We cannot care about homeless and want house prices to rise
Published 21/05/2014 | 02:30
ANYBODY who doubts that we can solve our housing shortage should take a look at a few aerial photographs of Europe's main cities in 1945.
These chilling tributes to the vicious effectiveness of the Blitz and the RAF Bomber Command show whole swathes of London or Berlin in ruins, but history shows that post-war governments overcame the subsequent housing shortages in a remarkably short time.
How did Clement Attlee or Konrad Adenauer do it? Perhaps it is easier to list what they didn't do. They didn't throw a few million at housing charities, tinker with mortgage relief or help first-time buyers. Instead, they accepted that there was a housing crisis and embarked on radical action.
William Beveridge is mainly remembered today for creating the blueprint for Britain's National Health Service, but that great Liberal politician also devised a housing policy in 1942 which went a long way to ensuring that most Britons had somewhere to live when the war ended. Beveridge was driven by a moral imperative; a belief that poor housing was a great evil that led to poverty and lack of hope and opportunity in Britain. "The greatest opportunity open in this country for raising the general standard of living lies in housing," was how he put it in 1944. His solutions were varied, effective and could be used today.
An early solution was pre-fabricated homes which were mass-produced in factories and could be sent anywhere in the country. By 1948, 125,000 had been assembled and distributed to areas in need. Many lasted for decades.
Another approach was the creation of 'new towns' such as Milton Keynes, Crawley, Bracknell, Basildon, Hatfield, Hemel Hempstead and Stevenage. To do this the government passed the New Towns Act in 1946. That removed most of the red tape faced by developers while also creating Development Corporations to ensure that schools, hospitals and green belts were also provided to the citizens of these towns. Back home in 21st-Century Ireland, we have done nothing to encourage the use of pre-fabricated homes or the construction of new cities. Pre-fabricated homes are popular all over the continent and could easily be exported here if we relaxed the planning laws and accepted that we want to solve the housing problem rather than pander to vested interests.
We could also follow Beveridge's lead when it comes to building new towns. There is certainly no shortage of land close to our main cities. We even have a template in Dublin's Docklands; a new quarter which houses tens of thousands of people in comfortable flats and is a tremendous success. While the authority which developed the docklands did not cover itself in glory, the decision to suspend the usual planning laws and allow high- density living has created a thriving area with much better facilities than the developments elsewhere in the capital which were built according to the mystifying precepts of our planning officials and An Taisce. It is a paradox that most of the world's great cities from Berlin to New York evolved during periods of fast growth and with lax planning regulations. Many of these developments remain highly desirable today.
Building is not the only solution. An astonishing one in 10 houses lies empty in Dublin, but could be filled if we slapped taxes on empty houses. The Residential Landlords Association believes there are something like 1,200 bedsits available which could be rented to those in need if councils did not insist on naff luxuries like en-suite bathrooms.
Finance Minister Michael Noonan is not stupid. He knows that we can, and indeed must, boost supply to resolve the housing crisis but he also knows that this solution will lead to falling house prices. As the only shareholder in the National Asset Management Agency and a major shareholder in our banks, Mr Noonan has every reason to worry about declining property prices and their effect on bank balance sheets.
As a politician of a mainstream party supported by voters who often own their home or languish in negative equity, Mr Noonan has every reason to fear what falling property prices will do to his party's electoral chances. That places the ball firmly in the electorate's court.
Voters cannot really pretend we care about homeless families and individuals if we also want property prices to rise. We have no difficulty understanding this equation when it comes to mundane areas of supply and demand. Everybody knows that a shortage of bananas will lead to high prices and prevent many people from munching bananas, but we struggle to accept the same logic when it comes to homes.
There is only one real a solution to the housing crisis; build more houses. Introducing the sort of radical solution would require voters to do two things; give developers a free reign and accept that houses prices should fall. Until the property-owning majority accept we need measures that will inevitably lead to house price declines, we will not be able to solve our problems.