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This Ireland… 2. Rented property, metered televisions… and er… spying on the tenants. November 16, 2007

Posted by WorldbyStorm in Housing, Social Policy, This Ireland.
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One of the weirdly counter-intuitive aspects of the current housing situation in Ireland is the way in which the near-impossibility of acquiring homes has led to something of a golden age for the rental sector. Well, a golden age for those who own rental property. Rents are rising as lack of supply leads to increasing demand. Ah yes. A wondrous time. And as with all such times certain oddities emerge…

Take for example the news on Wednesday.

Reported in the Irish Times under the heading: Landladies ordered to pay students €115,000 in damages

The details are as follows…

Two Dublin landladies have been ordered to pay damages totalling more than €115,000 to 10 students who were tenants in their house after the Circuit Court found they had kept the students under secret electronic surveillance.

The tenants, from Mayo, Galway, Donegal, Armagh and Monaghan, rented rooms in 46 Mobhi Road in Glasnevin from Rita McKenna and her daughter, Edel, in 2003 and 2004 while studying at the nearby colleges, Dublin Institute of Technology, Dublin City University and St Patrick’s College in Drumcondra.

While the conditions were as good or as bad as one might expect there was a lovely touch…

The students paid €80 a week for a shared room and €90 for a single room, and an extra €5 for a meter-operated television. The McKennas lived in a separate part of the house. Nine bedrooms in the property were rented out, mostly to students.

But television, metered or unmetered wasn’t the problem.

The students became concerned in late 2004 that their conversations and activities were being monitored when the McKennas referred to details the students had discussed in private in the house. When they raised the issue with the McKennas, the students were evicted.

And as the judge noted:

the tenants were “unceremoniously evicted with less than four hours’ notice and left to their own devices with their belongings in black bin bags and boxes”.

The case threw up the surprising conclusion by the judge that…

…the evidence in the case left him “in no doubt whatsoever that the defendants had kept these plaintiffs under electronic surveillance”.

He continued that…

… he could not say whether it was audio or video surveillance or both, but he was concerned that yellow wires found in the house were of the international standard used for video recording.

This conclusion being drawn from…

…wires were found during a search on December 3rd, 2004, when Ms Hegarty’s solicitor and a garda called to the house on the back of a court order. Solicitor Fergus Gallagher and Garda Alan Sherlock found themselves locked out of the house by the McKennas when they arrived.

A very very unwise thing to do. The Judge…

…found the students’ rights to privacy had been infringed and he awarded them damages varying from €7,500 to €12,500 each.

Still, one has to ask, why on earth were the landlords – or ‘ladies’ (and isn’t the original an incredibly revealing word when one thinks about it?) spying on them in the first place and what led them to believe this was appropriate behaviour in 2007?

But then, why look for explanations? The narrative of ‘ownership’ and the narrative of control are far far too close together sometimes. It’s not just libertarians of the anarcho-capitalist variety who believe that signing a contract invalidates the most basic rights to privacy and autonomy. Or rather that contracts work only in one direction, that direction being from the person who owns to the person who does not. A very basic power relationship played out before the Irish courts. Call it capital, if you wish. But sometimes – when it overstretches itself and seeks to dominate the entirety of the social space – capital loses.

Donald Horne once wrote about how in liberal-democratic societies, where, in varying degrees, the ‘myths’ of capitalist enterprise become ‘legitimations’ of the social order…’. He also noted that ‘most (capitalists) are not risk-taking entrepreneurs and controllers of small businesses, but investeros, or speculators in shares, in real estate… how they gain an income is not honourable by many of the standards of ‘the traditional virtues’, nor by the standards of utility of the free enterprise ‘myth’ ‘. It’s funny, isn’t it, how rented property points up this sense of ‘not [being] honourable’ if only because this is the sharp end, sharper still even than the work context, the domestic, the place where people live and seek refuge. But this is, at it’s most primitive, the place where the transactional aspects are also most evident, unmediated by mortgages or other.

Having been that soldier as regards renting my sympathies are with the students. Very definitely three cheers for them on this one… And fair dues to them for actually going to law. If we don’t try to take on that sort of abuse of power (and this incidentally holds as much for those who believe capital works well – after in the contemporary period all systems requires self-evident ‘legitimations’ as to utility and fairness however much they deviate from that in practice) how will we ever know what can be achieved?

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1. ejh - November 16, 2007

1. most (capitalists) are not risk-taking entrepreneurs

Quite.

2. I think there are a couple of reasons why it is easy, not only for people to do this, but for other people to think it’s OK.

One is the idea that when you are on somebody else’s property, or working for them, you are on their property, or using their time. Because they have the right to maximalise the output of that time and property in their own interest, they can do essentially what they like, in their own judgement, to further their interest in their time and propety. Moreover, because it is their property, they may dispose of it as they see fit.

The other is the idea of choice, that because you always have the ability to go elsewhere, you have no real grounds for complaint – if you don’t like it, go somewhere else.

3. The general point is that market economies aren’t simply places in which we freely exchange our labour for the best sum we can obtain for it, whatever teenage libertarians (or for that matter comfortable intellectuals from the professional classes) may believe. That’s part of the truth but a rather larger part is that it’s also an arena of competing interests and power relationships in which the ability to hold and suppose of one’s own property is not, in fact, remotely an adequate guarantor of personal freedoms and often (though not always) actually works in the opposite direction.

In this instance the law courts took a dim view of the actions of a property-owner with relation to their own property. Good. But it wasn’t capital’s urge to personal freedom, but restrictions on the rights of capital, which bade and enabled them to do so.

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2. Eagle - November 16, 2007

To be honest, I’m not even sure I follow what’s been said above, but it strikes me that when you rent a place to live that there are certain understandings that don’t need to be written down in a contract. Things can be assumed. One would be that the owner has no right to use electronic surveillance to spy on the tenants. That the owners went against these basic assumptions seems to me, as a violation of the contract under which the students rented these rooms.

If the owners had explicitly mentioned that the place was wired so that they could listen in or watch the students’ dwellings that would have been different to my mind. When there are terms of the contract that are not within the ‘normal’ assumptions they should be written into the contract.

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3. Eagle - November 16, 2007

Donald Horne once wrote about how in liberal-democratic societies, where, in varying degrees, the ‘myths’ of capitalist enterprise become ‘legitimations’ of the social order…’. He also noted that ‘most (capitalists) are not risk-taking entrepreneurs and controllers of small businesses, but investeros, or speculators in shares, in real estate… how they gain an income is not honourable by many of the standards of ‘the traditional virtues’, nor by the standards of utility of the free enterprise ‘myth’ ‘.

Surely someone who invests in shares is a “risk-taker”, no? I bet if you found someone who’d invested in Citibank last year they’d assure you that there’s a risk in such investments, even in so-called “blue chip companies”.

And, even land investors can lose their shirts. We may be about to witness this in Ireland on a grand scale. Talk to those Japanese property investors who bought land like it was evaporating back in the late 80s and you’ll hear that land can be a very risky investment.

In fact, an argument can be made that it’s the government’s intervention in the real estate market that makes it seem less risky. All those planning regulations that limit the supply of land for development create an artificially high price for land (and, thus, high rents).

And without those investors (risk takers) we’d have no new investment, no new developments, no entrepreneurs, who generally live on other people’s money when they’re starting off.

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4. ejh - November 16, 2007

Surely someone who invests in shares is a “risk-taker”, no?

Well they can be, but it partly depends on how much they’ve got, doesn’t it? If you put all you money on the bob-tailed nag, then you’re taking a risk all right. But if you’ve already got a million and you put a small proportion of it on the bay, then you’re not really risking all that much. And most investment comes in the second category rather than the first.

All those planning regulations that limit the supply of land for development

So that people can get on with their lives without being in the middle of a building site all the time – as I am, living in a part of Spain where developers can practically do what they want. Incidentally there are three million empty homes here and yet development continues apace and the price of property is yet to fall.

If the owners had explicitly mentioned that the place was wired so that they could listen in or watch the students’ dwellings that would have been different to my mind.

Well would it? How much so? It could be argued that the tenants could have gone elsewhere. OK. But if landlords are permitted to do this, using that argument, then what happens when, as a result, many or most of them do it?

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5. Eagle - November 16, 2007

So that people can get on with their lives without being in the middle of a building site all the time – as I am, living in a part of Spain where developers can practically do what they want. Incidentally there are three million empty homes here and yet development continues apace and the price of property is yet to fall.

I can’t speak about the Spanish property market, but if there are vast numbers of empty homes then the owners must be making money on them some other way or they must still believe the market will allow them to sell/rent them at a profit. Sometimes property investors are slower to divest than are those who buy shares or commodities, but when the market turns south it becomes a blood-letting.

But if you’ve already got a million and you put a small proportion of it on the bay, then you’re not really risking all that much. And most investment comes in the second category rather than the first.

{I’m not much of a horseplayer and I don’t know what a “bay” is, but I’ll guess.}

If all you put is a small portion of your wealth at risk then all you get back is a small return or loss. Such people are risk averse. They have made their money and they’re looking for safe investments. Of course that happens. Most often people look for low risk investments as they get older. Want a certain income rather than the opportunity to earn a big reward.

However, when the risk averse investor invests, even a small amount on the “bay”, he’s still taking a risk. Often he will have spread his investments across many “bays”, but if the market in general tanks he can be badly stung.

If he’s in shares, he’s taking a risk even if he’s spreading the risk around.

Well would it? How much so? It could be argued that the tenants could have gone elsewhere. OK. But if landlords are permitted to do this, using that argument, then what happens when, as a result, many or most of them do it?

Well, if the renters object then these properties will remain empty. I actually think so few people would go along with this that the landlord who tries to implement it will never rent his house/apartment. I don’t think such a practice could ever become commonplace.

Although the fact that so many people seem willing to put web cams in their bedrooms for 24/7 broadcasting might mean that I’m sadly out of touch on this possibility. Maybe a large segment of the renter market really wouldn’t mind being observed in their residence, in which case the landlords would be able to put such terms into leases. In that case, the renter who objects would have to pay extra to NOT be under constant surveillance.

Uggh. What a world.

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6. ejh - November 16, 2007

The first half of your answer strikes me as a purely theoretical one: how the market is supposed to work as opposed to how it actually does work.

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7. Eagle - November 16, 2007

In what way does the market actually work that is in opposition to the theoretical.

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8. ejh - November 16, 2007

Is that a rhetorical question?

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9. WorldbyStorm - November 16, 2007

Sorry, guys, the following should have read…(and this incidentally holds as much for those who believe capital works well – after [all] in the contemporary period all systems requires self-evident ‘legitimations’ as to utility and fairness however much they deviate from that in practice).

I’m being a bit unkind by mapping this to a greater scale – perhaps – but I do genuinely think that there is a problem with some people as regards property ownership and the rights of those who ‘use’ that property. And while I’d completely agree that shareholding can be a risky business, that has to be put into perspective as regards individuals situations…

That’s a dismal prospect you paint Eagle as regards paying not to be surveilled…

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10. ejh - November 16, 2007

that has to be put into perspective as regards individuals situations…

Indeed. Sometimes it seems not to occur to some people that employees are also in a situation of risk – they too can lose a greatdeal of money if they make a mistake, lose their job through whoever’s fault and so on. I would guess that more people end up in dire straits through losing their jobs than through losing their private investments.

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11. WorldbyStorm - November 16, 2007

Mick Taft has a great post on entrepreneurial spirit in the Republic here…http://notesonthefront.typepad.com/politicaleconomy/2007/10/post-9.html

I genuinely admire those who do start up businesses and take real personal risks, but they’re much fewer in this society than the narrative would have us believe…

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12. franklittle - November 18, 2007

Just to add to this. Four girls Mrs Little was in college with lived in that house. Some years ago and well before the equipment was found in 2004 but still, small world.

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13. WorldbyStorm - November 18, 2007

Yikes… Let’s hope (horrible thought) they don’t wind up on YouTube or the like in years to come…

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14. Eagle - November 19, 2007

Indeed. Sometimes it seems not to occur to some people that employees are also in a situation of risk – they too can lose a greatdeal of money if they make a mistake, lose their job through whoever’s fault and so on. I would guess that more people end up in dire straits through losing their jobs than through losing their private investments.

ejh,

I think this goes without saying or at least you’ll get no argument from me. People who lose their job can often find themselves in financial trouble very quickly – everyone needs an income. And, that goes for the highly paid as well as the low paid. Even someone like Steve Staunton could be in real financial trouble right now unless he’s been prudent.

However, it’s equally true that those people in jobs would not have them if someone hadn’t risked their capital to launch the business and/or to keep the business going.

Look, I don’t mind the fact that many people don’t have any respect for those who profit greatly from investing in shares (or commodities or municipal bonds or whatever). To me it can often seem like they’re making money for nothing, but they’re providing the oil that keeps the engine running.

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15. Eagle - November 19, 2007

I genuinely admire those who do start up businesses and take real personal risks, but they’re much fewer in this society than the narrative would have us believe…

That’s because a big chunk of Ireland’s economic success is based on a tax dodge. Just start looking at the transfer pricing issue and you see that loads of people got rich here and the state benefitted mightily from the fact that the EU & US turned a blind eye to this fact. The Wall St Journal pointed this out a while back, but still the federal government (Legislative & Executive) seems happy to ignore it.

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16. Eagle - November 19, 2007

Yikes… Let’s hope (horrible thought) they don’t wind up on YouTube or the like in years to come…

At least we can hope that they won’t be shouting with glee if they become famous thanks to their YouTube exposure, right?

Uggh. What a world.

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17. garythescubaguy - December 7, 2007

Javea Property dot com, a family run business where our 20 years experience of living and working in Javea combine to bring you a superb range of Javea property for sale including apartments, townhouses, villas and building plots.

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