Monday 26 September 2016

Downsizing empty nesters would help ease housing gridlock

Lorraine Courtney

Published 16/03/2016 | 02:30

'Rent levels are high because there are too many people who have to rent'
'Rent levels are high because there are too many people who have to rent'
'Meanwhile, in Tyrrelstown, Dublin 15, the vulture capitalists have swooped in – meaning that tenants there will have nowhere to call home, as 200 families renting homes in the area are facing eviction'

The housing and rental crisis featured large during the General Election campaign, with lots of name calling for past failures to build new homes and vague promises that more would be built.

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But now it's official: rents are now higher than 2007's crazy levels. The average cost of renting a house in Dublin is now €1,430 a month.

A city apartment will set you back €1,312. This means that rents in the capital are almost half a per cent higher than they were in 2007. We've surpassed 'peak boom'.

David Duffy, a senior economist at the ESRI, says there is a possibility that the rent hike was caused by the new two-year rent freeze rules.

"In the data that we have, it is too early to say - because the measures only came in December and this data only relates to October/November/December," he said.

"I think what you tend to see internationally is that when some form of rent certainty is announced you tend to get some form of front-loading."

We always knew this would happen when Alan Kelly interfered.

Landlord-tenant relationships are self-correcting, and don't need government intervention.

Meanwhile, in Tyrrelstown, Dublin 15, the vulture capitalists have swooped in - meaning that tenants there will have nowhere to call home, as 200 families renting homes in the area are facing eviction.

Twinlite, a property company, sent letters informing the families that they have to leave the properties after a Goldman Sachs vulture fund bought an €89m loan secured on the homes from Ulster Bank.

Some families have been renting the homes for the past decade. Many of the tenants at risk of eviction are social housing recipients, who will likely need to source alternative accommodation through their local authority. However, it is unclear where these people can go now, given the lack of social housing.

According to figures published last month, there are almost 140,000 people currently on waiting lists for social housing properties around the country.

Rent levels are high because there are too many people who have to rent - and not enough homes available for them to do so - driving up the prices people have to pay.

Dublin is growing by about 10,000 households a year, meaning that 100,000 new homes were needed in Dublin over the course of this decade. More than half-way through the decade, fewer than 10,000 have been built.

One of the keys to unlocking our housing problem arguably lies not only in building homes, but in finding suitable ones for those who have brought up their families and would now like a smaller home.

Our problems will only worsen without radical new ideas, and there is an option to encourage older people to downsize.

You know who I mean. Their children have left home, the house is too big. They are the older generation who own most of the property equity in this country.

An ESRI study of almost 6,000 people found that one-third of those aged over 50 live alone.

Some 63pc of those over 80 live alone, and almost 90pc of cases analysed involve so-called 'empty nesters'. Meanwhile, 14pc live in houses with seven or more rooms, and more than 30pc of couples live in a house with seven or more rooms.

It is difficult to make this argument without sounding cruel, but one of the ways to ease the seemingly never-ending misery circus that is our housing crisis would be to financially encourage older people to downsize.

It is simply a recognition that our housing needs can change with age.

The majority of half-empty homes are in cities, and the areas hardest hit by housing shortages are - surprise, surprise - in cities.

Whenever you bring up this argument there's a certain squeamishness, and a misapprehension that this involves kicking pensioners out of their homes against their will and shunting them off into a care home.

And there are lots of reasons why even an empty nester might not want to downsize, such as the memories attached to a house.

Unsurprisingly, Alone - a charity that supports older people to age at home - isn't impressed.

But if the stress of moving was mitigated by councils helping with removals and offering grants to help those downsizing, the number would definitely rise.

There are so many benefits around selling a larger family home and opting for a smaller footprint, something more manageable, more cost-effective.

We're currently facing an acute housing crisis that is particularly affecting young people. We can't build fast enough. We also don't have the space in Dublin, so any older households downsizing would be making a small, but significant, difference to young lives.

Over the past two decades, Rural Resettlement Ireland has helped more than 770 Dublin families start a new life in the countryside.

The impact of the Clare-based charity has been immense, breathing life into decaying rural communities.

Perhaps the government could promote country living too, as a way of freeing up living space and unblocking the great housing gridlock.

We need to do something quickly.

Irish Independent

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