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Communities Abandoned in the Interests of Private Profit

07/06/08

The gross inequalities fostered under the ‘Celtic Tiger’ economy were cruelly exposed last week when the hopes of five working class communities across Dublin for the basic right to decent housing were dashed.

The decision by McNamara Building Contractors to withdraw from a Public Private Partnership (PPP) agreement to provide social housing for communities in St Michael’s Estate, St Teresa’s Gardens, Dominick Street, Infirmary Road, and O’Devaney Gardens has again highlighted Fianna Fáil’s consistency in putting the interests of private business and profit above the rights of working people.

Michael McNamara, a former Fianna Fáil councillor from county Clare and executive chairperson of one of the largest construction companies in the state (with a turnover last year of €370 million/£293 million), claimed that the decision by McNamara Construction to withdraw from the projects was based on “adversely changed circumstances in the housing market,” as well as new guidelines on apartment size and new energy saving regulations.

For McNamara, profit margin is the bottom line. The communities that have waited decades for decent housing and suitable community facilities are now left in limbo. Those who gained least from the ‘Celtic Tiger’ have been cast aside in the interests of private profit. Within a system that considers housing a commodity rather than a human right, it is no surprise that examples like this have increasingly become the norm in Irish society.

The construction industry wields great influence in the corridors of power. This was evident when the Twenty-Six County government capitulated to the industry in relation to the provision of social and affordable housing. Part V of the Planning and Development Act 2000 allowed local authorities to require that up to 20 per cent of land for residential development would be set aside for social and affordable housing.

A key condition of the planning permission required that property developers transfer the necessary proportion of dwellings, land or sites to the local authority. However, property developers were unwilling to implement this and, using their undoubted influence on government ministers, successfully lobbied for a change to the legislation. This was dutifully granted by the then Minister for the Environment and Local Government, Martin Cullen.

The Planning and Development (Amendment) Act 2002 was introduced allowing developers to meet their obligations in this regard by providing monetary compensation and/or dwellings, land or sites in an alternative location. The business interests of multi-millionaire property developers were put ahead of the social benefits of providing mixed housing developments and, thus, the policy of housing segregation continues apace at the behest of these developers.

Over the course of the ‘Celtic Tiger’ period there was an unprecedented surge in house building. In 2005 alone, 85,000 new houses were built, with the average price of a house in Dublin rising to well over €300,000 (£240,000).

These inflated house prices presented ample profit for banks and building societies, developers and estate agents, whilst crippling working people with massive mortgage repayments. Conversely, the number of social housing units built lagged well behind, while, simultaneously, the local authorities progressively sold off their housing stock.

This, combined with soaring house prices, meant that more and more people were squeezed out of the housing market, with the result that there are now 44,000 households on housing waiting lists across the Twenty-Six County state. Working class communities have once again been made to suffer at the hands of a government, which has increasingly withdrawn from the provision of public housing over the last 40 years.

The deal with McNamara was not just about providing housing units; in essence it was about the redevelopment and regeneration of entire communities. The regeneration plans included the provision of a social infrastructure and facilities willfully neglected when many of these complexes were built.

The ‘Celtic Tiger’ bypassed these communities. Many suffered the worst effects of the heroin epidemic that hit Dublin from the early 1980s. They also experienced high levels of unemployment and poverty and were beset by problems related to the drugs crisis, including open drug dealing and the disposal of used syringes in stairwells. They were effectively abandoned by the state.

As the economy expanded, the government was more interested in providing tax breaks and shelters for big business and tax avoidance schemes for millionaires than in redistributing the wealth generated.

Belatedly, regeneration programmes were advanced following sustained local community campaigns that demanded change. The hopes that the community of St Michael’s Estate had for the regeneration programme were encapsulated in a document published by the Estate’s Regeneration Team in 2002:

“Our overall aim for the regeneration of St. Michael’s Estate shall be one whereby the residents of the estate are treated with dignity and integrity and are guaranteed quality of life, quality housing, quality services, quality community facilities within the newly regenerated estates.”

They asked for no more than any community is entitled to. However, the regeneration programmes were to be developed under PPP schemes. Under these schemes, the local authority essentially gifts publicly owned land to a private developer. The developer demolishes the existing social housing on the site and builds a specified number of social housing units while simultaneously building private dwellings to be sold at a profit.

One of the difficulties with the scheme is that the number of social housing units returned is much less than that which the state held in its possession on the site in the first instance. Thus, there is a continual diminishing of the social housing stock. Critically, the schemes are driven by the private sector and are entirely dependent on market forces. Hence, if the private developer does not consider the profit margin sufficient, the project will grind to a halt and communities will be abandoned.

Furthermore, large banks of publicly owned prime land are being handed over to private interests. There has been little or no debate as to the extremely poor economic return on the sale of this land. Notwithstanding the obvious inadequacies of the PPP system, former Taoiseach Bertie Ahern proclaimed in 2005 as the first tenants moved into the newly developed Fatima Mansions:

“[the] Public Private Partnership [scheme] is a pioneering flagship project for the Housing Sector. From the start, I believed that the PPP option had the potential to deliver the regeneration in a more timely manner than would normally be the case using the traditional procurement methods.”

Indeed, the following year, his brother Noel Ahern as Junior Minister for Housing and Urban Renewal ironically suggested that:

“Part of the reason the City Council chose the PPP approach for O’Devaney Gardens is the potential to deliver the regeneration in a faster period than would be the case using the traditional procurement method”.

Their comments can now be judged in light of what has happened in recent weeks.

While working class communities have been denied basic rights to housing, businessmen such as Michael McNamara have benefited enormously from the symbiotic relationship between the construction industry and the Fianna Fáil party.

He was a regular attendee at the Fianna Fáil fundraising tent at the Galway Races, where, along with major business and construction industry figures such as Denis O’Brien, Michael Bailey and Seán Quinn, the government party made a profit of €1.25 million (£990,000) in the five year period up to the 2007 general election.

McNamara’s company currently holds some very lucrative public contracts, including the refurbishment of Leinster House, worth some €35 million (£28 million), renovations at the Natural History Museum at €25 million (£20 million), and the building of the controversial new prison site at Thornton Hall in north county Dublin, worth hundreds of millions.

McNamara is part of a consortium that bought the site of the old Irish Glass Bottle Factory for €412 million (£326 million) in Dublin’s Ringsend. The re-development of the site is being likened to a ‘mini-Manhattan’. The site was the scene of a major battle in 2002 when Ardagh Glass decided to sell the plant, and the government refused to intervene to save the 400 jobs at the plant and the state’s sole glass recycling facility.

Commenting on the situation, éirígí chairperson Brian Leeson called on the minister responsible for this crisis, Green Party leader John Gormley, to meet with the residents of the various regeneration projects immediately and outline to them in detail how the government intends delivering on their commitments.

“The residents of these areas have been abandoned by the state once again and, to make matters worse, there is a dearth of information as to what is going on,” Brian said.

“The minister needs to act immediately and ensure the finance is made available by the department to ensure the completion of these regeneration projects.”

Leeson went on to state that PPPs are an entirely inappropriate mechanism with which to provide for the social housing needs of the community.

“I am calling on the Dublin government to end the practice of using PPPs, which have failed these communities so badly. The state’s social housing programme should not be profit driven – it should be based on the need of communities, families and individuals for adequate and comfortable living conditions. That is the only humane way to approach this problem.”

Residents from Dominick Street, O'Devaney Gardens and St Michael's Estate will hold a public rally outside Dublin City Hall on Monday June 9 at 6pm. Everyone who can attend is asked to support these working class communities in their fight against neglect.

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