Sunday 25 September 2016

Risks have to be taken if Simon Coveney is to find a way to fix broken housing market

Eoin Ó Broin

Published 26/05/2016 | 02:30

Housing Minister Simon Coveney Picture: Conor McCabe
Housing Minister Simon Coveney Picture: Conor McCabe

Minister for Housing Simon Coveney has called for a cross-party consensus on housing. Given the scale of the crisis, I agree. Our housing system is broken. All three pillars - owner/occupier, private rental and social rental - are in need of serious investment and reform.

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Coveney now has an opportunity to chart a new course. His Housing Action Plan, due in August, must be radical if it is to ensure that people can access appropriate and affordable housing.

At the heart of this new approach must be a return to large-scale local authority building.

The current government strategy commits to 35,000 units over the coming six years, though many of these are not actual social units. This is simply not enough.

A landmark National Economic and Social Council (NESC) study in 2005 estimated that by 2014, the State would need 200,000 social houses. Today, we only have 139,000 and a higher level of need than 2014.

To meet the NESC target, Coveney must, at a minimum, double the social-housing targets.

This can be done by progressively increasing the targets for local authority acquisitions, refurbishments and new builds to 5,000 a year within the lifetime of this Government.

These homes could be paid for through a combination of 100pc upfront revenue contributions and low-interest Housing Finance Agency loans.

The local authority programme could be supplemented by multi- annual housing association programmes to provide an additional 4,000 units a year.

These units could be funded through loans from the Irish League of Credit Unions and the Housing Finance Agency.

Delivering new social housing on this scale would not only provide homes for the 2,121 children in emergency accommodation. It would dramatically cut social housing waiting lists, which in many local authorities are up to 10 years long.

A large social housing building programme would also benefit the working private renter and first-time buyer.

There are approximately 80,000 households living in private rented accommodation subsidised by the State. Moving these people out of private rental and into social housing would increase the availability of private units to rent and buy, reducing pressure on rent and house prices.

Speaking in the Dáil this week, Coveney warned against a return to large-scale, single tenure estates.

I agree.

But the answer is not small-scale, infill projects in existing local authority estates or social segregation via 10pc Part V commitments in private estates.

We need a new model of public housing.

This means mixed tenure and mixed income local authority and housing association estates.

There is no reason why a TD, a nurse and a retail worker cannot live on the same street as a student or a family out of work.

Building public housing estates that combine social rental, cost rental and affordable purchase is a better model for meeting the housing needs of those left behind by a dysfunctional market.

It would also create more sustainable and cohesive communities.

This is the big idea that Coveney must embrace.

The minister also needs to outline a roadmap for the private rental sector.

There are too many accidental landlords, resulting in a volatile rental market determined by underinvestment and short-term thinking.

The solution lies in providing greater rent certainty and security of tenure for tenants, side by side with reform of the tax treatment of landlords.

The Programme for Government outlines a number of new measures to deal with mortgage distress. These are potentially welcome but will take some time to put in place.

The Government should legislate for a moratorium on home repossessions until these measures are up and running.

The most difficult part of the housing system faced by the Government is the cost of private construction. Figures from the Irish Institute of Chartered Surveyors and the Construction Industry Federation indicate that the cost of building a good-quality family home in Dublin is in excess of €330,000.

However, measures proposed by these bodies to reduce the cost, such as a reduction in VAT to 9pc, would not have a significant impact on affordability.

The central policy objective of the Government must not be to increase access to credit but to bring the sale price of private housing down. Any measures designed to achieve this objective must be linked to an affordability cap and must be time bound and tightly monitored.

For 30 years, housing policy has been governed by a belief that the private sector can meet the housing needs of all sections of society. The role of the State as a provider and regulator has been greatly weakened.

This is why so many families will sleep tonight in emergency accommodation, why rents are spiralling out of control and why buying a home is increasingly out of reach for working families.

If Coveney wants to tackle these problems he has to take risks.

He will have to reinsert the State as a major player in the housing system.

If he does, he will have Sinn Féin's full support.

Eoin Ó Broin is a Sinn Féin TD for Dublin Mid-West and spokesperson on Housing, Planning and Local Government

Irish Independent

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