The decision by Allianz to abandon plans to invest in Irish residential property, lest it be publicly disparaged as a so-called "vulture fund", should have the warning lights flashing on the dashboard of Irish housing policymakers.
The near-hysterical national debate over the involvement of institutional capital in the housing market is now beginning to affect corporate decision making. That could spell trouble for efforts to bring about an end to the housing crisis.
As revealed in The Irish Times, Allianz Real Estate was contemplating investing in several Irish housing projects, but it was dissuaded from doing so by the local insurance arm. It feared the Allianz brand being tarnished in this market in the heated debate on housing.
We do not know how seriously Allianz was looking at investing, or how much it planned to spend. Nor do we know if it was going to fund new development, or simply acquire units that are already built. Whatever it was, however, that potential investment in Irish housing is now lost.
It is easy to see why Allianz baulked at the current state of public debate. The housing crisis is now so relentlessly politicised that most discussion on the issue is conducted within a framework of stifling ideology.
Those who are most prominent in the public debate, the Government’s political opponents, have succeeded in casting all institutional capital in housing as, somehow, the enemy.
There is little evidence that, as alleged, institutional capital in the build-for-rent sector is exacerbating the housing crisis. There are plenty of reasons to suggest it could play an important role in funding the development of a type of accommodation – one and two-bed apartments in urban locations – that are badly needed.
If a global behemoth such as Allianz can be scared away from the market, so, too, can other institutions who may see the juicy returns on offer as scant reward for the battering their brands may receive. If institutional investment is driven away, the State will eventually have to stump up to fill the gap.
This may be precisely what the anti-corporate side of the housing debate wants, but it is also short sighted.