Sunday 30 April 2017

Census 2016 figures bring a bombshell

Ireland's growing population and net immigration mean that an additional 40,000 to 50,000 new homes per year will be needed
Ireland's growing population and net immigration mean that an additional 40,000 to 50,000 new homes per year will be needed

Ronan Lyons

One of my favourite Republic of Telly sketches is 'Things your parents could say in the 1980s', which included things like "That young Bertie Ahern is a real go-getter - we're voting for him!"

In one of the scenes, there's a car with at least five children across the back seat, not a seat-belt between them. The father turns around and says to one of them, "Stand up here between Mammy and Daddy, you'll see the road better."

Cramming as many as you could into the back of the car may have been a way of life of the Irish back in the 1980s - but it seems 2010s Ireland is an apple that hasn't landed far from the tree.

The first of the detailed results from the 2016 Census were issued last week and it seems we are still cramming people into homes.

The top-level results of the Census are reasonably well known. There was a strong increase in the population between 2011 and 2016. The increase of more than 165,000 people means the annual rate of population growth in recent years has been 0.7pc.

This may sound small but, given the strong level of emigration, particularly early in the period, it is a sign of just how fast the country will grow now that the flow of migration has turned inward again.

(Immigration has risen from 53,000 a year in 2012 to almost 80,000 in 2016, while emigration fell from 90,000 to 75,000 in the same period.)

But, under the radar, there was something of a bombshell in the figures.

Average household size - that is to say, the average number of people in the typical household in the country-- actually rose between 2011 and 2016. It rose from 2.73 to 2.75.

Now, this may sound like a small change. But Ireland's average household size has been falling steadily over the last 50 years. This reflects any number of social trends, including increased longevity, a small number of children in each family, and a greater share of adults not having children.

Between 1971 and 2011, average household size in Ireland fell from 4.1 to 2.7. To see why that matters for housing, let's keep the size of the population the same and just vary the average household size. At 4.1 people per household, a population of 4.5m needs 1.1m homes. But at 2.7 per household, it needs 1.67m - over 50pc more.

It has been obvious that Ireland is on the same journey as other European countries - just slightly delayed. Average household size in Europe has been falling for decades and now averages 2.3. In 2011, household size in Ireland was higher than anywhere else in Europe, apart from the Balkans.

But at 2.3 people per household, a population of 4.5m would need just under two million dwellings - almost 300,000 more than it had in 2011. (And that's with a static population… Ireland's is growing by about 15,000 households a year.)

This, then, is the bombshell in the Census stats. Households can only form if there are dwellings for them to form in. And at a time when every social pressure was pushing Ireland towards lower household size, the lack of housing has forced us to cram more in a dwelling.

One commentator last week tried to put a brave spin on the figures by suggesting it reflects Ireland's on-going baby boom. Unfortunately, the stats do not back this up. The Census documents 17 different household types, from 'One person' to the glamorously titled 'Households comprised of unrelated persons only'.

But for practical purposes, these 17 types can be grouped into four headings: the 'with children' family types; the 'zero kids' family types; the 'with other persons' household types - ie, where unrelated people live with a family; and the 'non-family' household types, ie, where there is no obvious family unit in the dwelling.

The 'with children' family types make up over 60pc of the population. But their share of both the population and of the number of households actually fell slightly between 2011 and 2016. The same is true of the 'zero kids' families, who make almost one quarter of the population.

Just to reiterate that: Ireland's population grew by 166,000 people between 2011 and 2016 - but families and no-children couples/singles were under-represented in that growth. Neither the 'we're great at having kids' narrative nor the 'we're going the way of Western Europe' narrative applies.

Instead, over 40pc of Ireland's population growth in recent years has come from two traditionally small sources: families who have non-family members living with them, and households where there are no families at all.

These two categories account for about 15pc of the population - but made up fully 35pc of the growth in the population between the last two Censuses.

This reflects the complete failure of housing supply to respond to new demand over the last six years.

Even with a stable population and stable household size, Ireland would need about 10,000 new homes built each year just to offset obsolescence - and this would largely be urban apartments replacing rural cottages.

With falling household size - something we know our population is trying to do - or even keeping the population constant, Ireland needs an additional 15,000 homes per year. And again, this will be concentrated in cities and towns and in types other than the three- and four-bedroom house. This includes apartments for downsizers, studios for young professionals, purpose-built student accommodation and assisted living for older persons with care needs.

That means that even if our population were stable, Ireland would need 25,000 homes per year just to stand still. When you add in not only the natural increase - a further 15,000 a year - but also likely inward migration, it is clear that Ireland needs at least 40,000 and closer to 50,000 new homes per year.

The country has been getting one third of the new homes it needs. The Census is the wake-up call that until we understand how to build apartments better, we won't be able meet our needs any time soon.

Ronan Lyons is assistant professor of economics at Trinity College and author of the Daft.ie Reports

Sunday Independent

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