The Dirtlease staff just returned from a literary tour of Ireland. We read to a packed hall at The Printworks, in Dublin Castle. We mansplained to a writer’s group in Crumlin. We partied at Connor McGregor’s pub. We turned down sexual advances from Eve Hewson. We swam in the snotgreen sea at Forty Foot. When we passed a sign that read, ‘Drink Canada Dry’, our intern said, ‘I did’.
When one of us saw a bunch of structures that looked like mobile homes on a clear piece of land, he asked the old lady sitting next to him on the train, ‘What do you call those?’ She said, ‘Mobile homes’.
‘Son of a bitch’, the staff member said. ‘We have those in the States, too.’
‘Why are you here, then’, the old lady asked. ‘Do you live here, or are you visiting?’
The staff member blushed and said, ‘A story of mine was published in an Irish magazine. I came over for the launch.’
‘And what magazine is that’, the old lady asked.
‘Oh, you wouldn’t have heard of it.’
‘Are you saying I can’t fecking read?’
‘I didn’t say that.’
‘You just fecking did!’
.
A member of the staff travelled to Kerry, to visit a relative. He mistook the 150 bus for the 15 bus (he has Kerry blood) and ended up in Belfast. We caught up with him recently to ask him about his trip.
Staff Member: Is this thing on?
Dirt Lease: It will be once you take the twinkie out of your mouth.
SM: I think there are opportunities for investment in residential rental real estate in Northern Ireland.
DL: The feck you say.
SM: For real. Real estate in Belfast is a political play, and possibly an interest rate play. It is also arbitrage.
DL: Arbitrage?
SM: There is a housing crisis in the Republic. Like New York, Dublin has become Disneyland for oligarchs, hedge fund managers and tourists. There are statues to James Joyce all over the city, but he couldn’t afford to live there now.
DL: Is this true outside the capital, too?
SM: As I understand it, yes. Housing is unaffordable in smaller cities, like Cork, and also in rural areas. My uncle –
DL: Your uncle is a special case.
SM: Buinneach dhearg go dtigidh ort![1]
DL: Can we continue?
SM: Housing is cheaper in the North. A house that would cost you 800,00 Euros in the Republic might cost you 250,000 pounds in the North.
DL: But that’s not arbitrage. Arbitrage is costless gain. It is selling gold in London and buying –
SM: I know what arbitrage is, you dryshite.
DL: For arbitrage, you need a pricing disparity between apples and apples. Real estate is never fungible. Real estate located in two different countries is apples and oranges.
SM: The Brits say ‘apples and pears’.
DL: The Brits wallpaper their ceilings.
SM: Housing in the Republic and housing in the North are not quite apples and apples, but they are close. Even after Brexit, the border is an imaginary line. People, goods, services and capital cross it as if it weren’t there.
DL: There is little industry in Belfast, other than Troubles tourism.
SM: There is plenty of industry in the Republic. By some measures, the Republic is the richest country in the EU. With remote work, an attorney, a software engineer, a banker or a consultant based in the Republic could live in Belfast and commute a day or two a week.
DL: How is it an interest rate play?
SM: The dollar is strong against the pound. That is because the Fed has raised interest rates to counteract inflation. Currency prices are linked to interest rates. When the Fed begins to loosen policy, the pound will appreciate against the dollar.
DL: But rates could go down in the UK and up in the US, too.
SM: That is a risk. It is not arbitrage. Arbitrage is –
DL: Oh, fuck off. I know what arbitrage is.
SM: Sorry. I am used to speaking with Kerrymen.
DL: How is it a political play?
SM: I would not be surprised if the North joined the Republic within a generation. No rational Northerner, Protestant or Catholic, would not want union with the Republic. The Republic is a rich country and a well-functioning democracy. The North is a backwater. England is sick of propping it up.
DL: Many Protestants in the North are not rational.
SM: True. That is a risk.
DL: By the way – this is Dirtlease. We run stories about the manufactured housing industry in the United States. What does this have to do with that?
SM: Everything, you gobshite.
DL: Elaborate.
SM: If you walk around Catholic areas of Belfast, you see Palestinian flags and murals advocating solidarity between the IRA and the Palestinian cause. When I walked into an Irish language bookstore, I saw a sign that said, ‘We sell Palestinian flags and keffiyehs’. In the Protestant parts of town, you see Union Jacks and Israeli flags. It is a proxy war.
DL: Why’s that?
SM: Best I can tell, it is a tribal thing. The Republicans sympathize with Palestinians because they see themselves as a small people that has been colonized and maltreated by a powerful state. I also think that the IRA received training from Palestinians back in the day. The Protestants support Israel because the Catholics support Israel’s perceived enemy. The enemy of my enemy is my friend. You say white, I say black. You say stop, I say go.
DL: So?
SM: So, that is how the manufactured housing industry is regulated in New York State. Legislation and regulation are motivated by tribalism rather than rational policy considerations. If we brought together a group of representatives from tenant groups, from the industry and from Albany, we could craft a solution that works. I am thinking rent regulation indexed to inflation, grants for infrastructure upgrades, a rental insurance fund that everyone – residents, owners, taxpayers – pay into, and an alternative dispute resolution process that provides fast, efficient, and binding outcomes. Instead, the fecking eedjits in Albany just try to stick it to the owners. That hurts everyone, except for the politicians, who count coup at election time.
DL: What do they say about the Irish?
SM: All kinds of shit.
DL: The one about the big house.
SM: If an American sees a guy with a big house, he says, ‘I’m going to work hard and buy myself a house like that’. An Irishman says, ‘I will be happy when that house burns down’.
DL: Interesting you should say that. It seems to me that the Nakba law of 2019 was an effort to burn down the house. Instead of helping the most vulnerable sector of our population by supporting the people who provide them with affordable housing, the sponsors of the legislation merely tried to punish the owners. Both owners and residents suffered as a result.
SM: They took their cue from the UVF.
DL: The UVF are a bunch of thugs.
SM: Yes, they are.
DL: Can you say more about Belfast housing as a political play?
SM: Union with the Republic is only one issue. The other is domestic Irish politics. I understand that Sinn Fein has a plurality in both the Republic and in Stormont. This has not resulted in real power for them yet, because the two parties that have governed the Republic to date have formed a coalition to stop Sinn Fein from forming a government in the Oireachtas and England calls the shots in the North. However, Sinn Fein is quite popular and elections are coming up.
DL: So?
SM: Other than a unified Ireland, Sinn Fein backs what we would call a platform of progressive domestic policies. These include public health care, free education and aggressive measures to tackle the housing crisis. I understand that one way they would like to make housing more affordable is by building more. Increasing supply is a rational way to solve the problem, but they might impose regulation similar to the 2019 Nakba legislation in New York State. You think Skoufis is bad?
DL: I think he is somewhere between Saddam Hussein and Vladimir Putin.
SM: Well, he wasn’t a terrorist thirty years ago. You think the progressive Democrats in Albany are a problem, try Sinn Fein.
Political risk is the only risk you can’t hedge. It is scarier than deadbeats, meth heads, water leaks, freeze-ups, septic overflows, hurricanes, earthquakes, tsunamis, snakes, wild fires, bank closures, termites, sink holes, sexual harassment charges and interest rate hikes. Nevertheless, it is a risk you have to live with, if you want to own a big immovable asset.
DL: So – are you going to invest?
SM: We’ll see. I want to consult with my uncle in Kerry before I make a decision.
[1] May you have red diarrhea.
You made good use of your week in Ireland.