Home Truths: Out of the blocks three years too late
News that a Labour minister is pandering to the needs of developers might seem odd for some to countenance, but recent reports by this newspaper suggest Environment Minister Alan Kelly is about to table a batch of policies intended to remove blockages to new home construction.
These include low-cost loans to developers from local authorities and refunds of development levies on a performance basis for new house construction.
So it seems the Labour Party has finally realised that provision of private housing (as well as public housing), is essential in order to prevent the "trickle down and out" syndrome which is being inflicted on those clinging to the cheapest rental accommodation right now - those most at risk of ending up on the streets.
Because not enough private homes means higher private home prices, higher rents, more displaced persons and higher levels of homelessness.
For the last number of years, State housing policy has arguably been paralysed by being stretched between left and right. Labour's Jan O'Sullivan fought the corner of the local authorities to uphold high levies, cited the need for more public housing and tabled the notion of rent controls. On the right, long-serving Environment Minister, 'Big Phil' Hogan of Fine Gael appeared to favour the laissez-faire economics of non-intervention. It meant three years went by during which the city housing crisis was permitted to escalate to what we are dealing with now.
But it's 'all go' now from Government - as Minister Kelly tackles the issue from the local authorities' end, Minister Michael Noonan is also taking initiative regarding banks and private equity funding. The Finance Minister is to participate in a closed-door conference next month with key builders, developers, bankers and financiers to tacke their finance issues.
So Government is at last taking the initiative on a city housing crisis which first became apparent in the capital at the end of 2012. That's three years to get out of the blocks folks.
That Ireland, a country with one of the lowest population densities in Europe and which has just emerged from one of the world's worst property crashes, should have a shortage of houses anywhere at all is in itself a travesty. But better late than never.
The problem for this Government is it could take until later this year for these policies to take effect and then another year for the badly needed houses to be rolled out. Nama has estimated that provision of adequate finance, for example, will provide 14,000 homes in the Greater Dublin Area (GDA) over two years and, while 7,000 per annum in Dublin will certainly make an impression, it is no where near enough to satisfy demand in a city which has seen almost no new family housing provided in a decade during which the population has jumped by almost one-fifth. A city housing crisis of this magnitude has a blunderbuss effect - it hits almost everyone to a degree.
In Dublin, where the Government arguably had the most electoral support last time out, the city housing crisis affects the elderly parents who have adult-aged children living at home, it affects those adult children and young couples who have had to postpone starting families. It affects the student teacher who finds herself one of three sharing a bedroom in a rented shared house instead of having a room to herself.
A bedsit rent increase of 10pc - the average amount by which rent increased nationally last year - is an extra €90 on that bedsit's rent which means €22.50 per week less disposable income spent in the pub, grocery shop or cinema. At the same time, a 20pc increase in property prices (as Dublin experienced in the last 12 months because of shortage) represents a €140 per month increase on the monthly mortgage spend - this time €35 per week less disposable income.
Those now saving hard under the increased deposit regime cause even more disposable income taken from the economy as they scramble to save enough to make up the higher 20pc deposit threshold as well as paying more for their hiked-up rent.
It affects the children of families in rental accommodation who have to change school every time their parents move again to find affordable rent. It hits the local publicans and restaurant owners who have empty houses because punters of a certain age are either saving up 20pc deposits or spending all their disposable income on increased rent.
And most of all, it affects those on the very bottom rung, who are now increasingly being refused tenancy by landlords - or who have had their rents increased (14pc up in Dublin City Centre in the last year) to levels they can no longer afford. We're talking about single mothers who work and others on low or subsidised incomes who are now clinging on to avoid the streets. We're not talking drug addicts.
Action on the housing crisis is commendable but it is now too little too late to prevent voter fallout on this issue in the cities for when the government parties hit those same and considerably meaner streets next year.