Caitríona McClean, Fianna Fáil Lucan activist and runner in GE20, calls out Government on decision to allow REITs continue to buy up entire apartment blocks. ‘I believe this is a mistake and we are losing an opportunity here to open the market to individual buyers’, says McClean. ‘Is there any reason why REITs apartment blocks should not have planning permitted on the proviso that 20% must be sold on the open market to individual purchasers? I have written to Minister Darragh O Brien to raise this question,’ says McClean.
There is an assumption that apartment living is a rental market. This has not been demonstrated, according to Caitriona who believes that the Minister is not going far enough to ensure apartments are available to would be purchasers. ‘Minister Fleming was on RTE radio recently explaining that apartments cannot be occupied until the entire block is finished and therefore the funding model requires investment up front which is the rationale for accepting REITs buying up entire blocks. I think this sounds plausible at first but when you think more deeply about it the argument is flawed. There is nothing to suggests that developers cannot hold back 20% of the block for individual purchase and given the pent-up demand in the housing market at present it is likely there would be no problem finding individual buyers.
‘It is simply not good enough to accept this funding argument at face value and to deprive people of the opportunity of owning their own apartment. It is always easier to resist change. With change comes extra work, but Fianna Fáil should go that step further and interrogate the argument for the status quo’, says McClean. ‘I think we may be about to lose the opportunity of reserving 20% for individual purchase even if the capital has been provided by REITs. The Irish market represents a good investment for these funds, and still would provide an excellent return with this amendment.’
In time, Caitríona McClean would like to see the State (via perhaps housing bonds) engage in this market and the profits reinvested in social projects such as cost rental and social homes. ‘As a first step I call on the Government to consider reserving 20% for individual sales as a pre-condition for planning permission. This move will guarantee that apartments will be available to purchase notwithstanding the REIT funding model’ , concludes McClean.