Thursday 29 September 2016

A housing crisis caused by sterility of thinking

Published 09/06/2016 | 02:30

Rent prices have went up 8.6pc in the last year (stock photo)
Rent prices have went up 8.6pc in the last year (stock photo)

History repeats itself mostly because we either fail to see or wilfully refuse to recognise its patterns. This is evident in the housing crisis. Despite the fact that boom and bust cycles come with appalling social costs, we seem incapable of insulating ourselves from them. It was taxpayers who shelled out for the massive costs left by failed banks and reckless developers - it is also taxpayers who are hit hardest by a decade during which practically no building took place.

  • Go To

So those who bore the worst of the recession - mostly the young - find themselves locked out of the property market. As a consequence of the housing shortage, rents in the capital and around the country actually exceed those at the height of the boom, as we reveal today.

Nationally, prices are up 8.6pc in the last year.

Only 12,666 units were built, but more than twice that number is required. If the Government needed a spur to galvanise it to address the issue, it need wait no longer. To date, governments have made sympathetic noises about doing something, but the only thing going up is the price of rent and property.

There has been a dearth of imagination and a sterility of thinking in tackling the crisis. Is it any wonder that the harvest from the same old withered vines has left such a bitter taste?

The gap between aspiration and action has yet to be addressed. Hopefully there may be some sign of an initiative. The Government is considering buying social housing with a combination of State funds and private investment. This would keep the cost off the State's books. A State-backed fund would be set up and this would also use finance from private investors. Ultimately, this would allow the State to lease the properties to voluntary housing agencies. This is some progress - but given the scale of need, much more needs to done.

Too much is bad for health, even money

If there is one Government department that has been a graveyard for enthusiasm and honourable intentions it is surely Health. Not so long ago, a resolute Leo Varadkar vowed to make his mark by reining in the department's budget, which has been allowed to run like a rogue elephant through annual estimates.

Now new man Simon Harris has hardly got his feet under the desk when we hear an additional allocation of €500m for the year has been sanctioned. To paraphrase Benjamin Franklin, money doesn't necessarily solve all problems. An excess of it can sometimes create them. The more a government department can have, the more it wants. Instead of filling a vacuum, it can create one.

That is where management and accountability kick in. This extra money will be used to fund another HSE over-run. There are good reasons why it is not always easy to predict precisely the demands on a health service, but there must not be a presumption that the books do not need to balance. Mr Harris has declared that the greatest need for budget accountability and control is in the acute hospital sector. He must deliver on that. The Revised Estimates for Public Services 2016 set out a gross expenditure estimate of €55.3bn for 2016. Tony O'Brien, director general of the HSE, has welcomed the extra funding, saying it allows a "realistic target to be achieved by year end". On the subject of reality, it is clearly unrealistic to expect that the taxpayer will stump up for every blow-out in Health. From the outset, Mr Harris must make this abundantly clear if he is to fare better than his predecessors.

Irish Independent

Read More

Promoted articles

Don't Miss

Editor's Choice