I ask Deputies to indicate if they want to come back in. I am taking notes as this develops. There is no requirement of proof in respect of the inability of a developer to access credit from a bank or other financial institution. I accept that everything takes time. Ms Deering will recall that I mentioned the very famous site in Ballsbridge. As I recall, a party was actually held by the bank on the day that the loan was granted in principle because it had secured such a big deal. The financial institution was over the moon that it had actually been granted that loan. Banks are very interested in lending money for what is called real estate, or bricks and mortar, particularly in Ireland, because it is less risky than other ventures, such as manufacturing or whatever. The asset is there and they have the deeds. We know how it works and why it works. For example, the deeds to my house are with somebody else because I have a mortgage on it at the moment. No proof of the inability of a developer to access credit is required.
We have also ascertained today that there is no problem in providing funding to institutional investors. We have established that more than 80% of the money in the momentum fund has gone into large-scale apartment development in Dublin. Is it for institutional investors, which are sometimes referred to as cuckoo funds? There is no barrier to the money from the HBFI going to such funds that rent out the apartments. Ms Deering has elaborated on and explained the logic from their point of view that it is about increasing supply. However, it is increasing the supply of overpriced houses. We have also established that the largest loan granted was €94 million, and a further loan of €74 million was granted for the aptly-named Greenacres development in south Dublin for the construction of apartments. Those two loans together are worth €168 million, which is a fair chunk of the cash that is available. We have also established that up to that point at the end of 2020, loans had only been granted for up to 41 homes to be provided by small builders in developments of ten or less. The points I wish to emphasise are no requirement of proof of inability to access credit, no barrier to cuckoo funds, large loans are being granted to institutional developers and the affordability issue. Local authorities build very high-quality homes. I refer to Ó Cualann housing association. Granted, it has free land. I understand that, but the land still does not make up that fraction, where we are heading towards nearly three times the cost from the figures HBFI provided. The loans, particularly from the momentum fund, are being granted to large developers in Dublin that provide overpriced apartment blocks to let.
I thank HBFI for the briefing it submitted to the committee in advance of the meeting. It contains good information that is set out in a very concise way. When I read the briefing, I was shocked to learn about the bond situation. I refer to the case where a developer goes to a local authority to build 100 houses or apartments. The local authority will look for a bond, typically so much per unit, to ensure the development is finished, and the roads are put in and the sewerage water, public lighting, footpaths and everything else is finished off to a proper standard. I am referring to everything within the public domain, out past the front door to where the development meets a public road. In the HBFI briefing, with regard to bonds failing, it is stated: "The report noted that although difficulties have been highlighted on specific developments it was not considered to be a widespread practice." I was a county councillor before I became a Deputy. Like those who came behind me, I am still following up on estates that I was chasing up more than 20 years ago with developers in relation to bonds failing, bonds not being renewed, bonds not being rolled over and bonds that were not worth the paper they were written on. Some local authorities are now only accepting cash bonds. To my mind, it should always have been that way. I have stood on estates, as I am sure other public representatives have, that have been left in disastrous state. They looked like Syria. I have seen manholes and sewers left open, no public lighting, no footpaths and no surfaces on the roads. On one estate, the developer did not even bother to put in the road. I am talking about awful outcomes. Local authorities had to go in and finish these estates. We had to argue in the Dáil for the Department of the Environment, Climate and Communications to provide money just to address the safety issues on estates following the crash, which, in fairness, it did. That is still a problem. We had the insanity of the Celtic tiger, the hangover from it and the mopping-up exercise that followed. That mopping-up exercise continues today. A little more care has been taken with recent developments. However, I am concerned about the assertion that it is not considered to be a widespread practice. I am concerned about the fact that we are providing public money to entities, including investors, small and large developers, with no guarantee that when the estates they are developing or the projects they are working on are finished, the local authorities will not have to find money or go begging to the Department for the Environment, Climate and Communications, or that we will have to stand up and argue in the House with the Minister for Finance, looking for money for them. The State has had to intervene a lot. Local authorities have had to intervene. They have had to use of money that was designated for other purposes. Local authorities are not cash-rich generally. I ask HBFI to review that.
Ms Deering mentioned earlier that the fund has been closed. If there is going to be any future funding for anything like this, the bonds issue has to be nailed down. We had a discussion on it. Deputy Catherine Murphy and I raised the issue, in particular, but other Deputies are interested in it as well, in fairness. We are concerned about the failure to have proper bonds in place. I am not just referring to pieces of paper; I am talking about putting proper bonds in place, so that if the developer fails, the local authority can get its hands on the cash. It is the enforcement authority. It is left to deal with the issue. County councillors around the country have to take the flack from the public. The public ask them why permission for developments was granted and why bonds were not adequate. I can take the witnesses to estates in Mountmellick, Portlaoise and Borris-in-Ossory. There are estates all over the place. Members can rattle off examples of estates that were not finished properly and where there are still issues to be addressed. For example, the sewerage pumping station in Woodgrove, Portlaoise, close to where I live, is still not adequate. In the real world, beyond the gates of this place, the issue of bonds has to be nailed down if any further finance is going to be provided or before any other loan is granted using public money. I would say the same thing about granting private money, but I make the point particularly in respect of granting public money. Through the issues that we have fleshed out this morning, we know that there is no requirement of proof of the inability to access credit. If I apply for a local authority loan, I have to be able to show that I cannot get the finance elsewhere. This money is available to institutional investors, which are sometimes referred to as cuckoo funds. The stated aim in the first place of providing finance to small builders has not worked out. Now we find that the bond issue is not watertight. That is not good enough.