November 2, 2015

Why we need rent controls

Posted in Sunday Business Post · 121 comments ·

It appears to be an article of faith amongst the mainstream that rent controls are a “bad thing”. The last time we had such conformity or groupthink, we had the soft landing brigade reassure the country that “everything would be grand” and their models said so. Well in the end we weren’t so grand, were we?

The economic models of the Irish economy proved not only to be inadequate but they proved to be dangerous. How many times do we have to screw up to realise that economics is not a science?

The economy is not a mathematical equation that delivers scientific answers and obeys rigid laws. Economics is an art as much as a science; it involves human nature, group psychology, political aspirations and lobbies, credit cycles, social forces, fads, fashions, fraud and downright manias.

Nowhere are all these idiosyncrasies more evident than in what, to borrow a rugby expression, could be called “the breakdown”. The breakdown in rugby is that place when the ball goes loose and stuff happens on the ground, which even some of the best referees are helpless to police. (Many, many years ago while playing in the rarified position of winger in a school’s cup final at Lansdowne Road, I remember getting caught in the breakdown and realising pretty swiftly why I tended to offload quickly!)

The breakdown in Irish economics is the housing market. Stuff happens at the breakdown that does not comply with any rules of traditional economics.

The housing “breakdown” is a chaotic intersection of planning, credit, demographics, psychology, advertising, fear and loathing, the need for accommodation, hoarding, sub-letting, banks, auctioneers, and of course punters – renters and landlords both big and one-off. At the breakdown, first time buyers compete not just with each other, but also with “one-off” landlords who hope to turn the buyer into a permanent tenant. Bigger developers are pitted against foreign private-equity funds and the various international land hoarders who are waiting for prices to rise before selling up and moving on.

And the referee is never impartial. We have policy, not just housing policy but political bias and ideology, with one shower preferring to side with landlords and the other shower with tenants – as if the interests of one are at odds with the interests of the other when in fact, they are symbiotic.

Into this mix we have all sorts of incentives, tax nudges and policy shoves which have led to a housing status quo, which in Ireland over the past 20 years has been as dysfunctional as any market anywhere.

I say forget the models and look at the evidence.

Rugby is not played “on paper” but “on grass”; the Irish housing market doesn’t take place in charts and in textbooks but in real life, in real time, involving real people.

In reality, the Irish housing market doesn’t behave rationally but swings violently. Either we are building too many houses in the wrong places or building too few houses in the right places. It lurches between having too much money to having too little. It is characterised by 30 per cent swings in rents on the up and the downside (just look at the chart) and mass hysteria, leading to a generation of one-off landlords who were promised riches but are left with negative equity, many still technically bankrupt. We also have a banking system salivating over the prospects of renewed hysteria that will drive its profits, but who are so terrified of having “skin in the game” that they lobby to make sure there is no such thing as “non recourse mortgages” which might make them think again.

Look at the reality, not the textbook.

Now we are in a situation where there is an acute accommodation shortage. Here are the facts as laid out by this paper last week.

Since 2011, Dublin rents have risen by 35 per cent, including a 10 per cent hike in the last 12 months. One in five Irish people now live in rental accommodation, more in urban areas – a doubling of the total between 2006 and 2011. Meanwhile, house completions have collapsed from 93,419 in 2006 to around 8,000.

Put bluntly, more people are paying more to fit into less space. By any standards, Ireland has a housing crisis.

The reality is that the cost of this crisis is being borne not by banks, landlords or developers but by renters and first time buyers. That’s the truth. Say it loud and say it clear: the cost of the massive housing market failure is being shouldered by renters. That’s it, plain and simple.

Is this the norm? No.

Look at arguably the most successful rental market in the world, Germany. It has had rent control for decades. Look at the chart showing back to 1996 the dramatic swings in the Irish rental market compared to Germany and Netherlands. Both in terms of absolute cost of rents and the wild swings in rents, Ireland is an outlier. The system isn’t working.

German rents don’t jump around like in Ireland but increase slowly with the rate of inflation and population growth. There is no glut in building with rent controls. In fact there is the opposite; slow, steady building and slow, steady rental yields to landlords. A new law in Germany was brought in this year called “Mietpreisbremse” or rental price brake – which does what it says on the tin. This is added to the traditional “Mietspeigel” which stipulates that rents must stay the same for four-year periods and everyone can see the rents via a transparent system.

And the German system gives landlords a break too. Landlords can raise rents after having carried out work and new builds are not subject to old rent rules. So both sides are happy. Paris with a more similar “one-off” landlord structure to us, also has rent control and we have not seen a massive fall-off in building in the French capital. So too does Stockholm.

Rent control, if only to prevent the tenant bearing the individual cost for the collective failures of the Irish housing market, is a good idea. International evidence shows that it also works in many normal countries and doesn’t lead to a massive fall off in building. It may also help move the Irish rental/housing market towards a more consistent footing. In order to placate landlords, rents could be set so that a minimum yield and max yield to the landlord is taken into consideration, as well as the average of rent for the past four years in order to protect tenants. There are lots of ways to go about it. No one needs to be dogmatic.

One thing is clear: the present system in Ireland isn’t working. So why pretend it is?

There seems to be a lot of ideology involved in this debate. The mainstream economics profession and the property/landlord lobby appear to argue that we shouldn’t introduce rent controls because it interferes with the “free market” or the status quo. But this is silly because the market isn’t free; it is rigged at every stage and the “status quo” doesn’t deliver stability but delivers massive instability.

If we really want a free market in housing, we should scrap all tax breaks to property, stop allowing debt interest costs to be deducted from tax liabilities, stop any tax incentive into any form of building, introduce “use it or lose it” schemes in planning, introduce “non-recourse” mortgages and address a whole variety of other legacy interventions in this most tampered with market.

Until these are done, signaling out rent control as being uniquely distortive smacks of ideology, group think and a weakness for thinking economics is a pure science when in fact is it far from that. Groupthink and the tyranny of conventional wisdom are very dangerous – we of all peoples should be aware of that!

  1. Surely the real problem here is debt or unsustainable debt, in the form of mortgages based on negative equity, to be more precise. Would debt forgiveness not fix the problems just as effectively, if not more so, than introducing rent controls? Everyone would be happy, including the free-marketers. But of course, if that were to done, we all know who would have to take a hit!

    “The economic models of the Irish economy proved not only to be inadequate but they proved to be dangerous.” Dangerous to whom? Up until 2008 and the decision to bail out the banks (which David would know more about than anyone else!) they were probably working quite well. Whatever flaws were revealed, need not have proved disastrous. The country got played. That’s it in a nutshell.

    • aidanxc

      Debt forgiveness is just absolving people from the stupid mistakes they made in the past – how does that help a new first time buyer?

      Bring in rent controls, get rid of the amateur landlords and remove property as the investment of choice for Irish people and banks.

      We need people to be promoting innovation and non-zero forms for investment rather than playing beggar-my-neighbour via property speculation.

      • And just what were those ‘stupid mistakes they made in the past? Is building a nest egg for your retirement a ‘stupid mistake’? Admittedly it is speculative but that is what you have to do in order to accumulate, as the well-worn phrase goes. Irish people were strongly advised to invest in property, from highly-placed and authoritative sources. It was considered MAD not to.

        As far as first-time buyers go, the best advice that can be offered to those poor creatures is DON’T BUY! Avoid the stupid mistakes of the past.

        Bringing in rent controls is not as easy as it sounds. Let’s say I am a landlord and I am renting property to you. The government says I cannot charge you more than X. I go away and think about it. The following week I arrive at your doorstep with a bill for your rent, amounting to X. In addition, I have another bill made out for an arbitrary amount in respect of maintenance and care that I have to carry out on the property. Then I have another bill for administrative expenses that I incur. Then, for good measure, I present you with another bill for having to look at your stupid face and listen to your whiny complaints! Of course, I was charging you for all that before but it all went under the heading of ‘rent’. Now I can charge what I like just by breaking it all down.

        So, how are you going to regulate all that? And bear in mind that we do not do regulation very well in this country.

        How do you propose to ‘get rid of amateur landlords’? Pay them off? Would not debt forgiveness be the cheapest and most effective way of doing that?

        • jaysus

          Well said Oscar, especially the ‘fracking’ of renters you mention at the end of your post. Could also be seen as a Ryanair rent calculation.

          Rent control is a great idea but implementation in scam happy Eire will be a challenge.

        • aidanxc

          “Stupid” was investing in property that was clearly priced way above its actual value. “Stupid” was basing your investment decisions on what other people thought and said. “Stupid” was (and still is) in investing in something that had been giving returns in excess of 10% and thinking it is going to continue doing that. (Here’s a little tip for you – anything that returns more than 3-4% per annum is going to have a correction, the higher the current return the higher the likelihood of a crash.)

          Regarding your long-winded argument about landlords looking for extra charges alongside rent – that can be regulated and policed also.

          You had better pray that someone like me doesn’t get into power. To steal a phrase from Pulp Fiction I would get medieval on landlords and the whole property fraternity – they are in the same class as Pablo Escobar except they are more stupid that him.

          And no, there should be no debt forgiveness. Will you give me back the €50 that I lost on a horse last week? No, I didn’t think so. You play the game, you take your losses.

        • EugeneN

          Its perfectly possible to legislate against these costs. The rent will be the rent. The renter pays for his utilities and thats it.

          You are quite the chancer. Forgiving the debt of landlords to help the renters. Are you for real?

    • EugeneN

      how could “unsustainable debt” or forgiving it help the rental classes? It keeps the buyers in their property and the renters outside. It will be a clear transfer of wealth from renters to rentiers ( I assume you want debt forgiveness for landlords).

      and thinking that there was no problem until the bailout of the banks is like saying there was no problem with the car until it crashed because of bad wiring or brakes.

      • The landlords that I have in mind are the “one-off landlords who were promised riches but are left with negative equity.” Presumably these are the same people as the ‘amateur landlords’ that aidanxc speaks of.

        Landlords, both big and small, are in the same game as anyone who is out there, trying to make a buck. They have to turn a profit on the enterprise or else, what is the point? The last time that I checked, property was being re-possessed in Ireland. So, landlords are charging high rents because that is what the banks are telling (forcing) them to do. But nobody seems to be interested in this aspect of the murky affair. It is a bit like Joan Burton, in her presentation to the Oireachtais Banking Enquiry. She says that Ireland’s economic crash was ‘entirely homegrown, homemade and that there is no question of there being any external factor’. Wow! When did she come up with that line of thinking? That time that she locked herself in her car and the Gardaí had to come and rescue her?

        In other words, after five years in government, she is still thinking like an opposition politician – blame Fianna Fáil, blame the property developers, don’t dwell too much on the role of the banks and assorted financiers because I still need them to bankroll my latest hair-brained scheme of buying an election using the voters’ own money!

        And the same Joan Burton, in setting out her electoral stall, is telling us that ‘there will be no return to boom-bust economics’. Does she have any idea how she is going to accomplish such a feat? If she does manage it, she will be the greatest political economist who ever lived. She will not only garner a Nobel Prize but the Nobel Prize itself will have to be retired, or re-named after her. But that, much like aidanxc fanciful dreaming, is not going to happen.

        • EugeneN

          Forced to demand high rents? Nonsense. The landlord class will demand it’s pound of flesh from renters if market prices go up. The fact that they are in negative equity has nothing to do with it. Negative equity doesn’t affect ability to pay. Rental income does and all landlords must be flush on that score. if not seize the houses.

          In fact what we should do, as well as rent control is seize all property from landlord’s who are in arrears, as being in arrears these days is a joke if rent has gone up so much.

          What you want is a massive transfer of wealth from the renters to rentiers. Then you want no rent controls so the landlord classes with their paid off “forgiven debt” can continue to demand rent from the tax paying renter — the guy paying for this, while getting effectively a free property from the State.

          I’ll ask again. Are you for real?

          ( the whine about Joan Burton is off topic so I am going to ignore De gubbmint made me do it nonsense).

          • Where did I say that I want ‘a massive transfer of wealth from renters to rentiers’? Where did I say I want ‘no rent control’? If you want to debate the issues, then listen/read what is being said and appraise yourself of what the issues are instead of going ‘off topic’.

          • DB4545


            That’s incorrect and let me explain why.The market dictates the price of rent. I explained on this site some time ago that I’m an accidental landlord. Myself and my brothers funded the conversion of our family home into two units and financed it with a mortgage.The house was too big for my mother and we wanted a decent tenant to keep an eye on her.

            At the height of the madness we we’re charging 300 Euro less per month than the market rent.We weren’t too pushed because the rent we were getting covered the mortgage and we didn’t want to be greedy as they were a young working family. This ran for three years and we effectively gave away 10800 Euro in rent.

            Then came lesson 101 for socialist landlords.The crash happened and it went tits up and suddenly the market rent was 200 Euro below our mortgage costs.Naturally the tenant wanted to pay the new going rate or she was moving out.At the time we had no choice so we took the hit which cost us 50 a month each.It could have been worse and it was for a lot of people.

            The lesson learned is we now charge the market rent because tenants respond to market conditions just as ruthlessly as some landlords do.

        • EugeneN

          This is a reply to Oscar’s comment up ->

          Clearly your first post was

          “Would debt forgiveness not fix the problems just as effectively, if not more so, than introducing rent controls? Everyone would be happy, including the free-marketers. ”

          So no, you want “debt forgiveness” not rental controls. And you have some crazy idea of economics where the newly debt free landlords will suddenly reduce their rents even though supply and demand will be exactly the same.

          The transfer of wealth is clear. Debt forgiveness is a free lunch. But no lunch is free, somebody — that is the taxpayer — pays for the landlord speculators who get their debt forgiven. That’s a free house. Paid for by taxpayers. Amongst whom are the renters. The renter is stuck paying high rents, and will pay for his rental enslavement with higher taxes to pay for the house he is renting. Thats a joke.

          • No EugeneN, again, you’re not getting it. My words were clearly phrased. I never said it was a case of either/or. The point I was making (and I make no apologies if it was not expressed in a pedantic enough fashion for your ears) is that rent controls will be largely pointless and easily flouted if they are not accompanied by measures to ease the burden on the “one-off landlords who were promised riches but are left with negative equity.” I think that you are being rather unfair in your characterisation of such people as some kind of ‘vultures’, out for their ‘pound of flesh’. I am quite sure that many of them are taxpayers, probably made good money during the boom years and thought that they were doing the wise thing by investing some of it in property. Certainly, that was the official narrative of the time.

            To take you up on your point about “seizing all property from landlord’s who are in arrears.” Once the property is seized, will the debt then be forgiven? Or will you then come after them for repayment of the debt too?

            “Negative equity doesn’t affect ability to pay” but it also doesn’t affect the debt burden. The debtor is still liable for the full amount he/she borrowed. Also, money tied up in property is tied up for years. What we have happening here is that people who borrowed, thinking that they were building a nest egg for their retirement, or maybe something to pass on to their children, instead find themselves saddled with an insurmountable burden. That is where I am coming from with the proposal for debt forgiveness. You could have a system whereby rent controls are introduced but also, the terms of the mortgage are re-arranged, so that the renter can have accommodation at a reasonable price and the landlord can also expect a return. Alternatively, the landlord could relinquish the property while the mortgage holder relinquishes the debt.

            That’s probably a lot for you to absorb so I will stop writing now! Take a deep breath before you attempt to respond.

        • locoloco

          Just to inject a different perspective to this conversation:
          I am a landlord. I am an “amateur” landlord. I only have one property.
          At a time when I didn’t know if the euro would stand or fall I inherited about 100k from my elderly (84yrs) dad. I decided the most responsible thing to do was to put it away for a rainy day – essentially when me and/or my missus need to be in nursing care (current rate from 800per week upwards), and I expect my own 4 kids will be busy struggling with life’s costs.

          So I have invested in a safe haven. I don’t look to up my rent – I let the property via the city council on a fixed 4-year deal, and they provide it to lower-income folks who can’t chase market rates.
          No bank owns me. There is rent control. My returns are very limited – I get about 6k a year (half goes on tax), giving me a return of about 3%.

          I’m in it for the long haul – 15 or 20 years. I don’t see why you think I should not be allowed to this in a free society.

          Debt forgiveness will always seems like an unfair proposition – especially as we seem to underwrite the banks, and they already are putting down millions in profits again.
          But a debt forgiveness that hit the lender (as well as the borrower), or one in which the state takes an equity share in the property (if it ever goes back above a specified value) seem to me a way to get people out of the hole.

          Do we just want to moan, or do we want to provide solutions. For people who borrowed to invest in property, I would clear the debt and take their property away from them. I’d put the bank into a non-recourse situation. The government would offer them the property, or it’s current value: take it or leave it. (I would leave the tenant in place – it’s their HOME.)

          I say bring on rent control.
          Bring on debt relief
          Bring on non-recourse mortgages.

          • An interesting insight. Thanks for sharing. I wonder if arrangements like these are being considered more widely. It sounds to me like there is potential.

  2. Oh, and before I forget … SUBSCRIBE!

  3. michaelcoughlan


    A very very good article. I was hoping you could elaborate how you feel supply could be increased to moderate rent and purchase price pressure.

    It plugs right in to your central thesis of balancing the rights of capital and the rights of labour.

    We desperately need to increase liquidity too by reducing the 20% deposit requirement on the second purchase of a house to 10% and introducing a use it or lose it (as you recommended before) tax which will replace this line of govt income to deter land hoarding and moderate land cost.



  4. aidanxc

    Very good article.

    Of course, if the government do bring in rent controls it’ll be some sort of bastardised, limited, loop-hole-full, political compromise that will attempt to please everybody but will please none.

    • Mike Lucey

      Ah! That may not be the case.

      Yes, the present government would opt for a ‘bastardised, limited, loop-hole-full, political compromise that will attempt to please everybody but will please none’ policy if forced to do something but we could be looking at a totally new government make-up in 2016. Hopefully it will be one that is willing to legislate for the vast ordinary majority and not the elite few.

      • The Observer

        When you strip out the vitriol that comment makes no sense. It certainly doesn’t address my point about the danger of ending up with upward only rent reviews in the private sector.

  5. EugeneN

    Just to plug some statistics in. The French expect ( and effectively legislated for) 400,000 houses per year. They know how many they need and build them. They also have rent controls.

    The free market UK produces 150K houses per year but has higher demand, and a similar population ( but higher future growth).

    • StephenKenny

      But is there any real doubt that the UK is passing rules & regulations to speed the return to the Regency, in terms of wealth and property?
      If I were a little more cynical, I would say that they are reorganising the state, legal, and immigration system to encourage entire families to live in one room, just so they can afford the rent.

    • Grzegorz Kolodziej

      “but higher future growth” – you mean supply growth or growth in prices, because as to the latter, most experts agree that as a city, London’s property market is the most overvalued in the world.

      It has higher demand, but in London most of that comes from foreign investors (cannot remember the exact figure off my head, but I think this is in the region of 80pc – I wonder what the figures in Dublin are).

      • Home Counties Girl

        Yep, totes agree with you G. Utter MADNESS!

        I have no idea what the foreign investment figures are in Dublin – if anyone has an idea then please do share :-) I was going through this infographic from the other day, I found some of the comments interesting. Have a snoop.

        • DB4545


          Interesting reading HCG. Looks like it could get messy My cousin’s wife answered a knock to the door about 18 months ago. An estate agent was offering £500K cash for their fairly cramped one bed in Notting Hill. The client? A Chinese businessman needed accommodation for his domestic staff. I hope you’ve cashed up and moved to somewhere nice in the Home Counties.

          • Home Counties Girl

            Gimme a break DB. I was born in the Home Counties, I have no desire to spend the rest of my life here (I’m far too young), besides I’m leaving the UK at the end of the year and the only thing I’ll miss is a strong £.

            The estate agent turning up on your cousins’ doorstep is quite a common occurrence.

          • Bamboo

            Such an offer is a typical (Chinese) approach to hike the market. A £500K cash offer can do wonders for the area.

          • DB4545


            London was kind to me so I’ve nothing but fond memories of the place.My daughter was born there and probably qualifies as a HCG.My cousin’s wife won’t be moving anywhere as she said “If adolf couldn’t shift her old mum she ain’t leaving the hill for a few poxy quid”.

          • Home Counties Girl


            I’m glad London was good to you. It’s a great city :-)

            If the southwest of Ireland had better transport links into Cork which I’ll be visiting at the end of the month, then I would move there in a heartbeat.

            *If any of you guys are heading to kilkenomics this week then why not periscope bits of the event, it would be great to catch a glimpse*

  6. The Observer

    Rent control linked to inflation implies upward-only rent reviews in the private sector ……. and look at the agony that has caused in retail/commercial. We are starting at a high point in home rental costs due to the shortage of houses/apartments. When supply eventually comes on stream will we end up with the problems experienced in retail/commercial lettings? If that happens the ordinary punter will find his/her rent to be materially above the then current market rent. But he/she will not be able to resort to examinership, as did many retailers, to get a correction. That will surely result in another round of weeping and gnashing of teeth about something that should have been foreseen.

  7. DB4545

    On the surface that seems like a very good idea David but that’s why it’s not. A house may be a home but it’s also a product that incurs considerable costs and risk.Ask any businessperson if they’re prepared to sell their product or service to you below the cost price for a sustained period of time and I’m certain you won’t be surprised if you’re told to f**k off.

    Why would anyone incur the capital costs,debt and tax liabilities to provide a home for someone else unless they thought it would be to their benefit? Maybe just ask your local publican, plumber or doctor to provide their services free of charge and let me know how you get on?

    Rent controls can’t work in a free market economy where the State has largely abandoned social housing.France can legislate for all the homes it wants but that’s not exactly paradise if your home is in a banlieu outside Paris or Marseilles.

    • EugeneN

      Rent controls work in most of Europe, so that is empirically wrong.

      • DB4545

        Just because they’re in place doesn’t mean they work.Check out how many Berliners rent on airbnb rather than the rent controlled sector because rental yield is a multiple of that sector. If you’re an empiricist I’d like to see your empirical evidence to the contrary.

        • EugeneN

          They work. Look at David’s graphs. Rent stays stable. Housing is still built. The French have more house ownership than the UK now, much higher house building, rent controls and no boom and bust.

          • DB4545

            They don’t work in our fiscal,regulatory, planning and political environment.Graphs can be skewed to project anything they are required to project to provide a convincing argument. They don’t work in Berlin if you check or use airbnb as I have and do. I’m certain the graphs that the banks used for projected “future growth” looked terrific up to 2007. Just as good as the graphs use by politicians projecting a soft landing. A turkey could make a lovely graph of his progressive feeding programme..right up until Christmas eve.


    “”Peak rents
    The index shows that, nationally, rents peaked in the fourth quarter of 2007 before declining by 26 per cent to their lowest point, which was recorded in the first quarter of 2012. By the end of last year, rents nationally were 17.8 per cent lower than their peak.
    While the peak-to-trough in the Dublin market was similar to that experienced nationally, the strength of the recovery in Dublin means that rents are just 9 per cent lower than their highest point.”"

    This suggests that current rents are still below all time highs. Where was the wailing and gnashing of teeth in 2008 as rents were dropping reflecting market forces.
    I remember people with rental properties both residential and commercial having to deal with tenants who could not pay, or would not pay, who trashed the premises and who received no redress from the courts. Then were left with a significant reduction in market rents plus a bill to repair the premises and court costs to remove the tenant.

    Rent controls do not lead to stable markets but add to the complexity and the need to introduce more and more rules and regulation.

    • EugeneN

      Why would society care if rents fall? Thats a cost to a minority of investors who have been treated with kid gloves. See the few re-possessions since the crisis.

      The cost of rents going up is a cost to the taxpayers in those rental houses who’re paying for the banks who don’t repossess landlords in arrears. They may be paying that extra tax as well as rent to a landlord who is deliberately withholding his mortgage payments. In short the landlord gets a house for free, can refuse payment and not lose that house, but the renter gets kicked out.

      However most of the problems you have with rental control will go away if its introduced as upwards only. However it needs to start at below the present market rent.

      • The point made is that rents have not gone up since 2007. In fact are an average 10% lower according to the times article.
        That is a reprieve for 8 years for tenants.

        All government stats are manipulated so what to use as a standard is a problem if you advocate rent controls. for example the cost of living index does not reflect reality. likely as not any rent control will not be based on reality but somebodies fudged figures.

        We have talked about rent controls before and I pointed out the BC experience. Started in 1973 the result has been a steady increase in rents with periods of non increase.

        Vancouver is one of the most expensive places to live in the world. Probably most places have rent controls. They are more of a sop to the masses than an effective way to moderate the cost of housing.

        In Victoria the prices of housing are so high that rental suites are encouraged in the so called single family zoned areas. The rental income of the suite is added to the owners income (or buyer) and used to help qualify the person for the mortgage. It is the only way to afford a property these days.

        Rent controls have done nothing to alleviate the cost of housing. If controls are stringent enough to fix the rent as static with no increases then there will be a disintegration of the existing housing and no new housing built without subsidy supplied by the tax payer.

        Rent controls have been activated for millennia but never achieve the suggested or desired results.

        • StephenKenny

          “Rent controls have been activated for millennia but never achieve the suggested or desired results.”
          I’m not sure that’s really correct. They’ve been used widely in societies who cannot really afford a large mercantile class, or where one tends to get out of hand leading to social disorder.
          Ancient Rome not only had rent controls, it also had bread price controls.
          If there isn’t a free market in property, with strong anti-trust enforcement, so house building is easy and the utility of land is linked to the state’s view of minimum space, population etc, then rent controls will become necessary.
          Without them, those on the receiving end of ever increasing rents will eventually vote for a government which has some much stronger ideas.

          • So ancient Rome had everything wrong as do we.

            There is nothing we have tried in the form of wage and price controls,that includes the devaluation of money to the setting of mandatory food pricing, that has not been tried and failed before.

            “”then he set himself to regulate the prices of all vendible things. There was much blood shed upon very slight and trifling accounts; and the people brought provisions no more to markets, since they could not get a reasonable price for them and this increased the dearth so much, that at last after many had died by it, the law itself was set aside.[17]”


            ([This article is excerpted from the book Forty Centuries of Wage and Price Controls: How Not to Fight Inflation, chapter 2: "The Roman Republic and Empire."] )

            If you have an example of price and wage controls that do anything other than a temporary fix, I would like to read about it.

            At this point I stand behind the statement,
            “Rent controls have been activated for millennia but never achieve the suggested or desired results.”

            To the contrary, they have always resulted in shortages and economic dislocations. In the Roman case you cite, death was the penalty in all cases of disregard of the controls and yet even this was ignored and especially in the case of food. As you know, people have to eat!!!

            The linked article is well worth the read.

            However I return to the ultimate theme. Current rents are being driven by inflation. Inflation is the expansion of the money supply. Just like the romans the money in the form of all currencies is being rapidly devalued. The measuring stick of this inflation (how many ounces of gold it takes to buy the object at hand) is under attack as it exposes this policy and the results to public scrutiny.

            Central bankers are the cause of all this but at the behest of and contrivance with government. Central bankers and the politicians must be brought to heal by the people or we suffer the same fate as the Romans. They, because of the pressures brought to them because of all the regulation and controls, longed to be taken over by the “barbarians”.

            To have esteemed economists advocating rent controls, and being supported by the masses, shows us how much we have learned in the past 4000 years. Absolutely nothing.

          • StephenKenny

            Just as the French have had a legal requirement not only to have a baguette (of a minimum defined weight) at a fixed price for over 200 years, but they’ve also had a requirement for a minimum number of bread sellers to be open at all times, because, as you say, people have to eat.
            Rome had a maximum prices for a defined bread (you could no doubt buy all sorts of others, at all sorts of other prices) because, as you say, people have to eat.

            In both cases, the problem was that the system had got out of wack, and the laws of supply and demand no longer worked – i.e. there was not a free market.

            It worked for hundreds of years in Rome too. Not all food, just bread. But then Roman legions lived, essentially, on little more than bread and olive oil.

            So you either fix the system, or you fix the price of the essentials of every day life – some foods, fresh water, a roof.

            For contrarians like me, this is actually a “good” sign, as it indicates that all the malinvestment and anti-free market interventions that have been going on for many years, are starting to surface in normal life. Ager all, with all market indicators being so distorted by relentless interventions, we need to look for other indicators. A possible need for rent controls is one such.

            It won’t really change until people start to be directly affected.

          • “In both cases, the problem was that the system had got out of wack, and the laws of supply and demand no longer worked – i.e. there was not a free market.”

            But why?

            This question is neither asked nor answered.

            According to everything I have read including the attached insert above the basic cause of the maladjustment on the economic structure is the overspending by government followed quickly by the destruction of the money system which results in inflation of the currency and artificial level of supply of money and interest rates. This is where the trouble begins.

            Adding more interference improves nothing and only exacerbates the problems. It is this ever escalating meddling that destroys the efficient markets pricing mechanism and along with that the efficient supply of goods and services to meet the demand: To meet the demand at the lowest possible prices too.

            According to the Roman historians it was not just bread that was fixed in price but ”then he set himself to regulate the prices of all vendible things”.

          • Pat Flannery

            “So you either fix the system, or you fix the price of the essentials …”

            Exactly Stephen.

          • Except , Pat , it is a short term fix that leads to even greater problems.

            Fix the system. Cure the disease. Stop band-aiding the symptoms or the patient dies anyway.

          • Pat Flannery

            Tony, I agree with David on this one.

            He says “the cost of the massive housing market failure is being shouldered by renters”. Note that he describes the present situation as “market failure”.

            What do you do when something fails and the burden falls unfairly on an innocent party? You apply immediate relief to the injured person or persons. That person needs help now. Hopefully the cause will be fixed by those responsible for its failure.

            Would you refuse help to a person injured by a car with faulty breaks or faulty steering? It is no good blaming the manufacturer while a person is dying on the street.

            Irish renters are dying (economically) right before our eyes. They need an economic band-aid until the government ambulance arrives – if it ever does.

          • I agree with your sentiments. A single car crash is easily dealt with. A systemic problem results in a general recall.

            One of the problems of the housing market is a restriction on the space available, the land base, what it can be used for.

            Ease the zoning restrictions. Allow high rises in the city where people are employed. Allow residential use anywhere there is a space. Even agricultral land. Britain has had a policy for years to allow the development of farm buildings, not being used,

          • cont..
            for farming . Mini hamlets dot the countryside.
            When I went in to Swords, Fingal municipal offices to enquire it was made plain to me that unless I was related to an owner or had already lived in the neighbourhood 15 -20 years I could not buy a property and build a house. I was restricted to property already granted residential rights and so would have to pay 200,000 for a plot of land plus cost of acreage. Immediately I was priced out of the market.

            It is crucial to reduce the price of land by opening up the supply. This restriction is as a result of regulation.

            This problem is multi faceted but not solved by piling one regulation upon another.

          • StephenKenny

            “This problem is multi faceted but not solved by piling one regulation upon another.”
            Quite agree. The suggestion is not ‘piling one upon another”, it’s sticking plasters on lesions as they appear, in an attempt to save the body, until the family/hospital/church finally agree to surgery.

          • Simply put , Stephen.

            All rent controls affect the market in negative fashion. Rents become either more expensive or the supply constricts or both at the same time.

            It harms those it is supposed to help just like most “progressive” legislation does in the longer term.

            Out legislation in BC forced landlords to raise rents annually even when they did not need to. Despite the good intentions rents in Victoria are higher, and higher and the vacancy rate is an unhealthy 1.6%

            Rent controls do not work. Any suggestion they do is fantasy based on dreamy perceptions not reality.

          • StephenKenny

            If there is a prevalent fantasy at the moment, it is that there are free markets operating in any popular investment sector, and property is a popular investment sector.
            Continual interventions have caused distortions, and, unless they are allowed to sort themselves out, these sorts f’patches’ will become more and more necessary.

            We’ve got the same problem in the pensions sector: Governments are trying to force people to hand over their money to pension funds (saving for the future), while at the same time trying to force them to empty their savings accounts (to increase aggregate demand). Property, and rents, are just part of an overall broken system.

          • Grzegorz Kolodziej

            Tony, Stephen,

            Regarding ancient Rome

            Some time I ago I covered extensively (it’s hard for me to track it now as I have only a few minutes) how Roman caesars caused hyperinflation in the last centuries of the Roman Republic, trying to please the crowds (to no avail – Rome went bankrupt morally and economically anyway).

            Combined with that were catastrophic changes in their political system

  9. Pat Flannery

    David: it may be that I am getting used to you but I thoroughly enjoyed this particular article. I would not change a word except perhaps add to your housing “breakdown” under the heading “banks” the whole sordid business of debt trading, euphemistically called “securitization”.

    I was visiting an old friend in Limerick over the weekend. We walked and talked our way around the old city. We stood outside what remains of the old Exchange on Nicholas Street, where the expression “paying on the nail” is claimed to have originated. Whether that is true or not the important thing to remember about the Limerick Exchange, indeed all exchanges, is that they traded debt for cash. A paper document securing a future payment was called a “security”. It still is.

    That activity was a large part of the recent Irish housing “breakdown” you describe so well. It should not be confused with “banking”.

    The problem is that the Irish banks are still allowed to sell security instruments called mortgages and to describe that activity as banking. It is no more banking than running a staff coffee shop on their premises. Securitization is an “exchange” activity. It is not “banking”.
    In addition to rent control legislation we need legislation to protect the Irish public from Irish “exchangers” masquerading as Irish “banks”.

  10. michaelcoughlan

    Just for you adam bitcoin debit card;

  11. Some things have improved over the last 100 years.

    Copied from

    Very Interesting Statistics

    THE YEAR IS 1915

    This will boggle your mind!

    The year is 1915 “One hundred years ago ”

    What a difference a century makes!

    Here are some statistics for the Year 1915:

    The average life expectancy for men was 47 years.
    Fuel for cars was sold in drug stores only.
    Only 14 percent of the homes had a bathtub.
    Only 8 percent of the homes had a telephone.

    The maximum speed limit in most cities was 10 mph.
    The tallest structure in the world was the Eiffel Tower.

    The average US wage in 1910 was 22 cents per hour.
    The average US worker made between $200 and $400 per year …

    A competent accountant could expect to earn $2000 per year.
    A dentist $2,500 per year.
    A veterinarian between $1,500 and $4,000 per year.
    And, a mechanical engineer about $5,000 per year.

    More than 95 percent of all births took place at home

    Ninety percent of all Doctors had NO COLLEGE EDUCATION!
    Instead, they attended so-called medical schools, many of which were condemned in the press AND the government as “substandard.”

    Sugar cost four cents a pound.
    Eggs were fourteen cents a dozen.
    Coffee was fifteen cents a pound.

    Most women only washed their hair once a month,
    And, used Borax or egg yolks for shampoo.

    Canada passed a law that prohibited poor people from entering into their country for any reason.

    The Five leading causes of death were:

    1. Pneumonia and influenza
    2. Tuberculosis
    3. Diarrhea
    4. Heart disease
    5. Stroke

    The American flag had 45 stars …

    The population of Las Vegas, Nevada was only 30.

    Crossword puzzles, canned beer, and iced tea hadn’t been invented yet.

    There was neither a Mother’s Day nor a Father’s Day.

    Two out of every 10 adults couldn’t read or write

    And, only 6 percent of all Americans had graduated from high school.

    Marijuana, heroin, and morphine were all available over the counter at local corner drugstores.

    Back then pharmacists said, “Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach, bowels, and is, in fact, a perfect guardian of health!” (Shocking?)

    Eighteen percent of households had at least one full-time servant or domestic help…

    There were about 230 reported™ murders in the ENTIRE U.S.A.!

    I am now going to forward this to someone else without typing it myself.
    From there, it will be sent to others all over the WORLD all in a matter of seconds!

    It is impossible to imagine what it may be like in another 100 years

    • michaelcoughlan

      what was gold per oz in US dollars?

      • This an opinion on the state of the DOW market. Note what is felt about the effect of interference in the market.

        Similar things happen in other markets too, including the rental market.

        “”Know this: that advance from 2011 to 2015 is unlike any chart I have ever seen; it is bizarre; it is contrived; it is completely synthetic and it is criminal. Traders around the world have been Pavlovian-ized into feeling great safety in buying every dip on the assumption that some “invisible hand” will save them from loss and from what we witnessed in October, the love affair with the “BTFD” strategy rages on complete with cards and flowers and boxes of chocolates. That’s what interventions do.”" ——–Michael Ballanger

    • Grzegorz Kolodziej


      very, very quickly on “Here are some statistics for the Year 1915″:

      1. All major inventions apart from laser, internet and something else I forgot being in rush to answer you come from 19th, not 20th century
      2. It tool less than a year and two months to build the Empire State Building – from the beginning of the construction to cutting the ribbon – and the traffic was NOT stopped. It’s been taking a second decade to link one Luas line to another.
      3. That’s a Polish example as I do not know what it was like in Ireland: a level of maths on A-level exams before WWII was so high that today’s 1st year math students would really struggle with it; as far as I remember reading you had 14 subjects, among them, compulsory Latin, Greek and logic (one of the greatest logicians in the world, Jan Lukasiewicz, emigrated to Ireland after WWII, but sadly he had little or no influence on the Irish curriculum even though he was a Trinity Professor).
      4. Westerners have lost an average of 14 IQ points since the Victoria Era (says Jan te Nijenhuis, a psychology professor at the University of Amsterdam)
      5. The manners of people nowadays are atrocious. They shout rather talk, they smack their lips while eating and they do not respect my private space or the fact I am reading, choosing to always sit beside on buses and trains and assault my senses with their jejune conversations, even with all other seat free. The vast majority of kids have AD/HD and would fall victims to psychotherapists in the future.
      Their conversations sound like monologues.

      As Nicolás Gómez Dávila has said, “The intelligent man quickly reaches reactionary conclusions. Today, however, the universal consensus of fools turns him into a coward. When they interrogate him in public, he denies being a Galilean.”

      6. Visual arts nowadays? Gimme a break:
      “One day the last portrait of Rembrandt and the last bar of Mozart will have ceased to be — though possibly a colored canvas and a sheet of notes will remain — because the last eye and the last ear accessible to their message will have gone.”
      ? Oswald Spengler, The Decline of the West, Vol 1: Form and Actuality

      7. All that is kinky in sex was invented up to 19th century, but it did not replace the readings of Plato or Adam Smith.
      To quote my favourite philosopher, Ludwig Wittgenstein
      “Freud ‘s fanciful pseudo-explanations (precisely because they are brilliant) perform a disservice. (Now any ass has these pictures available to use in “explaining” symptoms of an illness”

      8. Modern liturgy sucks,
      9. And so does modern Coca-Cola, beer, bread, and virtually all food (did you ever try the Victorian remake of Coke?)
      10. Where is the modern Oscar Wilde? I do not see any…

  12. mike flannelly

    Rental Metrics
    David and Morgan Kelly are attributed with trying to shout STOP to the “confidence trick” that was GROSSLY OVERVALUED DEBT as a driver of FALSE UNSUSTAINABLE PROPERTY PRICES. They did not artistically pluck their concerns out of their arses but based them on mathematical equations and unrealistic Loan to Income/Rent ratios.
    As a 51yr old I can honestly say that it was mathematical equations of grossly overvalued debt that destroyed the financial lives and mental health of some of my friends and peers.
    Peter Nyberg said that it was NOT BELIEVABLE that Intelligent Professional Bankers did not know what they were doing.

    The standard bank metrics for rental property is that monthly rent should be
    130% of the mortgage payments and stress tested at 2% above the variable rate. Basically a property with 1000euro rent should have a mortgage of no more than 770euro.
    A rough rule of thumb for valuing the same property mortgage was always ten times the annual rent or 120 months rent.
    There is also the ” one percent rule” which is 100 months rent.

    The man in charge of land banks and development loans with our proudest pillar bank from 2006 to 2009 had to write down land banks by 90%, apartments by 65% and houses by 55%. Under the FG/Lab government this man now has the top job with our proudest pillar bank.
    I know.
    You couldnt dream it up.

    450,000euro terraced houses fell to 220,000euro.
    360,000euro apts fell to 120,000euro.

    The simple mathematical equations and rough rules of thumb were not that far out.

    • DB4545

      This was the same political climate that allowed developers to persuade first time buyers that Mullingar had become a suburb of Dublin. And a banking climate which advanced mortgages based on that fantasy. Do you think those mortgages would have been given on a non-recourse basis? I see plenty of comments above about amateurs. Credit Unions were run in an amateur way and cost taxpayers 20 million. The Banks however were run by professionals (amateurs couldn’t engineer such destruction) and have cost taxpayers billions. The evidence suggests that amateurs are more cost effective for the taxpayers.
      Are people that deluded that they think Government intervention will cost less? In Ireland with all we’ve seen to date? This from the people who gave you Ballymun? With all the social and economic destruction that it cost to generations of people in this Country?

      Rent controls just don’t work, unless you’re in an election year and you’re desperate for ideas to placate the gobshites living in urban areas when you turn up on the doorsteps looking for their votes. Maybe promise the rural gobshites that Garda armed response units will turn up on their doorsteps in Audi Q7′s or 5 series beamers if the alarm goes off. Or arrange to extradite a banker with all the resulting publicity just as you’re gearing up for an election campaign but eight years after the event. World War 2 only took six years. And for good measure in order to convince the doubters that you’ve been working hard for them tell them it could be a lot worse. Tell them the army could have been guarding the ATMs.

      Rent controls, in an election year, what a complete crock of s**t. Just might work though, just like a lottery ticket, right up until the draw or after polling day.

  13. Rent control seems to be the hardest concept for the centre right parties ruling this country to accept. It should have been introduce back in the 1970′s when housing was already a big problem. When will we ever learn. Greed trumps everything in this country.

  14. mike flannelly

    In New York you have to prove to a landlord that your gross salary is 40 times a months rent.
    This means that a couple having a gross income of 80,000 $ have a max capacity to pay rent of 2,000 $ mth.
    With this rule a couple in Dublin earning 80,000 euro gross could have to pay up to 2,000 euro for a house.

    There are houses in Dublin for 300,000 euro that would cost the same couple 1,384 euro mth if we could get the 25 yr fixed mortgages @2.75% like France and Germany.

    I have asked David more than once for his contribution on Loan to Income metrics for a starter home mortgage.
    No contribution.
    I am now asking for his contribution for loan to rent metrics.
    Perhaps the deposit for investment property should be 50% in order to have realistic loan to rent metrics.

    What recommended percentage of a single average earners 2,000net monthly income would be fair rent?

    What recommended percentage of an average earning couples 4,000net monthly income would be fair rent?

    If a tennant that has no money recks your property you have no financial comeback because there is no logic in bringing them to court. Landlords are avoiding low income tennants because of the financial anxiety of possible future losses.
    The PRTB has gained a reputation of bias in favor of the tennant which can prove very costly for a landlord.
    Soon there will be no private rental accomodation avaliable for low income tennants if this persists.
    Private landlords that paid 360,000euro for apartments with 1,000euro mth rents are refusing to take further losses and anxiety.
    It was the Irish state that refused to allow interest only repayments for grossly overvalued investment mortgages that had ZERO investment value from day one.It is my understanding that the Ombudsman described restructures of grossly overvalued debt as “ongoing forbearance and forcing banks to be joint investors”.
    People seeking restructures were told by the central bank and failed bankers to go to the ombudsman who said that same grossly overvalued debt is a commercial arrangement. The financial ombudsman did not want to know about the MAJOR financial problems of financial products.

    Best Little country in the world to give you financial anxiety.

    • DB4545

      Could anyone offer a translation please? I’m sure it’s interesting.

      • Victor Meldrew

        It’s not really

      • Grzegorz Kolodziej


        “Could anyone offer a translation please?”

        I am doing it with a sandwich in one hand, but…

        Blog David McWilliams – Ireland. Rents in Dublin have gone up by 35 percent since 2011, and last year alone they have increased by ten percent. The Irish rental market is out of control, writes the economist David McWilliams on his blog and he calls for rent controls (lit. Mietpreisbremse – “rental prices brake”): – and then they go on to repeat David’a article: “International evidence shows that it also works in many normal countries and doesn’t lead to a massive fall off in building. It may also help move the Irish rental/housing market towards a more consistent footing. In order to placate landlords, rents could be set so that a minimum yield and max yield to the landlord is taken into consideration, as well as the average of rent for the past four years in order to protect tenants. There are lots of ways to go about it. No one needs to be dogmatic. One thing is clear: the present system in Ireland isn’t working.”

        My comment on that is down below, but I know one thing – my friend had returned to his native Germany 2 years ago and he has been paying less for a 80m nice flat in Berlin than we would for Dickensian a room in Dublin – and to cap it all, there is virtually no good or service in Berlin which would not be cheaper. When Ireland was in a bubble, the money he was getting in Ireland would have been better than in Germany (he also was of an opinion that the Irish are more friendly – and he is an intravert so it was not purely economic migration), even with the cost of living – but not now (but not everyone has his skills – he is an accomplished organ builder and designer).

        (digression: Coldblow – I think extravert it the only correct spelling because of its etymology (in Polish it is ekstrawertyk too, not extrowertyk), namely

        “extra”, meaning (in Maedieval Latin) and being the old feminine ablative singular of “exterus” (outward, outside) and in classical Latin recorded only in “extraordinarius”)and

        2) past participle “vertere” – to turn, convert, transform, translate, be changed – in old English “weorðan”, in Old Church Slavonic “vr?teti” – to turn, in Welsh gwerthyd, and eveb in Sanskrit “vartate” – turn round);

        extrovert is a post-1918 loanword from Jung – and as Nicolás Gómez Dávila has said, “I distrust every idea that doesn’t seem obsolete and grotesque to my contemporaries.” – and besides, Jung was not only pro-Nazi, but he also devoted entire pages to considerations of flying saucers).

        A propos Germany, I suppose my chances of another invitation from a German Embassy in Dublin to watch the Champions League Finals with them and enjoy their delicious free beer and food (as a Lewandowski fan I even collected Bayern Munich shticker ;-) are for me probably now as low as FED’s interest rates since I started commenting on that blog :-( – so I’d better not comment on President Higgins (and there would be lot to say).

        Well, ehrlich währt am längsten – dear German Embassy in Dublin. Hmm, yummy, yummy German sausages :-)

        • coldblow

          I agree that extravert is the way to spell it. The ‘o’ spelling is more common, at least on this side of the Atlantic, but the English translation of Jung’s Psychological Types spells it with an ‘a’ and he invented the term (afaik). I looked up this work a couple of months ago (the most important chapter is online) just to see what the man himself had to say. To be honest I wasn’t expecting much as nobody (except Rowe) seems to get it, but I was taken aback by his insights.

          Everyone has him down as an introvert himself (in contrast to his old colleague Freud) but I am sure he was an extravert too. The clincher was an interview he gave to a British journalist in the last years of his life (it’s been taken off YouTube). One of the commenters said that she had warmed to him for one or two of the humorous things he said, not having expected this from him. This was strong evidence of extraversion in both him and her. This is the strange world I have been living in for the last seven years.

          I am sure the Irish Times would spell it extrovert, which is a good reason for me not to. Another thing they have done is to impose the ‘isation’ ending on words which were originally spelt with a ‘z’. (Yes, and they’d probably spell ‘spelt’ as ‘spelled’ – you can see why civil servants love the paper.)

        • DB4545

          Thanks Grzegorz

  15. [...] Blog David McWilliams – Irland. Die Mieten in Dublin sind seit 2011 um 35 Prozent, und allein im vergangenen Jahr um zehn Prozent, gestiegen. Der irische Mietwohnungsmarkt ist außer Kontrolle, schreibt der Ökonom David McWilliams auf seinem Blog und fordert eine Mietpreisbremse: “Der internationale Vergleich zeigt, dass sie in vielen normalen Ländern funktioniert und nicht zu einem Rückgang von Wohnungsneubauten führt. Sie würde möglicherweise helfen, dem irischen Miet- und Immobilienmarkt eine stabile Basis zu geben. Um Wohnungsbesitzer zu besänftigen, könnte ein Mindestertrag und eine maximale Rendite für die Miete berücksichtigt werden. Um die Mieter zu schützen, könnte wiederum der durchschnittliche Mietpreis der letzten vier Jahre als Maßstab gelten. Es gibt viele Wege, das Thema anzugehen. Man muss das nicht dogmatisch regeln. Aber eines ist klar: das aktuelle System in Irland funktioniert nicht.” (02.11.2015) +++ [...]

  16. DarraghD

    Hi all,

    I watched David on Claire Byrne Live last night, a great overview as we would always expect, but I feel his assessment as to why house prices will rise as demand is brought on stream, is simply wrong.

    I live in Dundrum, by any standard, a fairly affluent part of what makes up the Dublin suburbia. I live approximately one minute walking distance away from the Dundrum Shopping Centre. If you want to see why property prices are rising, and why the pressure on rental accommodation is in the up direction, (and also why our education and health systems cannot cope with demand), I challenge anyone on this forum to get a Luas to Dundrum and take a walk around Tesco in Dundrum any evening after work, or take a walk through the Dundrum Centre Food Mall, where you can find Milano’s, Eddie Rockets, and a host of other diners and restaurants.

    The first thing that will become very apparent, is the sheer size of the non Irish community that you will be walking through. You’ll find the Irish are actually in a minority, you’ll see Muslims (Saudi’s), Africans, Asians, Indians, Pakistani’s, people who are obviously not from the EU and on that basis, have no automatic right to free movement within the EU. We know that we signed up to free movement of people and goods within the EU, as per respective EU treaties going back to the 90′s.

    The reason I believe we have housing crisis, a health crisis, and an education crisis, is because I believe is because more people are coming into this country than we can actually cater for, a walk around any Dublin suburb will confirm this.

    This is not a racist rant, I do however believe that as a tiny EU country, we have made a major mistake in abandoning anything that even remotely resembles an attempt at formulating and enforcing a policy of inward migration into this country, and this is now manifesting itself in the form of a housing crisis, a worsening health crisis and a crisis in education.

    Today we are seeing that in the fishing industry, illegal workers are being exploited in that industry, I have an insight into the transport industry and the motor industry and I can tell you the exact same thing is happening there on a massive scale only in a slightly different way. In the motor industry, you have migrants coming here, starting up small businesses in the black market and are pulling down the price and margin on everything from car parts, auto repairs, body repairs, valeting services, car washes, absolutely everything.

    Where are Revenue in the middle of all of this? Same place they have been when it comes to the fishing industry, asleep at the wheel.

    I feel it is unfortunate that as a country, we are afraid to discuss this and instead of discussing what it obvious, we are using pseudo psychological language as David did last night, saying that there is just something funny going on with the Irish pysche, so that when house prices are rising, we all stop selling and more people want to buy. To say or to pretend that the number of people coming into this country at the moment from practically anywhere, is somehow not a factor in the housing crisis, I feel is to be blind to all reality.

    • Fair comment that applies around the world too. Vancouver is boosted by Chinese off shore buyers paying more than locals can afford producing a ripple effect across the province.

      Unlimited money production, the so called QE is showing up in real estate pricing as well as financial markets.

      The root cause is the Central banking fiat money system. Now you see what induced inflation does to society. Destroys it. Welcome to the causes of the Decline of the Roman Empire, Part II.

    • DB4545


      I don’t really have a problem with people coming to work here and contributing providing they operate on the same playing field as locals. If they’re skilled and educated and working the Irish economy is getting those benefits and Irish taxpayers didn’t have to pay for that education or those skills. In the past we’ve normally operated in reverse in that department. However I do have a problem with people arriving here and somehow accessing housing benefit and welfare. Then using those benefits to outbid locals in the rental market offering cash top-ups or underbidding locals in the jobs market using welfare as a subsidy.

      I’m at a loss to understand who exactly is minding the Irish taxpayers cash register. The fishing industry? It’s been discussed at length before on this site. We don’t have to look any further than another little Island in the north atlantic. Look at how taking control of the resources in it’s territorial waters and using those resources for the benefit of its people has contributed to the economy of Iceland.

      On a completely separate note I think somebody missed a trick locating Dundrum shopping centre next to the mountains. If it was bolted on to the Airport we could make a go of making Dublin a Dubai/Singapore in northern Europe. I think with a little tweaking Dublin is well located to be a major hub into Europe for long haul and a hub in Europe to access the low cost carriers.

      That’s a project that has the potential to generate huge benefits for our children. Forget about 1916 let’s reboot and head for Ireland 2.0 the new generation.

      • coldblow


        I ‘don’t have a problem’ with it either, as it has little impact on me personally and I won’t be around that much longer for the effects to be felt.

        I would not give preference to skilled and educated immigrants over the others as the whole reasoning given for their admission is that they are fleeing persecution. The educated and skilled are required by their native countries. I realize that the gap between this official reason and the reality is enormous. All you have to do is turn up at the airport with a suitable story and even in the days of budget travel the starving huddled war-torn masses are unlikely to figure. In any case, what are we to do with our own educational failures?

        What exactly is Ireland 2.0 the new generation? Is it a Star Trek film? Adam used this phrase a few weeks ago in the sense of tearing everything down and starting again. (I use the word ‘sense’ loosely here.)

        • DB4545


          What it’s intended to express is that we need to stop looking at the past or at least if we do then try to learn from it and stop making the same f**king mistakes. Why not be selective? Where’s the sense in allowing the unskilled and uneducated to immigrate when we’re more than capable of producing that particular demographic ourselves?

        • Grzegorz Kolodziej

          “The educated and skilled are required by their native countries.”
          Provided those countries did not close their job markets to outsiders and there is circulation of elites in them in Pareto sense (Poland is a good example with over 300 occupations not open to all participants – so that, i.e., you cannot become a lawyer if you are not a son of a lawyers, etc – but 50s Ireland is another example – one son would inherit the land or become a civil servant and there rest would emigrate, being wisely given names Mary and John – my friends sister is called Siobhán and her name was once spelled Sindbad in a letter).

          As to earlier comment by Darragh, “we are afraid to discuss this and instead of discussing what it obvious” – me and other commentators have discussed the immigration and refugees topic so much for the last months that fort the time being I suffer from immigration discussion glut and this will be my last comment on that topic for a while.

          After all, if everything that could have been said has been said, then repeating it will not make it more convincing.

          Besides, I am not afraid of discussing anything or challenging anyone either here or in public.

          During the RTE presidential debate I have publicly challenged Gay Mitchell as to why he had voted to hide his expenses as a MEP and I grilled Pat Cox about his murky lobbying company.
          They both withdrew shortly afterwards.

          “The reason I believe we have housing crisis, a health crisis, and an education crisis, is because I believe is because more people are coming into this country than we can actually cater for, a walk around any Dublin suburb will confirm this.”

          I partly disagree. This was certainly a factor during the boom time, but it does not explain why, i.e., we see rents rising in a situation where 2/3 of Poles who came to Ireland after 2004 left Ireland (the total number is 113,000 compared to well over 350,000 during the boom).

          Of course, this is also a significant factor, but less significant since the recession. The main factor is rigging the market by limiting supply and by low interest rates (which in fact have more detrimental effect on investing in new house than rent controls would).

          To be honest, unless something dramatic happens with the dollar or words to that effect, I see the future of the housing market in Dublin bleak (and very rosy for some). The main reason I did not take a mortgage over a decade ago when I could was because I have done an evaluation of the price of the house/annual rental income and while this was 12-15 in the property obsessed US, it was withing the region of 30-40 in Ireland.

          Make not mistake, there is some part of population (10pc?) who benefit from that situation and they welcome policies limiting supply or new wave of homelessness in Dublin.

          The sad thing is that these people have most clout in local councils and most people prefer not go against them. They are also employers and they influence main parties policies. It is to them that RTE news announcers talk in a titillating voice that good news are coming from the housing market – property prices went up by quadrillion and more people are homeless, which is good for us landlords.

          This is actually amazing when you think about it. We argue here about things like central banking, rent controls, gold standard or fishing industry.

          Most of the so called economic commentators in the media neither care not are aware of any of that.

          They are not ashamed to skip all things such as China dumping US bonds, Nordstream 2 and its influence on energy prices or QE and they just read those figures regarding property prices and basically make “what’s good for me, the news presenter” the economic news.

          I probably sound slightly vexed, but I feel that unless we do away with the media monopoly (or at least let fresh, young – they have to be young because news readers older than 50 are the beneficiaries of the rigged property market), no major change in this country will be possible.

        • Grzegorz Kolodziej

          I should have explained what I meant by the circulation of elites in Pareto’s sense:

          • That is a long read Grzegorz. Basically saying that the longer a government stays in power the less able it is to react. Attitudes are entrenched and not responsive to changing circumstances.
            So the electorates cry “It is time for a change”, has some validity.

            I am familiar with the 80/20 rule or Pareto’s Principle. I used it to great effect in the past, in my sales career!!

    • Home Counties Girl

      Hey D, I worked in Dundrum for a few months when I first moved to Dublin in 2007 and it certainly didn’t remind me of Brick Lane. However, I am inclined to agree that there is a problem with Irelands fishing industry:

      I want to refrain from plastering comments here. But, on this occasion I would like to share that from my experience working with the ‘foreigners’ both in Dublin and Cork most of them didn’t really enjoy their time in Ireland, in fact on Fridays they would fly out to different cities in Europe to engage‘in more modern societies’as one of my dear friends put it.

      A final thought, a lot of the banter here bounces around exiting the EU. Sure, leave the EU at your peril (I’m in the NO camp), but then don’t forget you’ll have to do commerce with the ‘foreigners’ at some stage.

    • coldblow


      Firstly, you are not allowed to say things like that.

      Secondly, I left Ballinteer at the end of 2008 and there wasn’t all that much vibrant diversity enriching the area at the time. I used to walk past Dundrum SC on my way home from the Luas every evening.

      If it is anything like England then the govt haven’t a clue how many immigrants are living here. Accoring to Michael Hennigan (Finfacts) one in five living here were born abroad, and that is more than the number of Irish born living abroad.

      Thirdly, this really is about psychology which is why our media and state class (and many more besides) are “blind to all reality”.

      • coldblow

        Hennigan was using official figures, so this will be an underestimate. But sure live and let live. I ‘don’t have a problem’ with it. We are all human. When I look at one of the refugees I see a person. See, it’s all a question of perception! (Keep repeating this until you believe it.)

      • Grzegorz Kolodziej

        “I left Ballinteer at the end of 2008″

        OMG. I wonder if we had ever passed each other on the street – my then girlfriend lived in Ballinteer at the time. Getting up on Monday mornings trying to catch Luas was a nightmare for me ;-)

        • coldblow

          The 48A was a good service in the morning (they might have ruined it since) and then the Luas home and a nice uphill walk to round it off (averting my gaze from the monstrosity that is Dundrum ‘Town Centre’. I used to cycle it but after climbing to Dundrum the last mile was just getting too much for my back. I loved Ballinteer. We passed through it again last year and I actually got lost in Dundrum with the new road layout (don’t even mention Sandyford). I am a conservative at heart: I hated it when they widened Sallys Bridge and I am still getting over the decision by the English FA to introduce three points for a win in football.

  17. They are talking about you and rent control in Ireland right now on Russia Today (RT) David. Check out the segment when you get a chance.

  18. mike flannelly

    I cannot offer translation for the what seems to be German post.
    Considering that it was below my Irish financial services ombudsman observations, the post might be asking for more clarity.

    I am completely confused by the role of the IRISH financial services ombudsman.
    The role of a financial services ombudsman is to represent the interests of the public and investigate financial complaints on behalf of the public. He is then required to mediate FAIR settlements.

    Irish investment mortgages that were valued by bank lending professionals at 300 months rent had ZERO investment value from Day One. The investment mortgage was NEVER an investment. These financial products “did not meet the financial customers needs or objectives”
    Clearly there were at least two consumer laws broken with these products.
    Consumers were purchasing investment mortgages in good faith from a state promoted stronger party to the mortgage contract. The greater public are entitled to expect industry best practice banking from a bank promoted by the Irish state.
    Bank customers were not complaining about the price of property to the Irish ombudsman. They complained about the grossly overvalued debt ratios that destroyed their financial lives.

    Under these circumstances, the normal process is to investigate the financial complaint and

  19. mike flannelly

    Under these circumstance and based on the financial evidence, the normal process would be to provide financial redress to the bank comsumer.

    I assume that there is financial redress in Germany, UK, France, Finland and other EEC countries when financial products dont meet the needs and objectives of customers.

    Irish bank customers were seeking industry best practice split mortgage restructures and interest only restructures to get their financial lives back on track.

    UNBELIEVEABLY what happened in Ireland is that the financial services ombudsman appears to me to REDIFINE mortgage restructures for customers with financial anxiety as ” ongoing forbearance and FORCING a bank to be a joint investor.”

    Now all us europeans know that such financial products as missold mortgages and missold payment protection insurance products started out as “financial contracts” and “commercial arrangements”.
    It appears to me that the Irish financial services ombudsman refused to investigate the financial problems of bank customers financial products just because they were contracts or commercial arrangements.
    You couldnt make it up.
    What do our German friends think?
    It also appears to me that the Irish Financial Services Ombudsman had NO reason for IGNORING bank customers requests to restructure financial products that were grossly overvalued.
    I dont understand why the consumer laws were not acknowledged and enforced.

    Can the European court of justice help irish bank customers with financial anxiety that cannot afford to leagally challenge the Irish banks or Irish state for refusing to restructure grossly overvalued debt?

    On 29th Oct Bob Geldof discussed on Ray Darcys radio show how he felt years ago everyone knew about the catholic church child abuse but were not able to shout STOP.

    After more than 1,000 suicides and 1300 repossession cases on front of Irish courts in just ten days, is there anyone able to shout STOP?

    There have always been a small number of reposessions in Ireland for Normal Valued Mortgages where normal valued debt is not repaid, but only as a last resort where restructures fail. Nobody in Ireland would complain about normal repossession procedures for normal mortgage product failures.

    The repossessions at the moment are NOT for normal mortgage product failure.
    The best resolution outcome for bank customers is required for products that were grossly overvalued from day one.
    Full term interest only payments and industry best practice split mortgages.

  20. Victor Meldrew

    Is it not time we all woke up to the fact that there isn’t, or never will there be legislation that can be introduced that is going to solve the problem.

    The way the system works in Ireland is in the Irish psyche no amount of comparison with what johnny foreigner does in his country and any statistical evidence given is going to change that.

    This is Ireland things are done the Irish way, the way we have always done them, even if time and again we are shown that they are bad choices (I won’t mention the Lisbon Treaty here) we won’t change the habits of a lifetime, so whatever your point of view you might as well keep it to yourself, no amount of glib words, charts and comparisons is going to make the slightest difference.

    Except perhaps in David’s case, after all it pays the rent.

    • Yes everything will continue to be done the Irish way – arseways.

    • DB4545


      We certainly have a reputation for rushing into things slowly but we also have a track record for going postal as a society about once every century or so. There’s more than a sprinkling of mad redsers in our collective DNA who like to shake things up. Maybe we need to start shooting a few poets again instead of making them President to get the ball rolling?The jury is out on that one.

    • coldblow

      I don’t get your point about the Lisbon Treaty. Surely there we followed the Europe-approved instructions. Or do you mean we perversely rejected it first time round?

  21. Victor Meldrew

    You may well be right, but I didn’t say that now….

  22. mike flannelly

    Perhaps we could invite Bob and his celeb profile to shout STOP to mentally torturing families being refused industry best practice split mortgage restructures.

    The mental health costs must calculated and placed at the feet of bankers.
    Bankers are in no Ivory Tower.
    They have names and should be shamed.

  23. McCawber

    We are once again heading into economic boom territory. Bear with me.
    We have shown in the past that as a nation, both people and executive, we are totally unable to deal with an economic boom.
    That is the issue we must deal with.
    The rent issue is both a sub plot and a symptom.
    What rules should be applied in order to calculate a “fair” rent.
    Two examples.
    Landlord 1 is renting a house that has no impairments. Loans etc long since paid off and let us assume it wasn’t an inherited property, he took the risk of making the investment.
    Landlord 2 started his loan repayments yesterday.
    So What is to do? How do you decide what is a fair return on the property.
    There are amateur landlords out there too and they are by no means the worst landlords. a lot of them are stuck in negative and may even have left the country. Their situation in the main being due to our inability to manage a boom. Their situation is entitled to consideration too. If it isn’t we may find that we, the tax payer will be picking up that tab too as the foreign decide to walk away.
    Life is never simple is it.

    • We may not be heading into ‘economic boom territory’ if Joan Burton has her say. You see, she fancies that she has come up with an approach that means that there will be ‘no return to boom/bust economics’. She hasn’t told us yet what it is but Joan seems to imagine that boom/bust phenomenon are the RESULT of government fiscal and economic policy. However, the near universal experience suggests just the opposite – that economies move in cycles, with upswings and downswings all being part of it. The most that government has ever been able to do is respond to these in a fashion that ensures that the benefit of the upswing reaches into the places where they are needed, while mitigating the effects of the inevitable downswing.

      So what could Joan have in mind here? Maybe she fancies that a country, still on life support after five years of following the course set by ECB/IMF, can somehow be made to permanently flatline. That is the only way to make sense of the current administration’s strategy (or lack of one). Borrow to finance current expenditure while paring back capital spending to the bare essentials. Well, it worked before … didn’t it?

      The only other explanation is that, much like the talk about rent controls, it’s just that – talk. Promises in the year of election.

      Nothing much is about to happen. Anyone who thinks differently can fuck off to Lisbon or some other country that will take you.

  24. McCawber

    On Gold.
    It was interesting to hear at least one of the Republican presidential candidates actually referring to the gold standard and returning to real money.
    There is hope. I recently stayed in a B & B in Belgium (In the heart of the EU, no less). The proprieter (in her mid 50′s at most) did not accept plastic, I had to pay cash, which I was delighted to do, BTW.

    As an aside. I don’t know how to fix our currency but there are a lot of steps.
    Tony (As the standard bearer) – You have to start somewhere – I’d start with Derivatives and all the hocus pocus financial instruments. I’d start by reeling them in and then scrapping or limiting their use to what ever is regarded as appropiate.
    You have to do this sort of thing first because chaos loves a vacuum and if you don’t manage it then chaos is what will happen.
    As a pre-requisite the printing of money has to be stopped. Therefore governments have to bring in legislation which requires the CBs have to get the government’s permission to print money (You’d like to think any request would be met with a NO).
    This would immediately put the pressure back on Governments to start governing prudently again.
    That last statement Tony is the problem the financial world faces.
    Those that govern do not want to govern prudently, be they CBs or Governments.
    In Summary – First step – Stop printing money and remove the power (Decision making) to print money from CBs.
    It’s a long road.

  25. mike flannelly

    My question was what percentage of the net 2,000mth take home average earners wage would be considered “FAIR RENT”.
    or a couples net 4000mth take home average earners wage would be considered fair rent.
    EVERYONE is shouting rent crisis.
    All we hear is that rents are going up.
    From what Base?
    What is FAIR average earners rent?

    Investment mortgage debt metrics are a different issue.
    I know the metrics for investment mortgage debt.
    Standard investment mortgage metrics are that the rent must be 130% of your mortgage payments and stress tested at 2% higher than the variable rate.

    The maximum mortgage for a property with 1,000euro rent is 769euro.

    The 2006 to 2008 the same property had mortgage payments of 1,754euro on the 300,000 25yr mortgage.
    A 1,000 euro overrun from best practice banking.
    Pressure on landlords.

    The Irish state ombudsman stonewalling restructures is a seperate issue.

    With “ALL” the Rebt Crisis pontificating i want to know what is the Rent to income percentage amount
    that is FAIR.
    Surely there is a recommended metric like 25% or 20% of net pay for average earners.
    New money commentators are shouting RENT CRISIS but dont seem to have any idea of what % payments they do want. New money commentators claim rents have risen 20% etc.
    But from what base?
    Maybe they were too cheap in the first place.
    New money commentators need to know what percentage of the average wage they think is fair.
    They need to know what they want instead of shouting “down with that sort of thing”.

    • McCawber

      That was the question I was asking – Effectively define fair.
      The number of house being built to provide rental accommodation is surely based on “relatively simple” maths. Does the investment expect a “reasonable” and “reliable” return on their investment.
      I was talking to such an investor, about 6 months ago, and the numbers he trotted out didn’t suggest we were in rent crisis territory in terms of reasonable returns on investment. ie the costs and risks are still too high.

      • “didn’t suggest we were in rent crisis territory in terms of reasonable returns on investment. ie the costs and risks are still too high.”

        Do you mean that the return on investment was judged to be too low to encourage a builder providing new housing to the rental market?

        • McCawber

          Yeah, that was his view.
          That was six months ago, just to reiterate.
          He also said the market was very patchy. The closer to the city centre the better the return (stating the obvious).
          There may well be an agenda to overstate the problem.
          For example, if you are in opposition, with an election just around the corner, any mud that you can possibly rake up and exaggerate will be used.
          On the other side of that coin – We are on the verge (ahem) of another boom.

    • McCawber

      Read your post again and you are quite right.
      I’m not defending landlords, far from it.
      Fair is a two edge sword.
      So say one of the metrics you mention is the right answer for the tenant, it also has to be the right answer for the landlord too.
      Otherwise we end up with a rent crisis.
      It’s also highly likely there is more than one answer.

  26. Grzegorz Kolodziej

    Guys, I would be one of the last people to advocate rent controls or any economic controls, but I would also like to point out that we are not debating “rent controls or free market topic?”.
    As David pointed out,
    “it interferes with the “free market” or the status quo. But this is silly because the market isn’t free; it is rigged at every stage and the “status quo” doesn’t deliver stability but delivers massive instability.
    If we really want a free market in housing, we should scrap all tax breaks to property, stop allowing debt interest costs to be deducted from tax liabilities, stop any tax incentive into any form of building, introduce “use it or lose it” schemes in planning, introduce “non-recourse” mortgages and address a whole variety of other legacy interventions in this most tampered with market.”

    To allay any doubts, personally I would be rather in favour of flat tax rate than rent controls which would hit two birds with one stone.

    Sadly I do not have time right now to develop my thought.

    Also, a cap on the maximum borrowed worked quite well in Hong Kong – long term that is…

  27. mike flannelly

    Bill Prasifka
    I looked up the Financial Services Ombudsman in charge from 2010 up until recently.
    In All non corrupt countries the financial services ombudsman will listen to complaints plus identify financial products that are “Not Fit For Purpose” and do not meet the needs or objectives for financial customers.

    Legal contracts/ commercial arrangements that were not fit for purpose and did not meet customer needs are identified. Redress is provided either by substantial renumeration or by best practice restructures.

    Miss sold mortgages and miss sold payment protection insurance products are such examples.

    It is Not believable to me that Bill could say ” ah sure im not looking at any commercial arrangements or legal contracts”.

    Thats like a surgeon that says he will not look at any blood.

    Or maybe a “BUTCHER” in some cases.

    The central bank fooled Irish people with financial anxiety into a mortgage arrears a cul de sac to meet Bill at the end of three years anxiety.





    Nothing about Not Fit For Purpose financial products.
    No consumer laws.

    Bill was also the guy who agreed with the 2% mortgage rate increase when market rates went down 2%.

    100% of variable rate customers believed that rates would go up and down in line with market interest rates.

    “Vague and Unclear agreements are not enforceable”

    How did Bill enforce VAGUE & UNCLEAR contracts?

    Mortgage Arrears Resolution
    Undue influence/Unconscionable conduct of the stronger party to the contract.

  28. Grzegorz Kolodziej

    Also, for those who think investing in property is bulletproof (but I know we are in a catch 22 situation in Ireland – with property prices, renting prices and commuter belts stretching to galaxies far away thanks to unholy trinity of builders, bankers and trade unions – also known as National Development Plan), I would like to point out that a comprehensive house price index was compiled by financial analyst Karl Deeter, Frank Quinn of the Blackrock Further Education Institute and David Duffy of the Economic and Social Research Institute (trawling through over 20,252 deeds over the last 300 years no less!).

    They concluded that:

    1). In real values, property in Dublin cost less in 1944 than in 1744 and
    2) The real values of properties in Dublin fall by almost 90 per cent between 1906 and 1947.

    Oh, and I do not want to depress you even more as I know it is a two-way street and according to my local newspaper (but I did not verify it) landlords would have to pay the state 63pc of renting income in taxes (that would include all taxes, such as effects on income tax, not only taxes directly from letting – and I do not know if the local newspaper included loses of income from social welfare because let’s face it, only part of the reasons why we saw “rent allowance not accepted” – btw, another upwards price distorting tool – have to do with fear of getting anti-social tenants and most of them have to do with not paying taxes (which again, I partly understand!) – you would be hardly pressed to find a landlord in my town who offers rooms for rent and pays taxes;

    So I do not want to take away your hope of earning money on property speculation, but in the Weimar Republic you could buy a whole block of flats for one ounce of gold – and we are more indebted now than the Weimar Republic (of course, WWIII would partly alleviate the issue of debt, but Ireland would probably not be allowed to stay blissfully and prosperously neutral on this occasion – especially with the US involvement in the Irish economy…).

    I really should have written about that idea of mine of how the flat tax rates (eliminating loopholes and taxing properties which lie fallow as much as those who are rented) would in my humble opinion work better than rent controls – but I have to go off the net now :-(

    Sorry for any spelling mistakes (I always see them afterwards) and lack of proofreading – I really do need to type fast

  29. Neither RyanAir’s nor Aer Lingus’s websites are currently working – I can prove this by screen-grabbed correspondence on Twitter.

    Like I say, why do things right when you can do it the Irish way?- arseways. Clowns the lot of them.

  30. bremlin

    In the 80s everyone in Ireland seemed to be against Thatcher. Then we went and implemented all of the Thatcherite economic policies. I’m thinking particularly of “there is no such thing as society”.
    It is possible for communities to organize their own financial affairs. In Ireland this is exemplified by the credit union movement. In 1964 John Hume was the president of the Credit Union League of Ireland. He was a young man of 27. He then founded the Derry Housing Association. The activities of this Association providing housing for its members were resisted by the local government. Why don’t young people form such Associations in every large town across Ireland? No Irish government will solve the problem of affordable rents adequately.
    I have been living in a university town in Germany for the last 8 years. I live in a 3 bedroom apartment and pay 400€ per month plus 150€ for maintenance, gardening, clearing snow, water, heating and so on. The apartment belongs to a housing coop of which I became a member. The coop was founded in the nineteenth century. It’s basically a credit union that rents apartments to its members.
    We’re very comfortable here. There is ample space in my cellar for a small workshop. There is communal space for washing machines, hanging clothes to dry and a bike cellar. The insulation, heating and windows were fully renovated 4 years ago. Comparable new apartments in the area cost more than 250k€. If we have more kids, we will have the choice of bigger apartments as they become vacant. If the kids move out, I could find a smaller place. Most of all – our neighbours are open friendly helpful people. We feel at home.
    If I were to return to Ireland, finding similar flexible affordable rental accommodation would be impossible. Young people should have the choice to become a first time buyer but many would like to rent affordable accommodation. We need young people to follow in John Hume’s footsteps and change Ireland for the better by founding housing coops themselves.

  31. What happens to rental prices when the currency depreciates 50% in no time at all?

    What happens to the world debt problems?

    What is the quick fix, the reset?

    Does bitcoin go to 10,000 at the same time?

    • StephenKenny

      Depreciates against what?

      • Cost of goods and services. cost of assets, Cost of rents, housing. Wages will be static. Debts become easier to pay off for those with hard assets.

        Gold held by the central banks, as the revalued price is set multiples higher in order to balance the nations books , to technically expunge the debts.

        Currencies may be depreciated to 50–30 or 15%- 5% of current values. Roosevelt depreciated the US dollar in 1933 from 20.6 to 35 an ounce. A 59% reduction. A way of increasing the asset value of the country as compared to outstanding debt.Balancing the books.

        Those with hard assets will be better off . Those holding paper will be less well off. Greatest transfer of wealth at the stroke of a pen.

        That is why Holter talks of 100,000 dollar gold.

  32. mike flannelly

    Sorry McCawber,
    By Fair I mean what % of the average workers 2,000mth take home pay is FAIR for him/her to pay. I prob mean “AFFORDABLE”.

    “Excluding” what is Fair Return for the landlord.

    Perhaps the answer will tell us if the private rental sector is gone beyond affordability for the average wage thanks to FAILED 2007 BANKERS(same 2015 bankers) and FAILED POLITICIANS (all parties but mainly FG/Lab who had a mandate to change bankers culture)

    We know that people called Sean, Patrick and Michael have mortgage repayments of 1,754euro mth for apartments with 1,000 rent while guys called Wilbur have 350euro mth repayments for the exact same apartment.

    Not restructuring the grossly overvalued debt has contributed to the homelessness crisis.
    In 1997 Galway when there seemed to be money for landowner(site costs were about 16% of 60,000 pound house cost), tradesman, builder and banker the average rent was about 20% of the average wage.
    Then the average age of the first time buyer was 28 and people could concentrate on retirement planning when the 20yr mortgage was half paid. Now the average age is 36 and retirement planning has turned into retirement poverty for 80% of the population.

    The present govnt ringfenced bankers wages and most of all pensions. They got 5% pay rises cos they are worth it. The golden pension for the rats at the top table while the sickest children in Ireland have to rely on charitable donations. SHAME ON OUR GOVERNMENT.

    OUR Plastic cowardly patriots of 2016.
    The patriots of 1916 would turn in their graves.

  33. mike flannelly

    Bremlins housing coop idea seems good on paper .

    We need to take housing away from banks.
    We probably need to move money out of pillar banks who continually abuse the customer.
    Irish Bankers are the only World Class Failures that are arrogant enough to give the bank customer NOTHING that he/she wants. Their service is getting WORSE by the week.
    Their motto is
    “The Customer Comes LAST”

  34. Dorothy Jones

    Oh Dear
    David with Claire Byrne hadn’t done his homework or researcher hadn’t and was misinformed wrt to zoning and lack of ‘Use it or lose it’ legislation. This is in place and was enacted during late Summer 2015: Urban Regeneration and Housing Act, Part 2, 15, Vacant Site Levy.
    Working with site development in Dublin, where are Developers sitting on vacant sites? Common sense would tell you that this is not the case, planning applications, site notices, siteworks.

  35. Dorothy Jones

    Cost of compliance in apartment building, good analysis of costs to comply with DoELG and/or Local Authority guidelines:

  36. mike flannelly

    How did David get on with his future property price conference?
    Sort of like Land Banks?
    Bonus payments NOW for margins and hard labour of our children in the future.

    From 2006 to 2009 Richie Boucher was in charge of Land banks and Development Loans with Bank of Ireland. Large Bonus payments and pension top ups for margins of the future. Bank shares in BOI went from around 10euro to about 18euro from 2003 till 2009.

    After 2009 Land banks were written down by 90%, Apartments by 65% and houses by 55%.
    The aggressive profit growth strategy did not work.

    I keep asking David for best practice bank metrics for the economy as it stands this year. If the economy were to perform as it is today.
    Rent costs?
    Advisable home mortgage costs seem right but the deposit is high. We could have a deposit of 5% for non recourse mortgages.
    The only reason for banks to refuse such products is that they dont trust the real values.

    Guys like Warren and Wilbur could teach them.

    Guys called Wilbur or Warren will know that Real Value Debt is tied to the average industrial wage in a country. So are Real Value House prices and Rents.
    They know what base to work from to be able to buy below Real Value. I agree that the economy is not a set of guaranteed variables, but it is not as subjective as people that try to sit on the fence make out. There are still best practice metrics(guidelines) that help control Real Value Debt. Greed is an influence but not an excuse.

    Now our government have Richie Boucher as the top banker in our proudest pillar bank.
    He might Restructure Debt to ensure that people in the economy only service real value debt.
    Then the average of the first time buyer might come back closer to 30yrs and people might be able to think about their retirement planning when they turn 40.

    Europe told us that our banks should not fail and there is an ESM fund there for banks to restructure their debts.
    There is and was 30bn/40bn@ 0% interest there for Enda and Michael to restructure False Value Debt.
    If Enda and Michael gave Bank of Ireland 15bn at 0% would they charge us 6% and put 5bn into their own pensions?

    Failure to identify false value debt and restructure it is the quality assurance failure for todays economists, politicians and bankers.

    Pillar Bankers like Richie have claimed they have no money do what is right for the greater public interest yet pretended they did not need the ESM fund to restructure debt.

    If we had accessed the ESM fund we would have organically working banks and rising bank shares. A sence of hope and less mental health problems.

    Enda, Michael and the Economic Management Council of School Teachers must stand by their Bank Solution Choices that are not serving the greater public interest.

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