The Government is this week taking a hit over the farcical events around the appointment of a 'housing tsar'.

Brendan McDonagh, the National Asset Management Agency (NAMA) CEO, was linked with the role, but has now withdrawn his name from consideration.

According to its own blurb, NAMA was established in 2009 during the banking crisis in order to deal expeditiously with non-performing property loans acquired from Irish banks.

Like most Irish people, when I hear the word NAMA, I think of vulture funds, ghost estates, repossessions and the collapse of the pillar banks.

In the fullness of time, we will better understand how successful NAMA was as a concept and whether it was the best approach to the very grave situation the Government and the economy found itself in.

In any event, Fine Gael let it be known that they were not in favour of Brendan McDonagh taking over the housing tsar role, particularly if he would, as was being suggested in the media, be bringing his current salary of €430,000 with him.

In a way, it’s an appropriate level of pay, because it’s almost equivalent to the average price of a house in Fingal, which is €445,000. It’s well short of what would purchase a house in Dun Laoghaire-Rathdown. You’d need €662, 000 to buy in that more des-res region.

Late Late reservations

Tanaiste Simon Harris chose the most public forum in the country (short of an All-Ireland captain’s victory speech) to vent his reservations on Friday night.

On the Late Late Show on Friday night, he responded to the key question from Patrick Kielty by saying he didn’t find such a salary appropriate for this job. When asked if he had blocked McDonagh’s appointment, he replied: “I don’t like the word ‘block’, I just didn’t think it was a particularly good idea.”

Also on Friday, in perhaps an unrelated matter, came an allegation from The Ditch in relation to a property in Cabra which they say Brendan McDonagh owned.

James Browne is the new housing minister and this week has been a bit of a baptism of fire for him. He’s my local TD, even though, thanks to the division of Wexford, I am now in a different constituency to him.

He’s less than 10 miles up the road from me and I know him to be a very ordinary kind of person, who doesn’t live high on the hog in any way. His father John, a TD for 34 years, is a very similar kind of man.

These days, I most often see John parking cars or stewarding in Belfield, home of his beloved Rapparees/Starlights GAA club.

And yet, James is now embroiled in the first significant pothole this Government has encountered (apart from the ridiculous speaking time issue). Housing seems to be like a tornado that devours everything in its path.

Primary victims

Of course, James Browne is not a primary victim of the housing crisis. The primary victims are people, particularly young people, who cannot afford to buy a house or apartment. Instead, they are forced to pay eye-watering amounts for accommodation rental.

The housing crisis has been with us since the banking crash of 2008. In Ireland, the primary cause was the unsustainable building bubble we had gone through over the previous decade.

And while property magnates and banking executives were brought low, most of them still maintained a standard of living that the average citizen could never dream of.

The average citizen - who paid to bail out the banks - was the one who suffered most. The average taxpayer still pays the Universal Social Charge, the ongoing price of the largesse of the boom.

They left because there was no work in construction and their loss meant that we don’t have the personnel to catch up with the demand for housing

They are also the average car driver who had a levy inflicted on their insurance payments to fill the deep hole left in the by the collapse of the Quinn empire.

Hundreds of thousands of people lost their jobs. Hundreds of thousands, particularly those in the building trade, emigrated to find work in the UK or the US, in Europe or the Middle east, or in Australia or New Zealand.

They left because there was no work in construction and their loss meant that we don’t have the personnel to catch up with the demand for housing. And the lack of housing is now the primary reason why those who might like to return and make their live in Ireland feel unable to. It’s a vicious circle.

When the history of this country over the century to date is being written, I think that one of the slow-burning issues yet to be uncovered is exactly who were the people to benefit most from the economic recovery.

By that, I mean who were the individuals and companies able to buy assets at distressed prices at the bottom of the market and gain as their value recovered. Fair play to them and all that, but as the banks were essentially nationalised by then, you'd love to know who got money and where to re-invest in the depressed market. I mean this in the broader context, this has nothing to do with Brendan McDonagh> I'd never heard of the man until the last few days, and know little or nothing about him.

I do know that the ordinary person, by and large, didn’t have access to borrowings. Their savings were hit, their earnings were reduced, their tax bill went up and the banks more or less closed their doors.

And yet, it seemed that many of the people who were at the top of the tree when the whole thing went bust somehow found access to borrowings to build a new portfolio of assets. It may have been all in order, I have no idea, but it still rankles with me.

And then there are the vulture funds. Many farmers who over-extended during the boom, either expanding their farm or “sweating their assets” for property acquisition, saw their land dumped by banks into vulture funds.

Of the thousands who experienced this, only a handful went bankrupt, but hundreds lost the borrowed asset. The level of security of farm loans meant a heavy price was exerted by the system.

You would think that that security on borrowings would lead to very low interest rates for farmers, as land is one of the few things that retains a core value through a downturn.

Farmers under fire

What does any of this have to do with farming in particular, you might well ask?

Apart from the fact that the housing crisis affects every family in the country to one degree or another, there is the parallel issue of the residential zoned land tax (RZLT).

This week saw the deadline for local authorities to acknowledge applications for dezoning of land zoned for development.

For farmers, applying for dezoning is the only way to escape the clutches of the RZLT if the land in question is deemed to be serviced. For 2025, merely applying for dezoning is enough to gain exemption for the tax, levied at 3% of the market valuation of the lands in question.

The valuation is self-assessed, but with the price of land, it quickly turns into money. However, in order to permanently escape the clutches of the RZLT, the dezoning application needs to be approved by the local authority.

The deadline for those decisions is 30 June next. If unsuccessful, the tax for 2026 will fall due next February.

My colleague James Hanly this week showed the volume of applications made for dezoning. Fifteen counties responded, with a wide variation in the application levels, as can be seen here.

Looking at a headline figure of 370 acres, or 150 hectares in new money, it doesn’t seem to be that big an issue. Of course, the proper response to that is that it’s a big issue for the affected farm families.

However, there is a broader answer. The RZLT was the big-ticket item of the last Government in terms of legislation to unjam the blocked housing system.

It’s a similar instrument to the flawed and failed Vacant Site Levy of the previous Government. And the inference is that it’s a lack of available affordable land that is preventing houses from being built.

You’d forgive people for thinking it’s greedy farmers and other landowners who are responsible for young people with good jobs leaving the country

You’d forgive people for thinking it’s greedy farmers and other landowners who are responsible for young people with good jobs leaving the country in despair at the impossibility of owning their own house or renting at a reasonable price.

And it’s codswallop. The cost of building, due mainly to the explosion of building materials, is a primary factor. The labour shortage in the construction sector, a legacy of the Tiger’s collapse, is the other primary issue.

And when houses are eventually built, prospective house buyers have to contend with the presence of investment companies, who have huge tax advantages over them. The investment companies are buying entire housing estates and then renting the properties back to the young families they have just outbid. Many of these investment companies are linked to the vulture funds brought in when our own banks collapsed.

Land is never cheap

Land is dear - you don’t have to tell any farmer that. But the site cost of a house in Ireland is currently 13% on average. That’s less than the VAT the Government charges on the purchase of a newly-built house.

If a developer wants land, they will almost always find a landowner willing to sell, once the price is right. Neither land availability for building, nor the cost of it, is holding property developers back.

The limiting factor in many cases is servicing of these sites. In particular, waste water treatment is in chronic undersupply. Most towns and villages that do have some spare sewage capacity don't have anything like enough to fulfil the needs of the number of houses that could be built on the zoned land in the catchment area.

There's this Schrodinger-like trick being pulled, a thought experiment that posits that any and all sites are deemed to be serviced as long as there is any capacity in the system.

For instance, where if there is zoned land sufficient to build 1,000 houses, but only sewage capacity for 100 houses, all the land capable of building those 1,000 houses is deemed to be "serviced" from a waste water point of view. But in a huge amount of areas Irish Water cannot meet the wastewater requirements of people for one-off houses where a private water treatment system is not an option.

Then there is our planning system. Rightly called a “cranks charter”, objections - particularly to housing developments - seem endemic. And while a high proportion of planning applications are granted - over 85% year on year - a look at housing developments shows a different picture.

In 2023, 26 strategic housing developments were approved, while 14 were refused. That’s a high rejection rate.

Google 'Dublin housing development rejected' and read through the ongoing sad saga that is our planning system. You will usually find local politicians opposed to the planning application. And these people can be from any party or none.

Meanwhile, the Land Development Agency (LDA) says it only has 15 sites within the State’s publicly held land bank. The combined capacity is enough to build 15,000 homes by 2032.

This is only a fraction of what the Government said it would provide when the LDA was established in 2018. Ten percent, to be exact, as in 2018, the government said they would build 150,000 homes in 20 years.

Alex Wilsdon is a farmer whose land was listed as liable for the vacant site levy and again now for the RZLT. He has understandably been closely monitoring all this and is extremely sceptical of the LDA report.

I talked to him this week and he believes that the tightness of the public coffers is the main reason why such a small proportion of State-owned land is deemed suitable for development over the next seven years.

"The LDA appears to have identified only enough land as being suitable to develop as the Department of Finance would like it to do - all the rest is 'constrained' in some way - often by an arm of the State itself,” he said. “Yet no part of government is concerned with the constraints on farmers hit with RZLT."

James Browne has responded to the underwhelming news from the LDA by calling on every local authority in the country to zone more land this year.

Last month, he told a housing summit that once the national planning framework has been revised, “I will then give a direction to all the local authorities to open up their county development plans and to rezone a very significant additional amount of land so that land is available for builders to build the homes that people need across the country”.

This will expose a whole new set of farm families to the RZLT and continues the narrative that it’s a lack of land that is holding back the construction of houses. The current RZLT issue will be dwarfed by what’s coming. I’ll keep you posted.