sinn Féin, is currently before the Seanad.

Businessman and Right2Homes spokesman Brian Reilly said without the Bill the co-op would struggle to secure the loans from banks and vulture funds.

He said the plan was to put the homes and the loans in the co-op with the objective of re-engineering the mortgages so people could remain on as tenants, potentially with an option to repurchase further down the line at the price the co-op paid plus interest.

Not-for-profit basis

Only homeowners who cannot pay their mortgage for reasons beyond their control will be eligible for the scheme.

Mr Reilly said the initiative would operate on a not-for-profit basis and would be “off balance sheet”, meaning it would not cost the exchequer anything and could occupy the role currently being filled by vulture funds.

He said the purpose of the US trip was to do three things; gather information about how similar plans were executed in the US; to initiate discussions with potential funders; and to create awareness around the Irish scheme in the US.

“We are wholly confident that this initiative can be achieved, and on an ethical basis, especially following last week’s successful meetings in New York,” he added.

The group also met with Prof Robert Hockett, a former adviser to US presidential hopeful Bernie Sanders, who has championed the establishment of similar initiatives in the US.

Prof Hockett has written to the Oireachtas finance committee in support of the initiative and will appear before the committee in person in October.

The group also recently met with the Irish Strategic Investment Fund (Isif) here, which may consider establishing a special type of bond to fund the initiative.

Separately, the Dublin Chamber of Commerce has called for the establishment of a “housing Tsar” to address the current housing crisis.

The camber wants powers over planning and development, infrastructure investment, and housing delivery in the Dublin region to be centralised to a single body. The recommendation was made in a submission by Dublin Chamber to the Department of Housing as part of the recent review of the Government’s Rebuilding Ireland action plan.