Wednesday 12 December 2018

Ronan Lyons: A win-win way to get the homes we need and solve the housing crisis

By redeveloping our army barracks, industrial estates, bus depots, ports and golf courses, Dublin and the other major cities will go some way to meeting the demand for urban living in Ireland currently and over coming decades. Stock photo: Joe Giddens/PA
By redeveloping our army barracks, industrial estates, bus depots, ports and golf courses, Dublin and the other major cities will go some way to meeting the demand for urban living in Ireland currently and over coming decades. Stock photo: Joe Giddens/PA

Ronan Lyons

The recently launched Land Development Agency has the potential to stem the tide of an ever-increasing shortage of urban homes. Its remit will cover mainly State-owned land but will encompass some land assembly of other, privately owned sites.

By redeveloping our army barracks, industrial estates, bus depots, ports and golf courses, Dublin and the other major cities will go some way to meeting the demand for urban living in Ireland currently and over coming decades.

Based on trends in urbanisation, household size and population, the country needs something like 1.8m urban apartments in 50 years' time. Given that the country is starting with very few, and allowing for some obsolescence, that means we need to see about 700 apartments built every week for 2,500 weeks.

Vary the assumptions and the exact answer changes, of course. But any reasonable projection of the future demand for housing points to a number of urban homes - apartments mainly - so large that not even the redevelopment of State lands alone will suffice. As reported in this column a few months ago, in Dublin, for example, there is a need for an average of 20 new homes on every single acre of the city.

Where will these new homes come from, then? We, as a society, have made a decision not to allow the demolition of our older housing stock. It's a principle I largely agree with - the city is richer for having an architectural heritage.

But it means that much of our urban cores are, therefore, off limits when it comes to adding all those new homes that are needed.

This is one reason that publicly-owned lands represent such an opportunity.

The other obvious opportunity is to redevelop the building we don't like. If policymakers believe, for example, that some of the urban apartments built under the various tax breaks of the 1990s and 2000s are below the minimum standard today, then perhaps we can revisit those sites.

Rather than wait for them to come down, the State should proactively seek their redevelopment. The aim here should be a win-win for all involved.

Read more: When homes were raffled in Ballyfermot to hopeful families

Suppose the State allows 'upzoning' - specifically building taller on the same site. A condition of the upzoning should be that the number of homes increases by at least a certain fraction - say 50pc.

If apartment blocks are in disparate ownership, a model should be explored for guaranteeing right-to-remain in return for a State-sanctioned buy-out clause. In other words, the State would support a CPO (compulsory purchase order) in return for a guarantee that, once the new development is complete, the existing residents are rehoused - and housed somewhere else during works.

This would mean that a Celtic Tiger block of 100 units would be demolished and 150 better units would be put in its place, with existing residents offered a unit in the new building. The 'surplus' of 50 new homes should then be split between the developer and the State.

The 25 new units for the developer are their major 'win'. The other 25 units would then be for social housing - the 'win' for society. The cost for society, other than the disruption of rebuilding, would be to allow a taller building. (In fact, there's a benefit there too as we no longer have to look at some of the relatively poor building erected in haste during the Celtic Tiger.)

With minimum standards for apartments that are far removed from the 1990s, a 50pc increase in the number of homes may translate into a 100pc increase in space required. This would mean, effectively, a doubling of height - usually from four to eight storeys.

That seems to me a small price - if indeed it is a price at all - to pay for ensuring a ready supply of good quality apartments, for existing residents and for new residents, both market and social, in the years and decades to come.

Not only that but I would also recommend that the State has one final condition when allowing this urban transformation: that the social housing units be cost-rental and managed by an approved housing body.

Like Cluid and Tuath, housing bodies that manage social housing tenants have a clear expertise in managing tenants. By putting them as effective management companies in these new blocks, they can ensure social and market housing residents are integrated and without the fear of anti-social behaviour that many have about social housing.

The cost-rental approach would also ensure that no tenant has to move out if they are temporarily out of work. Cost rents mean that if market rents are not affordable, the tenant pays a set fraction of their disposable income and the State pays the balance - but only as long as needed.

When designing policy, it is necessary but not sufficient to think just in terms of costs and benefits. It is also important to think of the status quo and how to understand and overcome the biggest fears or objections.

With the system above, there is a win-win-win, with better quality housing stock, suitable for our future needs, available to all regardless of their means.

Ronan Lyons is assistant professor of economics at Trinity College Dublin, and author of the Daft.ie reports.

Sunday Independent

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