Re: Re: DDDA / Docklands Miscellany
This is about:
Dragging the property business in Ireland out of the Celtic Tiger and into the modern age.
The modern airplane needs an onboard computer in order to fly. I think that property in Ireland has come to that stage. We need the government to fund a project in order to write the code necessary. We don’t have a building bust in Ireland so much as a cronic shortfall in our ability to gain use out of the large buildings that we build. We haven’t develop a sufficiently robust model for rental in either the commercial or residential sectors. I am not holding my breath for Daft, My Home or any of the developers to come up with these goods either. The trouble is, we have too much financial innovation happening at the wrong stage in the building process. All kinds of weird and wonderful things seem to happen at the point at which debt (read toxid debt) is created. Richard Douthwaite and Feasta can explain that a lot better than I can.
The trouble is we do not have enough finanical innovation aimed at the point where the project is completed and needs to be fully used. In the early history of the Irish state a young fellow named Gordon Clarke wrote the first computer program in Ireland. His job was to cut out a lot of the administration needed in running the sugar beet plants in Ireland. So they invested in some large behemoth computers the size of a room. I saw a print out of what farmers got from this computer. It had to account for all kinds of things. Some farmers were obtaining finanical assistance from the sugar beet plant in order to sow the crop. They also obtained a quantity of molassas from the plant, which presumably was used as cattle feed. They also had to be paid for the beet crop they produced. The computer was needed to calculate and report all of that. Before the computer arrived it took rooms full of people with sheets of paper to do.
A large single tenant is often used in Ireland to disguise the fact that there is basically something wrong with the property management models we are using. When there is a large single tenant the problems seem to go away. But do they really? How sustainable is it for every developer to be producing large floor plates and then hoping to sign up the one tenant. We need robust computer models to calculate costs of floor plate area dynamically for enterprise that will scale up and down in size over the years. We need to provide finance to the business startup, as well as charge for the floor space use. Like we did with the sugar beet farmers so many years ago. Gordon later moved on to work at AerLingus. In those days, it was a really difficult job trying to calculate the value of rapidly depreciating airline tickets. It was another area in which computers found an early application in Ireland and in many countries throughout the world.
Ireland has the opportunity to become a world pioneer in the area of land valuation and property management. We could turn a big negative, into a big plus if we wanted to. We could sell our product to industry and governments all over the world. We need to think big enough. If we made this a project the state should organise we could tackle all kinds of problems. At the moment we have a couple of voluntary think tanks, a couple of university do-good-ers such as Constantin Gurdgiev looking around for a single PHd student in Dublin to do a thesis on calculating land values. This is hardly the scale of enterprise that is going to crack open this problem for Ireland or anyone else. We need the state to get involved and to think much more ambitious. We need to give all of those unemployed financial wizards and software engineers in Ireland something useful and sustainable to do with their lives. While they are still around to do anything.
Brian O’ Hanlon
