Saturday 24 February 2018

All roads lead back to the State for a solution to our housing crisis

Stock photo
Stock photo
Paul Melia

Paul Melia

Solving the housing crisis is all about supply, but despite efforts from the Government, supply is still well below the level needed to meet demand.

In the absence of new homes coming onto the market and the hope - perhaps misplaced - that this will lead to price reductions and the stabilising of rents, the Government is desperately trying to come up with new policies to solve this crisis.

A few ideas have been floated. A levy on vacant homes. The prospect of vacant units being compulsorily acquired if owners refuse to rent or sell. A suggestion that owners of properties who are in nursing homes be allowed lease their homes without the income being subject to the terms of the Fair Deal scheme. Incentives to convert units above retail or commercial buildings to homes. All have merit and all have problems.

The CSO says there are about 180,000 vacant homes across the country. While local authorities dispute the number, there are certainly thousands that could be brought into productive use.

The imposition of a levy would focus owners' minds, but what level should it be at? Would doubling the property tax be sufficient incentive, especially for cash-rich owners who clearly don't need money, otherwise their properties wouldn't be vacant?

While compulsory purchase orders are in the armoury of a local authority to acquire derelict sites or properties, they are rarely used. Given our obsession with property rights, would it be possible for the State to swoop in and take control of under-utilised properties? A trip to the Four Courts beckons.

Living above the shop should be a no-brainer, but there is little or no uptake. The Living Cities initiative, designed to regenerate parts of our major cities, offers a tax break to refurbish properties but there appears to be little interest. More incentives are needed to tap into this potential source of homes.

The problems with tapping into properties whose owners are in nursing homes are manifest. People rightly rail against being told what to do and suggesting to someone that they are never going home - and, by the way, you should rent out the house - is difficult.

The Government is really tinkering around the edges. The private sector is failing to deliver homes, so the State must step in. Build affordable units on State-owned lands and sell for a modest profit. That could deliver units for just over €200,000 in Dublin.

Supply is key. The rest is just window-dressing.

Irish Independent

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