Business Commercial Property

Friday 23 February 2018

Change of mindset and VAT cuts are needed to solve the housing crisis

The right moves

Flowers and cards pictured in the door way where Jonathan Corrie died on Dublins Molesworth Street. Photo: Frank Mc Grath
Flowers and cards pictured in the door way where Jonathan Corrie died on Dublins Molesworth Street. Photo: Frank Mc Grath

Paul McNeive

It's amazing how quickly we get used to extraordinary events, and rapidly come to regard them as routine.

When Jonathan Corrie died in a doorway outside Dail Eireann, it seemed to be the "wake-up call" that would change everything. It changed little. Last week, three homeless people died and the Minister for Housing, Planning and Local Government has called an emergency meeting tomorrow with the chief executives of the 31 local authorities.

But can the existing mindset of government ever see us break out of this crisis?

Frustratingly, the problem is not money. Approximately €6bn is already allocated under the myriad schemes and programmes intended to solve the housing crisis. The biggest problem is a lack of focus, with too many initiatives underway, tinkering around the edges of a bureaucratic jigsaw, most behind schedule, and some having the opposite effect to that desired (e.g. the Help to Buy scheme and the Rent Pressure Zones have increased prices and rents).

The problem is the lack of supply of new homes and it is encouraging to hear the Minister saying this week that the only solution to the problem is that the State must build more houses. Indeed, it was the castration of the local authorities, moving the provision of social housing, and the oversight of building standards, into the private sector, that has proved disastrous.

However, if Minister Murphy's summit results in a promise to try and do everything quicker, and a few new ideas, then nothing much will change. The problem for the Minister and the ceos is that real change only tends to happen when we are out of our comfort zone. The Minister is going to have to bring what will appear to be an unreasonable level of intense pressure and focus onto the ceos in order to get results. The local authorities proved over decades that they can build good housing - now is the time to reignite that.

Radical change is needed. The local authorities have already identified the available sites in their areas, and they know from their housing lists, how many homes and what types of homes are needed. By the end of next week every local authority should have a proposal to the Minister as to what they want to build, and a cost estimate.

The following week the Minister should publish the list of schemes to go ahead, the name of the county manager responsible for their delivery, and the time limit. This plan should be published on the Department's website and updated weekly, clearly showing which ceos are performing, and which are failing to deliver. Local authorities have all the powers needed, e.g. planning and compulsory purchase and should immediately procure the design teams needed, and then contractors.

The Minister should delegate all of his other work, to focus on guaranteeing that funding flows smoothly, and on a weekly basis ring every ceo for a progress report.

The lack of supply and resulting high values in the private sector has pushed many from the "affordable" sector, into the "social" sector, accelerating homelessness. The single biggest "quick win" here will be to halve vat rates for five years and spark a wave of new construction.

Unless Minister Murphy and the local authorities are prepared to take a leap out of their comfort zone, there are bleak winters ahead for the homeless.

MAKING A SPLASH FOR A GOOD CAUSE

It was a timely privilege to act as M.C. last week for the Dragons in the Docks event, which raised more than €200,000 for the Simon Community. Sixty firms from the property industry entered boat racing teams, with Sisk emerging as overall winners.

Hibernia REIT CEO Kevin Nowlan bravely volunteered to be the first victim in the 'Dunk the Boss' event. Nowlan, in suit and tie, survived precariously for several minutes before someone hit the target and catapulted him into the water. The event was a great initiative by the property industry.

Indo Business

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