Wednesday 28 September 2016

Supply crisis requires a calculated response, not desperate measures

We cannot cut corners again. Our existing stock of houses can meet our needs if managed better

Conor Skehan

Published 12/06/2016 | 02:30

'The Housing Agency is warning that there is an excessive concentration on house-building alone. This will only address the symptoms and not the causes of housing and homelessness problems' Stock photo: Graham Moore
'The Housing Agency is warning that there is an excessive concentration on house-building alone. This will only address the symptoms and not the causes of housing and homelessness problems' Stock photo: Graham Moore

Apprentice carpenters are taught 'measure twice, cut once' to stress how important it is to have a full understanding before acting irreversibly.

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As Ireland emerges from a housing collapse, that dramatically disrupted housing supply, there is a clamour to build, build, and build. Much of this clamouring is taking place without the measure of housing as a whole.

The Housing Agency is warning that there is an excessive concentration on house-building alone. This will only address the symptoms and not the causes of housing and homelessness problems.

The lack of supply - which is driving up rents as well as homelessness - is indeed the cause. A lack of supply arises from excessive vacancy, excessive costs, underutilisation of stock, inappropriate types or locations of homes, and a lack of homes for sale - as well as a shortage of new housing. This needs to be addressed in many ways, by many actors. It can be a slow process.

The Housing Agency is warning that a failure to tackle all of these other issues would be a missed opportunity to address the causes of supply failure - and we need to do so quickly, cheaply and very effectively.

Anyone who promises quick fixes to housing is either unwise or misinformed. Many are currently arguing that we need to adopt extraordinary measures to deal with an unprecedented situation yet, for the most part, the proposed extraordinary measures concentrate only on new building - ignoring the many other options available to us.

The agency advises that new house building is a fraction - and a small fraction - of Ireland's housing issues. It is sobering to heed the carpenter's advice by measuring all of the parts of Ireland's housing before proposing any extraordinary measures for any one part.

The agency has analysed housing supply and demand and advises that Ireland needs around 21,000 homes each year. And everyone assumes that we need to build these. We don't. Better management of our existing stock offers the opportunity to meet these needs quickly. This will allow us to build wisely, gradually and appropriately without being rushed into solutions that are unsustainable or unsuitable.

We also advise that there were over 230,000 vacant homes in Ireland during the 2011 census - that's over 10 years of supply without building a single new home. This, of course, is a huge oversimplification - the vacancies may be less, they may be in the wrong places, or the wrong type, but the fact remains that it represents a potentially inexpensive and fast solution. Vacancies are a huge issue that needs to managed and addressed as an urgent priority.

Another key priority identified by the agency is the need to keep people in their homes so that they don't end up on the growing housing waiting list. The costs of any solutions to mortgage arrears need to be seen in the context of the costs of how to house up to 200,000 families who might lose their homes due to arrears (see panel). This is another important issue that also needs to be urgently addressed and managed.

Finally there is our rental system - this affects over 450,000 households in Ireland. Lack of certainty for tenants and a lack of incentives for professional landlords are some of the many challenges that face a sector that already accounts for over half of Dublin's households. How long can the political system ignore the needs of over half of the population of the national centre of employment and productivity? This is another fundamental issue that needs to be urgently addressed and managed - to preserve national competitiveness, as well as meeting accommodation needs.

So, returning to the theme of measuring before acting, we have seen that the issues of vacancy, arrears and rental affect nearly half of all households in Ireland. These issues can all be quickly addressed by legislation and the tax system, as the agency has advised. It will be complex and will require vigorous inter-departmental co-operation - but it can be done and, with effort, it can be done quickly.

Managing nearly a million homes to produce short-term, inexpensive and sustainable solutions must be given at least equal priority with building 75,000 new houses. Yet the latter seems to be the only thing that everyone talks about.

Housing represents one of a nation's most expensive and complex activities - yet it remains unmanaged. In other sectors of our society we all appear to understand and accept that unmanaged 'market forces' can rapidly become dysfunctional and monopolistic. So, we manage banks, we manage agriculture, we manage energy and we manage transportation and many, many other parts of our economy. Why don't we manage housing?

The idea of managing our housing as a coherent and integrated system brings new challenges. It makes us realise that such management needs to be guided by strategies and goals. As a nation, we have not even begun to address this.

Do we have a national policy on affordability? Not some airy-fairy, waffly aspiration - but a ratio of income to cost that is enshrined in standards and practice. Do we have a national policy on supported housing? Not just 'Council Housing' but a recognition that around a third of the population will need some form of housing support. Dublin has crossed a threshold where inner city housing will never be 'affordable' and will need supports for a wide range of workers, for example.

Do we have a national vision built on new behaviours, new values, new aspirations, and new demographics? A housing plan that is only about house building will not be fit for purpose for a newly emerging urban Ireland.

We have to re-centre the housing debate towards the wise management of our entire national housing stock. That debate will involve redefining how we think of the places that we call home.

Building is important, yes, but not in a vacuum. Housing needs to be managed first, and built second.

Conor Skehan is chairperson of the Housing Agency

Sunday Independent

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