Review of The Builders by Frank McDonald and Kathy Sheridan (2008, Penguin)

Written by well-respected Irish Times journalists Frank McDonald and Kathy Sheridan The Builders charts the rise of the property boom in Ireland during the late 1990s and into the 2000s, a period in which hundreds of thousands of new housing units were built, and office blocks and shopping malls popped up all round the country, transforming the landscape. Principally it traces the stories of some of Ireland’s best known developers, most of who came from unassuming, rural backgrounds to build multi-billion euro property empires, much of which is beyond Ireland’s shores. As such, while there is some analysis of the regulatory, legal and financial conditions that fuelled the construction bonanza and spiralling land and unit costs, the principle focus is on the main movers and shakers, and how they built up their businesses.

What the book reveals is that, not unsurprisingly, that the most successful Irish developers are workaholics and ruthless business operators willing to grease palms, exploit loopholes, drive up productivity and reduce costs, and to fight tooth and nail over contracts, using the courts when necessary. While personality and drive is undoubtedly important, the book also exposes how developers benefited from: 1) very close relationships with TDs and councillors, especially those representing Fianna Fail, who fixed the planning process, 2) a relatively weak planning system that struggled under sustained pressures of demand, lobbying and corruption, 3) a deregulation of personal and corporate financing that flooded the market with credit, 4) tax incentive schemes, including the significant reduction of capital gains tax, that enabled them to avoid taxation and to plough their profits back into new investments, 5) the hoarding of zoned land to restrict supply and push up demand and price, 6) the creation of a relatively large investment class that were amassing small portfolios of properties for rent or were ‘flipping’ new properties for tidy profits, 7) unregulated price phasing of developments.

While a fascinating read, the book does have some shortcomings. The principle one is that by focusing on the personalities the book really fails to systematically examine how political, regulatory and financial structures were configured in such a way as to make the property boom almost inevitable, regardless of who the developers were per se. In particular, there is very little attempt to draw on academic explanations with regards to urban development, even that by Irish academics who have been researching the property boom for a number of years such as Andrew MacLaren. As a result, what McDonald and Sheridan provide is effectively a regime analysis (where in development is driven by a small, tightly networked group of political and business elites), rather than, say, employing regulation theory which would provide a neo-Marxist explanation of what was occurring. The result, I feel, is that analysis is quite descriptive but really lacks explanation – and to that extent its mostly surface with little depth. In addition, although published in October 2008, The Builders feels oddly out of date. I suspect most of the book was written in 2007 at the point where a slow down was occurring, but the crash was still a little way off and commentators and developers were hoping for a soft landing. Since publication some of the developers discussed have gone bust, others have lost fortunes, and almost certainly all have been NAMAered (their portfolios drawn into a toxic asset management unit owned by the Irish State). A year can be a long time in an economic crash.