Kate: 0:32

My name is Kate Rattigan and I work with Winterbrook. We are a family, second generation family house building business. I'm particular about saying house builder versus property developer because of the connotations, and so we have a huge history of delivering housing. We have our own construction team, which means that we can control the construction process and the delivery and the timelines of that process. I work with my brother and my sister, who are I think we present an incredible team, each with their own skills.

Kate: 1:11

My brother, conor Rattigan, is the MD of the company and he is a wizard with finance and strategic planning. My sister, anne-marie Drohan, also works in the business and she is a wizard with people, with the management of the developments and also an expertise in sales, which aren't my bag. I think house builders are really important in the small house builders like our company, winterbrook, because we actually deliver about 60% of the houses to the people of Ireland. That, I think, is interesting because there's about 480 different home builders like us and the top 10 home builders, which would be your listed companies like Cairn and Glenveig. But I think the small, granular, smaller, medium sized builders like ourselves are a huge critical importance to delivery.

Rick: 2:11

They certainly are. So you're essentially in a family business where you all get along. It's a very, very unusual setup and you were very complimentary there to your siblings, which is lovely to hear. I work in a family business, as you know as well, and it can sometimes be described as a war zone, but thankfully I just have one sibling, so it's perhaps a little bit easier to manage. Yeah, how do you find it Like? I mean because, like I say, you described them very glowingly there. But how is it working in a family business? Do you find that it's? You know, you'll say things to family members that you wouldn't say to the general, the general public. How do you guys get along like on the day to day?

Kate: 2:59

Well, I think we, we, we do get along really well on the on a day to day, and I think that is because, like, why did I give such a glowing description? It's because I respect what, what each person brings to the table, and I think that's really important. And I, having talked to another few family home builders, if, if, if, if, the if, the roles and responsibilities are not clear, that's when the arguments start happening. So I'm doing Anne-Marie's and Connor's job, and that's where things get really, really confused and at times, so say, we're working on a project and all hands are on deck. That's when the arguments happen, when we are micromanaging each other and saying, did you see that email? And you have to say, at that point, just get lost. I know, give me space, I'm doing it, I've got this. That's where I think, in a traditional sense, you wouldn't have such micromanagement, because and it's because it's so important to everyone, uh, that this is why that happens. But that's the danger zone and that's where the arguments happen.

Rick: 3:59

And, yeah, you need to call, call them out for it and it's it's, it's for sure, important to have very clear lines of responsibility, because a lot of these businesses because I know your dad started the business right- that's right.

Rick: 4:13

Probably similar time to my dad, or maybe a little bit before, and all of those guys were one man bands, right, they were the CEO and and director of hr, and it was all the one, exactly. Yeah, so it would have been a very different environment for for them then. You know there's three of you now and you will have to divide up the responsibilities and not try and cross over in each other.

Kate: 4:37

So well it is. It is an interesting, um, uh, an interesting trajectory because a lot of the let's call them the OGs so your father and my father has a huge history and expertise in building. But yes, they did start them from scratch, from absolutely nothing, and a lot of these fellas came from the country. They are very sharp and they did everything.

Rick: 5:03

A quick aside here. Kate mentioned the OG builders. She's referring to companies that were, in most cases, started within the last 50 years. Generally, these companies were started by tradesmen going out on their own and they really were on their own no real capital to speak of, no government support. Many of them failed, but the ones who survived produced thousands of homes in Ireland and employed thousands of people and generated billions in revenue for the state. It is worth repeating that around two-thirds of all housing being developed currently is produced by these small family businesses. So the next time you hear someone complaining about property developers, remind them of that. Now back to Kate.

Kate: 5:38

I'm part of a group of female property developers that are also second generation, and that's an interesting twist because from females taking over the businesses and being involved in the businesses, Well, it certainly is.

Rick: 5:51

I actually wanted to ask you about that as well, because it's even I mean, I'm at this 22 years and it was always very notable for me that there were no. There were no women involved, right. But now it's changing and you do see girls with the hard hat on and the boots, which is great. How do you find it working? In construction? It is still male dominated, I think.

Kate: 6:14

I think you have to have. You have to be able to have a hard shell, and I have learned this through conversation with a lot of women in the construction industry. You have to brush things off, you have to stand your ground. I have attended so many site meetings where not only am I a woman, but I'm the client, and these women that I'm speaking about are also in that position the second generation, or gosh, if anyone is a new female developer you you not only do you have to manage the room, you have to manage the people and, yeah, you are the only woman in the room.

Kate: 6:57

But I have learned to. I have to speak up, I have to make my body bigger, take up more space in the room. There's these things that I am aware of, that I have to make sure I do and also things can tend to get quite aggressive. So picture this I'm in a and I'm referring to a real life situation I was in a port-a-cabin with 25 men around and a massive argument broke out and hugely disrespectful things were said by the head contractor and I had to immediately call a halt to the meeting, pull the person outside and say how dare you never speak to me like that again. So yeah, and as a woman, it's hard to do, but it's also empowering, and I think that women are beginning to become part of the construction industry.

Rick: 7:54

I think it's probably. I mean, look historically, we all know the issues with getting women involved into senior levels of business, but construction is a particular difficulty because a lot of people that come into it on the management side are come from a trades or engineering background, and those jobs are in still today. There's very few women becoming an apprentice carpenter or an apprentice electrician, but it means then that the funnel up is kind of a bit more difficult. They tend to come from architecture, finance rather than from the other side.

Kate: 8:26

Yeah, it does tend to come from the sort of the STEM subjects. Actually, while we're on that point, I spoke at conferences lately in the last year which I've been enjoying, and a keynote speaker was Dr Katrina O'Sullivan, who wrote the world renowned book Poor, and she has inspired a program in collaboration with Maynooth University to encourage young females in their school going years into STEM subjects. So I have just completed 10 hours of mentor training to be a mentor to transition year students yeah.

Kate: 9:04

To encourage girls from disadvantaged levels of society into science, technology, engineering and maths, and I think it's inspiring for them to see women working in the construction industry, engineering industry, et cetera, to show that these roles are possible.

Rick: 9:22

Yeah, it's great. I mean, it is a little bit of a chicken and an egg scenario. You need more of them to encourage more of them, but it will happen, I think, over time. So that's real interesting. There's a lot of things I wanted to talk to you about, Kate, but one of them is the National Development Plan. I am aware that you are working on a committee with CIF, IHBA, I should say, about the National Development Plan. I'm completely uneducated about this. I can have lots of excuses for that, but I'm just being a bit overloaded of late with all of these different plans and reports and stuff that have been coming out from central government that have not been accompanied with action alongside them. So I salute you for trying to get involved. Can you give us a breakdown? What is the National Development Plan?

Kate: 10:09

The National Development Plan is probably the most important strategic document that will inform the future of Ireland for the next 25 years through till 2040. So the National Development Plan it's the kind of the cornerstone of an arch. So it's the cornerstone piece that sits as a policy level at the top of every other single level of report and piece of policy and legislation. So it's the medium to long-term vision about how many units are built, how many homes are built, where they are built, and it goes through region by region what that looks like.

Rick: 10:50

And it doesn't cover all infrastructure like housing, roads, hospitals, schools, or is it focused?

Kate: 10:58

It does.

Rick: 10:58

I mean obviously our end of it is going to be the housing end of it, but is it an overarching document that covers everything.

Kate: 11:06

Yes, it does. It covers all areas of infrastructure, so housing is one of them. Roads, utilities, wind farms all of that is captured within this overall national development plan. It's pretty important. It's important and the unusual thing is that there's only two more times to review it. So it started in 2018. It runs through to 2014. Every six years there is an opportunity to adjust for anything that has changed in the last six years. So this is the first revision of this framework in the last six years. So this is the first revision of this framework and the previous framework lists. It's quite complicated, but I will just list out three main points. It projects what the population will be number one. It also projects how people will move around Ireland. So, on a region per region basis, what the growth of the regions will be. So in the previous plan sorry, in the first revision they said that there will be 50-50 regional growth. So 50% of the growth will be in the middle and eastern area of Ireland and the other 50% will be in the southern and western regions.

Rick: 12:25

And was that a prediction or was that a policy objective?

Kate: 12:29

It was a prediction and a policy objective. Right.

Rick: 12:33

How has that been borne out?

Kate: 12:34

Well, I'm sorry, just the third thing that it projected, that it established through policy, was that 40% of all new housing development shall be in urban areas. So brownfield, urban areas. What has changed and what? So it didn't go to plan, so we have had an extraordinary complete explosion, as we know, in our population. The population projections weren't big enough and the population didn't move into the direct regions as they projected. So Dublin has grown exponentially and the government are trying to encourage people to move into the other five cities. So Dublin is one of the five cities. You've got Limerick, galway, cork and Waterford. They want to increase the size of those cities, but it seems to be Dublin centric and so that has been a shocking development that nobody could have predicted right?

Rick: 13:36

People want to live in the big city where all the jobs are.

Kate: 13:40

Yeah, the population is a major one. Why are these things important? Because the data contained within the national planning framework so say, there is projected to be 6 million people or 7 million people and these little nuances are extremely important because whatever the numbers are decided on, then they get filtered through all the national policies. So it goes then through the regional plans, the regional plans, the county development plans, to the local plans and then it tells the, at the very smallest level of the system, how many units, how much land is zoned and how many units they can plan for. And so, without the population being correct and when we keep undercooking the projections in the housing you under project, under plan, we don't have enough zoned land for the developers like us to build, and the local authorities say, well, we've hit our plans. And in some instances you'll find that county development plans are downzoning, they're downzoning the land.

Rick: 14:54

It's not unusual for that. I mean, it's very common that that's been going on in a lot of places.

Kate: 15:00

Yeah, and so there are problems. If you think about the massive increase in population, we have underbuilt and undersupplied. The Housing Commission report have come out with a figure of, on average, an undersupply to the market of 235,000 homes. So we need to play catch up. So the national planning framework is a medium to long-term plan. What we need to see is the short-term plan. We need action, we need to zone the land that is needed to catch up and build that undersupply units. And then we haven't even begun to talk about, year on year, what is required for our increasing, growing population.

Rick: 15:39

And in a previous episode with Kate English from Deloitte, we discussed that and she explained to me the difference between structural demand and the, the unmet, the previous unmet demand. Um, you know, and we we got to, we got to big numbers pretty quickly. You know that there there's hundreds of thousands of units that were not built, that needed to be built, and there's ongoing demand, um, which the esri are saying is, on a base case, 40 something thousand units a year. But when you add that to the unmet demand you quickly get to 80, 90 thousand units a year.

Kate: 16:09

I'm so glad you pointed that out, because that was a key flaw maybe and it did point it out in the ESRI report that the housing deficit to date wasn't added in.

Rick: 16:23

Yeah, we need immediate action, and I said to her as well that I look at this very pessimistically. I know you're not a pessimist, right? You're not like me, or I'm more of a nihilist. Actually, I was told recently, the idea that we will ever get to the point where we're constructing 80 to 90,000 units a year in Ireland is, to me, is a fantasy. Right? We did it once, 2007, I think there was 80 something thousand units constructed. That was in the height of the madness. We're struggling to get to 40,000 now.

Rick: 16:58

To get to 80,000, we need to double the size of the industry, right? So we need to double the amount of labor, we need to double the amount of capital We'll get onto that in a minute. We need to free up all of the log jams that are associated with it right Around infrastructure, irish water, or Ishka Aaron, as they insist upon being called now. And planning, and planning to me. I am sure people listening to this are just sick of hearing about it. But if we don't change that, this NDP is pointless, right? We're never going to hit any of those targets unless you. You know, it's like trying to bail out the Titanic with the glass.

Kate: 17:33

Well, here's my take on it, so I changed my mind yeah.

Kate: 17:37

Okay, well, I'd like to just talk about capacity, which is the first point you brought up in your question. And how do we double the house building market? I think it's really simple. I've produced a series of diagrams where and it goes back to my original point of how the home building market is made up If the top 10% builders that I mentioned deliver 35 to 40% of the units, which is what they currently do if they grow by, if they double in capacity, which I think they can, so say, glenveig and Cairn are delivering 1,500 units around a year. If they double to 3,000 units a year, which they have the land bank to do and they have the capacity to do, let's say that happens. The rest of the market being the other 60% of the home builders, on average deliver a really small amount of units a year. It's only about 34 units. That's what the data says. If the small home builders increase their capacity 10% year on year for the next six years, we will be able to make it to 80,000 units, for sure.

Kate: 18:56

So it's that small growth.

Rick: 18:58

But that small growth can't happen without all of the other barriers being taken away.

Kate: 19:02

No, they can't. Small builders need funding. We need access to equity to buy sites. So, because the planning system is so risky, you need to actually have about three or four projects on the go so that one of them comes through In times gone by. It didn't work like that.

Rick: 19:24

I'm sorry to interrupt you. It's worth just exploring that a little bit, because we have a lot of people that listen to this that are not in the development industry. What you said there makes perfect sense to me, but it might not to other people. So I think what you mean and correct me if I'm wrong. If you have three or four sites that, um, that don't have planning, and you start going through the planning process on all let's call it four and let's say they all start at the same time.

Rick: 19:49

To make it simple, you're going to have maybe one that gets a planning refusal. You're going to have one where Irish water say that they can't, uh, they need upgrades to service a site. You can have one where, uh, you get planning but then it gets, uh, appealed to board plan all and board plan all. It's delayed and then they grant the planning and then it gets judicially reviewed. So you're kind of hoping that you get one through that system that you can actually build. And while you're building that one, the other three, you try to work out all of the problems. The problems.

Kate: 20:21

It's like it's like a pinball machine. You have a ball and you're flicking five balls hoping one of them will land.

Rick: 20:29

Yeah, so that's how risky planning is yeah, and that is what leads into all the other things that we as an industry get criticized for, like delay and cost. If the planning say we didn't have to apply for planning, it was just set out like it is in denmark, on this piece of land you can build that. You just file the forms, you get to build it. There's no asking can we build the thing that you've already zoned the land for? If it was like that, we would have a lot less problems, right, because we would be able to scale up and down supply of housing very quickly.

Kate: 20:58

Absolutely Like if it was more prescription about how many floors can be built, what areas, and so what density, what scale, what height. If things were, if the planning system were more prescriptive, then everybody, including all of the neighbours, would be clear about what can be built and where.

Rick: 21:26

And it's not prescriptive. And you know I don't want to turn this into a planning chat, but you know the new Planning Act is I don't think the president has quite signed it yet, but it's been sent to the president for signature. Even that, I mean, to me is a massive missed opportunity, because it only happens every 20 or 25 years that we reform the planning laws. It's not going to make plans prescriptive as well. It's still going to delegate an awful lot of power to local authorities to just willy-nilly decide that, oh, we don't want tall buildings, we don't want high density, we don't want this, we don't want that. So you still go in to what is essentially a game of roulette in the planning system. Yeah, hoping that the outcome is economic for you to be able to build.

Kate: 22:09

Yeah, I think, I think a lot of it. I think the county development plans have a lot to answer for. The county development plans set out all of these recommendations and criteria and when you go to apply for a planning permission you can be judicially reviewed for MC. I'm so sick of seeing. Do you know what MC means? Do you know material contravention?

Rick: 22:32

MC, MC, MC. Material contravention is alright.

Kate: 22:34

Material contravention of the county development plan. So when a county development plan, if you do anything that is not in alignment with the county development plan, you can be judicially reviewed and I think that so I was actually reading on the currency last night there was a wind farm that was that has just been refused by onboard Planola in County Donegal. That could have, if it were built, could have powered 80,000 homes, but it was refused by the board because of a discrepancy in the county development plan. The county development plan, when the wind farm went through planning and had started their planning application, it was zoned as open to consideration for wind farms and the county development plan had has lapsed and now it's not open for um, the zoning has been taken away, but I mean that's not even contravening the development plan.

Rick: 23:34

The fact that it was allowed lapse is is a disgrace there's so many inconsistencies in in we'd be here.

Kate: 23:40

We'd be here all day talking about them.

Rick: 23:41

I don't want to use up the whole I don't use up the whole thing, but like it's a, it's a huge issue. Judicial reviews everybody in the development industry has been dealing with this and we're all sick, I know we all. It's like group therapy we all sit around and we talk about, we tell our terrible stories of our judicial review trauma. You have a particular uh site I'm not going to say where it is big, big site accommodating a lot of people. You got planning and there was a judicial review lodged. That's really not the interesting point, right? The interesting point to me was what happened during that process. Are you able to talk a little bit about that and tell us how all that unfolded?

Kate: 24:21

Sure, just before I get into that point, which I know you're alluding to, what the importance of that project was for us as a family business. The project that you're describing is in South County, dublin. It is 200 units, 200 apartment units that our entire team should have moved on to. So that has screwed up our pipeline. That was the next project, so it is difficult to have a sustainable business model where you have staff that are incredibly talented and you need to provide job security for these people when your project and your pipeline is suddenly stopped.

Kate: 25:07

So JORD, the project was JORD and we received planning permission in 2021. We bought the site in 2020. So we have had that project hanging around on our balance sheet, paying interest on that land and that site since 2020. So you can imagine the cost of that project. To us now it's shocking. And the project was judicially reviewed. We received planning permission in 2021. Three years later. So the case was heard by the courts in 2023, in February of 2023. So it took three years to get through the courts. The other problem with that, before I get on to the granular part, is that the planning permission only lasts for five years.

Kate: 25:57

So we don't have time to build it.

Rick: 25:58

It doesn't pause, and that's something that people maybe don't also appreciate that you get a five-year planning permission, you get judicially reviewed. The planning permission starts when you get granted it, and if it takes three or four years to get through the courts, tough luck.

Kate: 26:12

It's withering.

Rick: 26:12

It's withering and the vagaries of the rules around planning timelines. If you don't have the building substantially complete before the expiry of the planning permission, your planning permission has lapsed. Now there is no definition of substantially complete anywhere, and that is down to individual councils, and in fact, individuals within the councils form an opinion as to what substantially complete is. Ergo, that situation never arises.

Rick: 26:42

Nobody ever goes and builds something right up to the end of a planning permission, assuming that the council will be happy with it so if something doesn't start within the first two and a half years of the planning, it's not happening at all and you won't get funding for it either.

Kate: 26:57

Well, that's so yeah, you won't get funding, you can only apply for the extension to the um, to the duration of the planning permission until the last year, and no bank will fund it with that risk.

Rick: 27:10

And there's a predisposition to refuse extensions unless you're under construction, right? Because we had this recently with Dunleary where we tried we had a site that had planning and we were trying to get a different planning. We got that it was J-Ord. We tried to extend the previous planning because we were just going to go build that as our fallback, dunleary, refused it. We took a judicial review against Dunleary's refusal and Dunleary fought us all the way in the High Court to make sure that this planning expired. So if any of the guys there from Dunleary that are listening to this, congratulations. You did successfully prevent the construction of a couple of hundred units again. So hopefully you're proud of yourselves. But that's the scenario that we all find ourselves in with this stuff. It's absolutely insane.

Kate: 27:58

The really insane thing about it is the personal vilification that can happen. So throughout this JOR period, at the very beginning of the JOR, when the JOR was lodged there was actually we discovered that there were posters going around the local area with my face on it, my sister's face, my brother, the mezzanine finance company who funded the development as well, and it was saying Kate Rattigan, building for the Cuckoo funds and the Vulture funds. Here's the price of these units. They're going to be 600,000 each, and and it was. It was plastered all over the local area. We don't know who did it, or I bet you have a fair idea.

Rick: 28:48

who did it?

Kate: 28:49

Yeah, I mean you can make assumptions, I'm not going to say that but it's that vilification and that idea that the property developers are evil. I mean that's why I referred to Winterbrook. As home builders, like we're delivery focused, all we want to do is build houses and hand the keys over to a customer. I mean, why is it so hard?

Rick: 29:10

And you're goddamn needed and we're all needed and this, you know. This really gets my goat, because that's where this has come to right, that the enablement is on the political class. They have permitted people to feel so entitled that they can go around preventing anything from being built in an area where they happen to live because they feel it is their area. So they're a feudal lords to the point where they go and put posters of people up like trying to intimidate you. In any other circumstance there'd be calls for a police investigation for that, yeah. And the fact that this, this goes on and it is a South Dublin thing I live in South Dublin. I get things through the mailbox all the time. You know. This vitriolic hate of the idea that something, something would be built anywhere near me in my area is insane. It's insane that this has been permitted to get, to get this far.

Kate: 30:08

It is insane. I think, when you have these systemic problems happening, that we need to take a pause and go. Whoa, I mean, this is halting delivery of housing units for Ireland. It's stopping our economic growth, our FDI investment. It affects the economics of Ireland and people shouldn't have that power. And when they do have that power, something's broken, really broken, so it needs to be fixed Like. My view on it is that we have too many points where third parties can have their say in what a housing development looks like and whether or not it should receive permission. I think people should be involved at the plan making stage and then only the odd case should people have something to say about it. I think there's too many times where people can, where people can make submissions and stop development happening.

Rick: 31:07

Yeah Well, people don't want their say, they want their way, and I think that's the real issue with this. If it was just about people say, they would have their say and then they would walk off quietly when they got what they wanted. They didn't get what they want, but that's nothing. It's not what it is. They want to prevent everything. It's not just housing, it's everything. It's wind farms, it's solar farms. I mean, the amount of objections to solar farms would blow your mind. They are down on the ground. You cannot see them, you cannot hear them, and people are mobilizing against them because they don't.

Rick: 31:37

You know, one of the things is using up good farmland that could be farmed by a farmer, right, batshit, crazy stuff. And the fact that we permitted is insane. If we did that with any other aspect of public policy, imagine if the government wanted to raise taxes and they said oh, we're going to let everyone have a view on it. They just announced multi-annual funding for RTE 725 million euros. Imagine if they said okay, well, this is what we're going to do. We're going to fund RTE, but if anybody wants to stop it, by all means pay your 20 euros, hire Fred Logue and you can have a judicial review and we'll delay it for three years and we'll just turn off the television in the meantime.

Kate: 32:13

I mean, you can't make everyone happy and you have to go with the greater good and what's the benefit to society and the greater good? And these things shouldn't be allowed to happen.

Rick: 32:25

Yeah, Well, there we go. We've solved it all in that case, so we don't need to worry about that.

Kate: 32:30

I mean, we're not going to solve the planning system, and I think I'm sick of talking about the planning system, so let's assume the government please fix the planning system for us and make it work. Okay, so let's just park that for a second and talk about the funding. Winterbrook has a building team. We have the capacity to deliver hundreds of units a year and we should be doing that. And what's one of the key drivers stopping that growth? Well, first of all, we've been bidding on so many sites that have planning permission and, honestly, it is a race to the bottom. It's a race to the bottom because we're all bidding over the same land and the other thing is you're dealing with someone else's design that doesn't make sense for you, and the thing that someone like ourselves would bring is we bring value in our own flair on what kind of homes we build and the design and the quantity. It's all unique to us and the viability and what we apply for makes sense to Winterbook. But when we're building out someone else's design and number of units, it probably doesn't suit us and it really is a race to the bottom.

Kate: 33:45

So what we need to have is our raw material, which is the raw material in our case is land, because we need four or five planning plays on the go. The cost of that land is really expensive. Our business is a hugely cash and equity hungry business. So say we spot a portion of land and we need to put in about 35% equity into that deal, which say that's about three or four million. So every 40 unit scheme a builder like us needs to put in about 3 or 4 million. Multiply that out by about five, those five schemes I talked about. I mean I find it hard to believe how many small and medium businesses are that have that amount of money on their balance sheet. So a fix would be having the state come in as an equity partner to um assist the purchase of um of zoned land. But not but you don't have the permission.

Rick: 34:42

Yet um banks don't lend on zoned land anymore and that's a problem well, you can understand why they don't, given what we just discussed, right, because the difficulty for them they take a view on say, well, we're going to come in and buy and lend on his own land. What's your plan? We say, oh yeah, we're going to have planning in two years. And they say, okay. And then five years later, right, you're taking down the posters of your face all over, say county dublin, and the bank are saying has that planning working out for you?

Kate: 35:09

well, it's frustrating because if you have a solid business plan where you've spotted a site like we're looking at, a site in Wicklow and it has a capacity for, say, 100 houses, it is perfect. We know how to apply for permission where we stick within all the rules. But it is that question. But the state or an entity, a banking entity, has to take that risk with us and come on the journey. That's the problem.

Rick: 35:40

It's a big issue. I mean, one way that the government has of solving that without contributing equity is just by fixing the frigging planning system, because then the banks will lend against their own land again. If it was relatively sure, as it was before I mean, it didn't used to be like this no, no, we used to be able to buy zone land and get funding on it. Yeah, because we would get planning.

Kate: 35:58

It's a fundamental problem.

Rick: 35:59

It might take a year, but you would get planning. Now you've no idea if you're getting planning right. Could be, could get it, could be. Five years later. You're still. You know that uncertainty is an issue. The funding is stemming from that right. It's not like that the bank suddenly lost their appetite. They are looking at it and going this is bananas. Because it is bananas, the risk profile is too high. It's crazy, yeah, but it's a good idea.

Rick: 36:24

I mean the government maybe would argue that they are doing that right, Like that they are via the LDA. I have my own views on the LDA. I via the LDA, I have my own views on the LDA.

Kate: 36:34

I don't want to hear them.

Rick: 36:40

Yeah, I mean, I've said it. I don't think it's a very good idea for the state to be being a house builder, because the state has proved over the last 100 years and every state has that it cannot get value for money out of anything. But the LDA are going around buying land, right, they're taking state lands that have been perhaps underused and are attempting to get planning permission. I guess they're about to find out what we've all been dealing with for the last decade.

Kate: 37:01

But I think the state have been incredibly important in the supply of housing and affordable social housing. I mean, that's all I hear builders like us are doing. Well, it's the only show in town now. I mean, if's all I hear builders like us are doing.

Rick: 37:16

Well, it's the only show in town now. I mean, if the state weren't doing what they were doing, we would be back to 2009,. 2010 in terms of the construction industry would stop Because and again the state have chased all the private capital out of the market with lit pitchforks. As I said to Kate English, if you chase the private money away, then what do you? Got left with right, you're left with public money.

Kate: 37:37

Yeah, Well, I think, I think the public money is really important and they have been. They have been shouldering the supply and without them and forward fund deals, I don't I think a lot of businesses like ours would be out of business and I think they're really important, but the we shouldn't forget about. So say, for example, in 2050, the population is meant to grow. It can grow. The projections are between six and seven million. Like that's a lot of people. And how much funding is needed for seven million people in 2050? It's been projected to be predicted to be 20 million and the state only provides three billion of that. It's been projected to be predicted to be 20 million and the state only provides 3 billion of that. We need that institutional capital to come back into the market to lend us the other 17 million. We'll never get there without 17 billion.

Kate: 38:25

Sorry, what did I say?

Rick: 38:26

Yeah, you said million.

Kate: 38:28

No, it's billions.

Rick: 38:28

17 billion euro per annum per year For the next 25 years.

Kate: 38:32

Is needed. Yeah, annum per year for the next 25 years is needed. Yeah, so we, we, we cannot um, we cannot, uh, scare away we need the institutional money back in the market.

Rick: 38:41

We need we need half a trillion euros of institutional money over the next 30 years and we have not been doing a whole pile to incentivize that money to come in here well, it's a fundamental flaw, then we need to be incentivizing institutional capital back into the market.

Rick: 38:54

Yeah, because we just, you know and this, this is one of the other things that goes on is that the magic bean salesman, as I call them, talk about the state doing everything in the state should be and there should be no private development, like it's absolutely fanciful. It's, it's a third of the annual tax. Take that the state has. Uh, just on housing, right, that's what it would be. So that means we're not having a healthcare system or we're not having an education system. We're certainly not having capital spending on any single other thing. So it's nonsense. It's a nonsense argument. You need the private money. It's the same as the sky being blue. It's just a fact, and the fact that it's not happening. Well, anyway, that tells you what you need to know the fact that it's not happening.

Kate: 39:37

Well, anyway, that tells you what you need to know. Yeah, I, I think the private market and the um having homes for sale to the private uh market is is is being undersupplied and it's a miss. So, say for, for winterbrook, it would be a a key ambition to provide houses to the private market. You know, I I find the institutional investments so selling apartment blocks to the institutions it does come with their problems though, too. I think yield plays are difficult. So, if we can get back to house building and that's why we need to zone the land, the green, the green sites for home builders to build the homes I think yield plays we would like to be zero to 20% of our business, really, because you um like we, we built a project out in Dockie, um we've, we just uh handed it over in September of last year and um we we entered into a forward fund deal with we sold it to Irish Life and we agreed the price back in 2020 with them and so many things. You sell it on a yield.

Rick: 40:49

So many things change.

Kate: 40:50

So many things change, the interest rate changes. For both sides it mightn't be such a good deal. So it's tricky. They're tricky projects and apartment projects. As we all know, you can't phase an apartment scheme. They're extremely expensive to build. You need a lot of capital up front.

Rick: 41:14

um, there's a lot of regulation yeah, I agree with you and the. The regulation around apartments has been has just driven the cost up and it's kind of can't do it now, right yeah, it's very difficult to make money at building apartments I mean the last block of apartments we built.

Rick: 41:30

We lost money and they were in dog actually, as you know, around the corner from you. We you know beautiful thing, it's winning awards but we lost money. So I won't be doing that again. Okay, magic wand time. I want to hear you. I know that you have listened to the podcast and you know that I give people a magic wand, so I'm expecting you to have a good one. What I'm giving you? A magic wand here are the rules, because everyone likes to break the rules a lot. It's one thing and it can be anything, but it can't be like you can't change, like human nature. So you can't magically make the residents of South Dublin be pro-development, because that's not going to happen. Right, it's not that magic. You can change a policy thing or something like that, but it can't be completely fanciful what you got, yeah.

Kate: 42:12

I think my magic wand moment would be to point out that there's too much bureaucracy in the system. We need to simplify everything. The policy, legislation, everything has got too complicated and we need more action and simplification. I know that sounds very kind of aspirational, but there's too many inquiries on inquiries on the inquiries, and everything is taking too long. We need key decision makers to make the key decisions.

Kate: 42:42

Why are there so many different numbers out there, like we need 33,000 homes, we need 50,000 homes, we need 80,000 homes, coming from disparate parts of organisations. We just we need to be really clear, have clear data. None of the state agencies are collaborating. Everyone is in these little silos. I think we need to join up our thinking between infrastructure, between land zoning, between population projections. This is a major kind of bugbear for me. I'm 40 years old and since I've been born, there hasn't been one major piece of infrastructure built or created. You may have an overground Lewis, that's about the extent of it and like the DART is in operation for 40 years this year, but that went on a train line that already existed. It wasn't that revolution. I don't think we've come up with revolutionary ideas to achieve our growth and I think bureaucracy has stopped that we come up with the ideas and then we don't do them.

Kate: 43:51

Yeah and we don't like we have have major infrastructural problems. We have the Dublin city is creaking, Even if we did meet supply, the infrastructure is not there to support the growth.

Rick: 44:07

And then when we tried to deliver it, I mean the Metro, right there was the farce that they're like unveiled the plan for the metro, and then there was a GAA club in North Dublin. It's like nope, we're not moving, so reroute the train line, you know.

Kate: 44:21

And this is the kind of stuff that we go on with, right and like the Dublin is about to run out of water, not about to, I mean, it's creaking at the seams. So if you go and you do get that lucky permission Irish Water Iskair might turn around and say we don't have the capacity to, and they're trying to get it by taking it from down west and there's opposition to that.

Rick: 44:40

Yeah well, I mean that's what is incredibly.

Kate: 44:44

It's a scheme. It's a plan that we need to build to bring more water to the Dublin region, and they have to. It's called the Water Supply Project for the eastern and mid and eastern regions of Ireland and they need to build a 170 kilometre pipeline from the Parteen Basin in Tipperary through to Pemount in Dublin. But without it the 85% of our current water relies on the Liffey, so it has to be built and it can't be ejected to.

Rick: 45:28

But it will be. Yeah it probably will be.

Kate: 45:31

And then we also have an issue with wastewater, so we need more wastewater reservoirs. Another insane thing is I saw another notification of E coli in the water there a day or two ago. So every time there's a storm in Ireland there is a sanction whereby you can't swim in Dublin Bay because, basically, the rings and water treatment plant is overflowed Like that just shouldn't be happening.

Kate: 45:59

So my magic wand is to reduce the layers of bureaucracy in the entire system, from the national planning framework down. Someone needs to say here are the national roads that need to be developed. We use the existing lines that are already there, be it roads or whatever. Put on more highways to either side of it. Build more train lines around along the existing train line pattern. We need to use what's there, but we need to give it more oomph.

Rick: 46:25

Well, you heard it here first. Kate Radigan calls for dictatorship. I will take the first shift Benevolent dictatorship, right yeah, an infrastructure czar, we should. I mean, jokes aside, we should have an infrastructure czar. Right, housing is infrastructure. This idea that we have a Department of Housing, your Department of Rural Development, we've got a Department of Transport this is nonsense. There should be a Department of Infrastructure. Housing is one of those things. There should be four regional plans for the four provinces, not local plans, regional plans, ireland would fit inside.

Kate: 47:00

Lake Ontario and not county plans. No, there should be no county plans.

Rick: 47:02

Ireland would fit inside Lake Ontario, right? That's how small it is. And we have, you know, 26 regional authorities. In fact we've more because some of them have two, right. And then you've got Cork, that have a city council and then a county council, and Dublin has four.

Kate: 47:20

It's too many. The whole system has just grown. It didn't used to be like that either.

Rick: 47:23

Right, when I started it was just Dublin city council. I mean, that's not. There was Dublin. It's one county, it's the smallest county. There's no need to have them four. We have four sets of planners, we have four sets of everything and yet can't do it right, like the HSE. It's the same thing. We just keep adding all of these layers of bureaucracy as you say, and then you have. I'm wondering why things don't get better.

Kate: 47:47

And I think the government are aware of it, because they had to bring in the OPR in 2019, I think it was the Office of the Planning Regulator to regulate that the policies that have been mandated through the national planning framework actually trickle their way down to the local authority level.

Rick: 48:11

But even the OPR has been a disaster, because it comes in and it just blindly says we're following the NPF, even though everyone knew it was wrong.

Kate: 48:20

The NPF doesn't have the rights. It's moved on. It has the wrong information in it.

Rick: 48:24

Everybody knows, but it's just. No, those are the rules. It is akin to what was going on in the Soviet Union that you just follow the rules from the top and those are the rules, and nobody. There's no allowance for somebody to say, hey, let's be smart about this, we know those things are wrong, so let's have a bit of flexibility. Yeah, no, can't do that. So if we're going to have that kind of rigid system, we're not going to get out of this.

Kate: 48:50

I know I agree with your point that we need one group that sits and monitors, that has independent voices monitoring the system and that comes up with the key moments of infrastructure that are needed and orchestrate the whole thing as the orchestrator of an orchestra.

Rick: 49:11

Right, exactly, a lady sitting at the top of the Department of Infrastructure. I think we'll get a lot of stuff done, yeah. Right, exactly, a lady sitting at the top of the Department of Infrastructure.

Kate: 49:19

I think we'll get a lot of stuff done, yeah, and I'm there for it, right, well, application received.

Rick: 49:23

Kate, thanks a lot for coming in. That was a good chat and we've just gone over the hour, which is meant to be our hard limit, but we sometimes breach it. I find it very interesting. I think your points are are are all on the money. You know, small development businesses need uh are part of the solution here. We actually produce most of the housing output even though we don't get any of the headlines. And if, if we don't get the raw material, you're, you know, karen and glenn bay, in fairness to them, double the travel they're out. But it's not enough, right, you need the small guys, and I want to thank you and your family for your contribution, particularly to Francis. Over the years it's been amazing. You've done some amazing projects and if we had more setups like that, we'd be in much better stead. So thanks for that and thanks for coming on and chatting to us and giving us your views.

Kate: 50:19

Thanks a lot.

Rick: 50:23

The Build is produced by Carrie Fernandez and me, Rick Larkin. Music is by Cass.