How I'd tackle the housing crisis, minister...
If I was the newly- elected minister for housing in the current crisis, this is what I would do. First, emergency decisions must be made to ease the pressure on social housing and homelessness.
Immediately, I would have local authorities increase HAP levels (rent supplement) for social housing to full market value as it's a travesty that social tenants are being evicted from their homes for this reason. I would also provide emergency funding to local authorities to refurbish any vacant properties that they own or sell them in one lot to an investor on the condition that they are refurbished and let back to the State for long-term social housing. I would make avail- able further emergency funding for the immediate purchase of 1,000 properties and I would also introduce Section 23 tax incentives or tax credits for landlords who are prepared to offer long-term leases for social housing.
Secondly, I would look to tackle the rental sector. Landlords are seen by many as pariahs, but they are the most significant suppliers of rental accommodation in the State. They are over-taxed, resulting in too many leaving the sector. The majority of ex-rental properties coming up for sale are being bought by owner- occupiers, further exacerbating the situation, which could potentially worsen as the funds sell down loan books. To counteract this, I would exempt rental income from USC and property tax and re-introduce mortgage interest relief or tax credits to encourage current investors to remain in the sector and to attract new entrants. I would also have the Government introduce a residential invest fund for investors to build or purchase buy-to-let properties as there are few meaningful buy-to-let mortgage products in the market at this time.
On the construction side, I believe a Help to Buy scheme - a form of shared-ownership similar to the UK's - should be introduced. In the UK it operates on 70 sites and has been instrum- ental in increasing housing output. If the Central Bank will not amend its overly-strict mortgage lending rules, the Government should take the lead and introduce a first-time buyer's grant for buyers of new and second-hand properties at entry-level prices. The Government also needs to provide cheaper funding to builders to facilitate further construction as this is still a barrier to new starts.
There is no one solution to solving the current housing crisis, but a combination of issues that needs to be addressed. What is vital is that Ireland has a properly functioning property market, a key factor to ensure that overall economic recovery continues. Unfortunately, we are some way off this goal, and every effort needs to be made by all stakeholders to achieve a normal working housing sector for the benefit of all.
Keith Lowe is chief executive of DNG