Maynooth will be remembered as ‘symbol of absolutely failing housing policy’

Political divisions over institutional funds and State investment

Mullen Park, Mariavilla, Carton Grove – the growing list of housing estates swept up by so-called cuckoo funds, mean that Maynooth, Co Kildare, will be remembered as "a symbol of an absolutely failing housing policy", according to local Social Democrats councillor Aidan Farrelly.

The Clane-Maynooth councillor had raised concerns over a month ago about Mullen Park where an investment fund bought out the estate ahead of first-time buyers which joint party leader Catherine Murphy raised in the Dáil.

But it has emerged that the State invested hundreds of millions of euro of Government money in other funds, including €60 million in US capital fund Urbeo, which – according to a report in the Business Post – subsequently bought more than 200 completed units in Mariavilla and Carton Grove, two estates in Maynooth.

“The local authority looked for units in these estates and it turns out they’re competing with the State funds for these units,” said Cllr Farrelly. “That mightn’t have been the intention but that’s the end result.”

The effect of such purchases has rents at just under €2,000, he said.

Ms Murphy said she has raised repeatedly raised the issue of funds “but Covid has hidden a lot of what has gone on over the last year”.

She said Mariavilla had not been offered for sale but for Mullen Park there were expressions of interest through estate agents.

Kildare North Fianna Fáil TD James Lawless believes an institutional fund buying up a housing estate would not be an issue in a functional housing market.

“The reason we are so worried incensed about all this is that there is such a scarcity of supply.”

If another dozen estates were being built in parallel with Mullen Park, with the county council buying one, an approved housing body buying another and an institutional investor buying a third and the remaining nine for first-time buyers, it would not be an issue, he said.

He warned, however, of the butterfly effect of starting to change one piece “and the whole other piece starts to fail” in “an incredibly complex tapestry”.

“It would be really easy for the Government or anyone else to say ‘these funds are terrible, let’s chuck them out’” but two years down the line there might not be any new sites being opened because “there’s no finance any more”.

Forward purchase

The Department of Finance and the National Treasury Management Agency (NTMA) defended the investments and said the sales were funding arrangements which supplied finance for developments which otherwise would not have been built.

An NTMA spokesman said all Irish Strategic Investment Fund investments were designed to increase the supply of homes for renters and are based on “forward purchase”.

On RTÉ’s This Week programme Minister for Foreign Affairs Simon Coveney said he understood that the focus of State investment “has been effectively in funding forward purchase of apartments before they’re built in order to fund the financing of it”.

A former minister for housing, Mr Coveney added that “about 90 per cent of apartments that have been built in Dublin over the last number of years have been funded through that type of vehicle”.

“What the State has not been doing is putting money into funds that then purchase homes that have been built on the open market competing with house buyers. That is certainly not the intention of any of these funds.”

He said “the key issue for the State is we need more and more supply”.

Fine Gael Kildare North TD Bernard Durkan said, however, he had always disagreed with the inclusion of investment funds.

He said the State through the Department of Housing should have been funding “direct builds through the local authorities by private builders”.

Mr Durkan added: “The more interventions you have with more bodies in the building of a house the more expensive it becomes.”

He said approved housing bodies were set up to remove the responsibility from the local authorities but gradually they took over but delivered less and less housing.

Sinn Féin housing spokesman Eoin Ó Broin said: “The idea that public money would be used to block first-time buyers and other working people from buying their home and instead force them to rent at extortionate pieces is totally unacceptable.”

Marie O'Halloran

Marie O'Halloran

Marie O'Halloran is a parliamentary reporter with The Irish Times