Social housing hit by immigrant investor rules
Chinese entrepreneurs pull out of plans worth millions after changes on residency, writes Simon Rowe
PLANS to build thousands of new social housing units have been put in jeopardy and at least €60m of planned foreign investment has been lost after rules governing Ireland’s ‘invest for residency’ scheme were changed without consultation with stakeholders, a number of senior Irish property sources have claimed.
Property firm Double Property Group, a player in Ireland’s social-housing sector, said the raising of investment thresholds in January this year had rendered the Immigrant Investor Programme “dead in the water” in terms of stimulating investment.
Officials at the Irish Naturalisation and Immigration Service announced new thresholds for qualifying investments in January, raising them from €500,000 to €1m. The threshold was raised after a huge spike in IIP applications in 2016.
NON-EEA investors are granted residency in exchange for investing in Irish social housing, care homes, bonds, stocks, property and enterprises, or for making a large philanthropic gift or endowment.
Approved participants are granted residence in Ireland for two years, which can be renewed for a further three years. After five years, they are entitled to apply for long-term residency here.
Double Property Group has confirmed that about 125 social housing units out of a total of 250 scheduled for delivery under the scheme had been scrapped or delayed after 30 Chinese investment partners bowed out when the rules changed. This represented a loss of €15m worth of investment.
Co-owner Clodagh Robinson said the property firm had plans to build 1,500 social housing units between 2016 and 2018. However, since January, it had seen “a complete collapse of investment from China, particularly for social housing investment in Ireland”.
Chinese investors comprise the biggest grouping of successful IIP applicants to date. A further €45m of investment earmarked for IIP schemes promoted by Deloitte — a major player in the provision of care homes under the IIP scheme — was lost when a cohort of 90 Chinese investors bowed out when they could not meet the new €1m threshold, it is understood. Deloitte declined to comment.
Bartra Capital Property Group warned officials earlier this year that the new rules could have a “catastrophic effect on the volume of applications, FDI and job creation”.
A spokesman for the Department of Housing said it “has contacts with the Irish Immigration and Naturalisation Service in relation to the operation of the Immigrant Investor Programme in respect of applications that may relate to potential investment in social housing schemes.
“The department has not raised concerns in respect of any changes to the operation of the programme. Further, the department has not received expressions of concern from potential applicants in respect of any changes to the programme.”