Carrots have failed to get houses built... it's time to use the stick
As house prices continue to rise, the Government appears no closer to solving the problem of affordability. There's a good reason why. Why would any builder commit to delivering homes for €300,000 or less in Dublin, or €250,000 in Cork, when simply putting them on the market will fetch far higher sums?
The Central Statistics Office data on house prices tells us that both nationally and in the capital prices continue to rise.
The highest house price growth so far this year was in south Dublin, at 11.8pc. There's little wonder that no developer building in Dún Laoghaire-Rathdown would agree to sell homes at an affordable price when prices are not just high, but continuing to rise.
But it's not just the 'Stabilising Rents, Boosting Supply' scheme that appears to be such an abject failure. Earlier this week, the Irish Independent revealed that developers and local authorities had yet to agree deals to provide affordable homes on sites across the country in return for the State funding essential infrastructure on sites under the €225m Local Infrastructure Housing Activation Fund (Lihaf).
This is despite councils and local authorities having more than four months to strike a deal.
The Government has a number of options.
There is a compelling case to fast-track the vacant site tax, due to be introduced from January next year. This will impose a minimum levy based on 3pc of the value of undeveloped land.
It's too low. In areas identified as being in need of housing - Dublin, Cork, cities including Limerick and Galway - it should be at a level to force landowners to develop, or sell to someone who can.
There's also a good argument to be made for the State to step in and build homes. On publicly owned land, it can deliver a new house or apartment for less than €200,000. There is no shortage of public land banks - local authorities, the Housing Agency, OPW and other State bodies control thousands of acres, many of which are in areas of high housing demand.
This could be a lifesaver for thousands of families on middle incomes who earn too much to qualify for social housing but who struggle to pay rising rents or save a deposit to secure a mortgage.
Many of these are key workers; nurses, gardaí and teachers who devote themselves to public service but who struggle to find a home to call their own.
Carrots appear to have so far failed to achieve the desired result. Should the Government now move to wield a stick?