James Galvin

I’ve been watching the Sopranos from start to finish since I got some boxed sets last Christmas. Lots to say about them, but I’ll keep it short for now.

Currently, I’m on season 4, and just watched this episode, “Watching Too Much Television”, where Tony and Ralphie devise a “HUD” scam (Housing and Urban Development). Basically, the gangsters buy up some low cost property in a disadvantaged part of Newark, get someone to value them at a high valuation, and then sell them to the government at the inflated price to be included as part of a low-income housing scheme. Tony makes a lot of money out of it.

Fast forward about 12 hours to a discussion I had with my brother yesterday, telling me about this thread on an Irish property website called The Property Pin.

Cork City council has purchased 96 apartments for social housing in a development at Atkins Hall, Lee Road, Cork City for a fee of €25,365,000. This apartment development has been on the market for 7 or 8 years but has had poor sales because it is located in a former mental institution and my fellow Corkonians being a somewhat superstitious lot were none too keen to move into the building. Step forward Cork city council to bail out the developers by buying up all their unsold stock at an average cost of €264,218.75 per apartment.

Apparently Cork City Council’s plan is to house elderly residents in the former mental institution that most Cork people like Rymus wouldn’t live in if they were offered with a free car and a cheque for €300k. And it’s also on a steep hill outside the city with no buses or essential services in the area.

So the council swoops in and pays above the odds for 96(!) apartments that were having a hard time selling. I’m not an expert in the property market, but if I were buying an apartment which has been sitting on the market for years, I would try bargaining to bring the price down a bit. If for some reason I wanted to buy 96 of these apartments, then I would be reasonably confident in my ability to haggle a few grand off the price tag, wouldn’t you? Somebody should tell Cork City Council that usually when you buy in bulk you’re supposed to save money.

Piecing together what I’m reading on the rest of this thread, what we have effectively is this: a developer buys this entire place from the government in the 90s for £900,000. They do up the apartments, sell a bunch of them to private buyers, and then flog the rest of them back to the government for nearly €26 million. You can be sure there’s some crooked valuer in there signing off on the hefty valuations too, and a couple of fat cats lapping it up.

As far as I can see, the only difference between this scam in Cork, and the Sopranos in Newark was that Tony Soprano was dealing on a much smaller scale (haggling over $7,000), and the HUD scheme actually made sense for the residents. Or maybe I’m just watching too much television?

This entry was posted on Monday, March 24th, 2008 at 1:13 am and is filed under Cork. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.