October 5, 2011
Sacrificing jobs to protect landlords is plain wrongPosted in Irish Independent · 176 comments ·
THERE are few more evocative images in Irish history than the Irish tenant being evicted by Irish police on behalf of a foreign creditor. For many, this injustice sums up the primary reason for our independence struggle.
It is clear that without the legal system that favoured landlords over tenants, great national movements like the Land League would not have been founded. Ironically, a more flexible legal system would have done more to protect landlords than the rigid legal system, which was designed to secure the landlords’ interests but led to their undoing.
What is sometimes overlooked is that in some cases the landlords themselves were bankrupt and were evicting tenants at the behest of their own creditors. For much of the second half of the 19th Century, land prices fell in Ireland as global food prices dropped in response to an “invasion” of cheaper food and grain from the USA and Latin America. Many landlords were greedy and venal and deserved what they got, but some were not so evil and found themselves squashed by economic forces beyond their ability to control.
That said, it is still clear that the overwhelming victims were the small tenant farmers, who were crushed by a legal system that supported the rights of landowners over all others.
Legal inflexibility and political inactivity led to revolution where the landlords lost everything.
Fast-forward to today and little has changed. The interests of property owners and landlords are still given primacy over the interests of tenants and small businesses. The problem for an economy with 500,000 on the dole and youth unemployment running at 30pc is that landlords don’t create many jobs.
In fact, as was the case in the boom, land and property generate nothing in terms of innovation, ideas, dynamism or skills.
Look at the great companies of the 21st Century: they are founded on human ingenuity, not property punting. Investment in property can only “house” innovation and creativity. In contrast, small business people and entrepreneurs do create jobs and opportunity for others. These people take big risks, without any covenants or guarantees or “upward-only” clauses in contracts and these people are the engine of employment growth.
The legal system should not be used as a battering ram to bully them, any more than it should be used as an instrument to rob legitimate landlords from their fair rental income. There has to be a balance between the interests of the tenants and the interests of the landlords.
There has to be co-responsibility. The tenant and the landlord need to display give and take. When the domestic economy is on its knees, every job needs to be minded and, therefore, solutions to tenant-landlord conflicts rather than evictions should to be the norm for the legal system.
It is against this complex background that the following case is so distressing and emblematic of indignation over pragmatism, where there is only one real loser — the worker.
Next Monday morning, the Sheriff of Dublin, together with his bailiffs, will evict a successful small business in South Great George’s Street. The Sheriff is responding to a court order based on a clause in which allows either party to terminate the lease. So legally, there is nothing wrong; however, legally isn’t enough because ultimately when the business is closed the workers will pay.
As a result, the workers — 22 of them — have decided to barricade themselves in and, consequently, the bailiffs will have to drag these workers out of the premises by force.
The business in question is a thriving bar called Shebeen Chic, which over the past four years has established itself as part of Dublin’s nightlife.
Having lost money initially, this management has turned the premises, which was previously the site of four unsuccessful restaurants, into a hopping venue of music, comedy, food and late night fun. Now it will be shut down.
The workers are the ones who will lose their livelihood. The staff have decided not to take this lying down and their protest next Monday will draw more attention to one of the most perplexing legacies of the bust which is still the primacy of property over employment interests in a country with too much property and not enough jobs.
When you gain a bit of altitude from this and other cases, you see a similar pattern. Many landlords need the rent to service debts they incurred in the boom. And so even if they wanted to do a deal, they might be squeezed by banks to whom they owe money.
It is not always banks, domestic or foreign, that are the sources of the problem. In many cases, it is also Irish pension funds.
The reason we have upward-only rent reviews and nonsense like that is to ensure that the owners of commercial property don’t lose out from the property crash. How mad is that? Many landmark buildings in the city are owned by Irish pension funds. So for rents to fall to reflect trading reality, Irish pensions need to take a hit.
So it comes down to a scrap between the interests of those about to get pensions with those about to go out to work. Pensions are seen as sacrosanct while society tolerates the fact that so many young workers must go on the dole or emigrate. Why should pensions be more protected in a downturn than jobs? Why should the wealth in pensions be maintained, while the wealth in houses allowed to fall?
This inequality must stop. The interests of the young cannot be indefinitely trampled to protect the interests of the late middle aged. For many years the generational nature of Irish economic policy has been evident, whether it was in the housing boom where the young transferred resources and money to the older generation or today when the young are again expected to pay.
NEXT Monday’s eviction is only the latest instalment in Ireland’s battle for economic survival. As the pie shrinks, these battles will become more frequent.
No more than in the late 19th Century, things have to change. In the first decade of the 21st Century, the laws need to change to reflect these new realities because the lesson from Irish history is that if the law protects landlords over workers and tenants, this will soon become the unique source of the grievance. Our history tells us that it’s easy for things to spin out of control, so why let them?