Friday 21 July 2017

Home truths: Leadership battle leaves housing in limbo

Simon Coveney and Leo Varadkar
Simon Coveney and Leo Varadkar

As the Housing Minister, Simon Coveney, fights back from behind in a ruthless battle for the country's leadership role, that other important battle - against the housing crisis - is almost certainly at risk of losing its navigator.

Simon Coveney personally sought the housing portfolio and was instrumental in putting together the most comprehensive plan ever tabled by Government to battle homelessness and to fast-track the supply of social and privately occupied housing.

His Rebuilding Ireland plan launched last year and is currently under way with the objective of providing 20,000 new homes. He has also been unusually dedicated and hands-on in driving it forward.

Until now.

While Coveney has not been entirely ruled out of the Fine Gael leadership race, few rate his chances of winning at this point, thanks to an early round blitzkrieg by Varadkar which has left Coveney reeling and almost too far behind to make up ground among the party bigwigs.

At this point, there are four likely outcomes and in three of them the big housing plan will lose its heavyweight driver - or else his involvement will be diluted to the point of making him largely ineffective.

The first and least likely scenario is that Simon Coveney will come from behind and miraculously win the leadership race. While the task seems insurmountable, those who know Coveney say you can't write him off until the very end. Coveney himself has stated this week that he could still swing the necessary votes to stay in the race. If this happens and he wins, Coveney will obviously have to leave his position as Minister for Housing to become Taoiseach. He may, however, maintain a 'special interest' role in the housing portfolio if he ends up as premier. But the big housing plan loses the full attention of its creator and driver, who must now run the country.

The second scenario is that Coveney loses as expected, and Varadkar emerges as ungracious and vindictive in victory. Some observers said Leo's early-round manoeuvres in the race broke unspoken rules of engagement and, if he continues in this vein, he could conceivably cut Coveney and his supporters out of cabinet entirely.

Midway through the race, Mr Varadkar also targeted Mr Coveney's housing plan by stating that he would reverse the Help to Buy Scheme if he determined conclusively that it was responsible for house price inflation.

A vindictive Varadkar victory would once again result in the big housing plan losing Coveney.

Third is a scenario in which Varadkar as victor learns from his predecessor, Enda Kenny, who was a master of keeping his enemies close at hand - and that means in the cabinet. In this scenario, there would be a requirement not only of giving Coveney a cabinet job but also one that he is actually happy with, therefore a promotion.

In this scenario, the likely outcome would be that Simon Coveney is offered the choice Finance portfolio and/or that he is given the option (if he so wishes) of remaining in charge of housing.

In many ways this would be Varadkar's cleverest option. Coveney certainly loses some of his integrity credentials if he ditches Housing - which he has so obviously and publicly committed himself to - in favour of the better job. It would look as if he wasn't really serious about Housing in the first place and would weaken his integrity somewhat as a result.

If he is offered Finance, Simon may ask to become a Finance Minister with a special remit for Housing. This is also not the perfect option for the housing crisis, and risks badly diluting the directorship of the Housing portfolio at a time when homelessness, rents and prices are all soaring. The last option is that Varadkar takes a neutral or even slightly hostile stance and dictates that because Simon Coveney is so committed to sorting the housing crisis, and so integral to driving the big plan forward, the country would benefit best from him staying in situ until the job is done.

Given Coveney's prickly nature, there's a chance that Simon may take umbrage at this and refuse to stay on - but once again it would be difficult for him to maintain his 'dedicated' credentials by not returning to the bed of his own making. But a Varadkar victory adds another twist to how the housing crisis is tackled going forward, and that's one of ideology.

To date, the neoliberal outlook of Fine Gael's current vanguard, generally, has also thrown a spanner in the works of the possibility of direct State intervention. The likelihood of a Varadkar victory lessens even more the chance that the State itself can become the developer, as it did successfully in the past provision of social housing in great numbers.

Under Varadkar, the party becomes even more ideologically opposed to the notion - despite the fact that at this point many believe direct State involvement is the only viable option to provide the necessary housing at a fast enough pace to make a difference.

Varadkar is viewed as a pro-business neoliberal somewhere to the right of Coveney. The latter is also somewhat right of centre in his outlook. Varadkar's deliberate firing over Coveney's bows with a threat to do away with the Help to Buy Scheme has underlined publicly the former's position further to the right.

Thus far, Coveney was already looking to the badly disabled private development sector to sort out the housing mess - even though the sector says it cannot do so while banks aren't lending for development and they must instead rely on overpriced private finance with rates running as high as 14pc. Developers and the construction sector generally have also stated repeatedly that they are hamstrung by the lack of necessary infrastructure to activate so many potential development sites with no indicator of where the money is coming from for this.

It could be argued that the only entity currently able to get stuck in as developer and start building houses is the State itself - whether that be under the guise of Nama or, as in the past, via the local authorities, or both.

The ascendancy of Leo Varadkar to Fine Gael leader and Taoiseach means we can absolutely forget about the possibility of direct State intervention on the ground in housing and a return to successful solutions of the past.

Indo Property

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