Monday 19 August 2019

Lorraine Courtney: 'There's a simple cure for housing crisis - build more homes'

Must do more: Housing Minister Eoghan Murphy (right) with Lord Mayor of Dublin Nial Ring at the site of a proposed housing development at Richmond Barracks, Inchicore, Dublin
Must do more: Housing Minister Eoghan Murphy (right) with Lord Mayor of Dublin Nial Ring at the site of a proposed housing development at Richmond Barracks, Inchicore, Dublin
Lorraine Courtney

Lorraine Courtney

The message being pushed at the moment appears to be: Give up your dreams of owning your own home. Accept your fate of paying half your salary on rent. Live in the moment. Yes, the Government has some shiny plans but don't expect anything to change any time soon.

The causes of the housing crisis are clear: the lack of investment in social housing over three decades and the effects of the property bubble.

Our construction industry shrank dramatically with no new houses built at a time when our population was growing. It's still growing.

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The Central Statistics Office revealed we had an increase of 64,500 in the year to April 2018. Ireland's usually resident population was estimated to be 4.85 million and 90,300 persons had immigrated to Ireland in the year to April 2018.

Tougher lending restrictions were brought in for mortgages, which meant fewer people were able to buy their own homes. And so the private rented sector grew and grew. In 2006, slightly more than one in five households were rented. This had risen to almost 470,000 by 2016 - or 27.7pc of all households.

There are happy renters out there but there are many, many people trapped in overpriced, poorly maintained houses, with few rights and a cloying feeling of insecurity.

This increase in renters has been driven by ever-increasing house prices, stagnating wages, an ongoing failure to build enough social housing and for many people the impossibility of saving a deposit for a mortgage.

Twenty years ago, we all assumed that most people were either mortgage-paying homeowners or living in social housing. Private rentals were for students, bohemians and the unlucky.

Today's renters are not necessarily anti-home ownership. While there are always a few exceptions, by far the biggest reason people are renting over buying is they simply can't afford the latter.

Research published in the 'Economic and Social Review' shows households in the private rental sector are more than twice as likely to face high housing costs relative to income than those with a mortgage.

Lower income households spend on average between 40pc and more than 50pc of monthly income on their accommodation.

Rebuilding Ireland is the Government's official plan to increase the delivery of homes nationwide. But coming up with proposals inevitably involves rehashing ideas other governments have had before. Or trying to fix things you were responsible for messing up in the first place.

A lack of social housing is a major sticking point. It's crucial for people needing to escape from hazardous or overcrowded private properties, for those with disabilities, single parents, low earners and people living with domestic violence.

According to the Department of Housing, 4,251 social housing new-builds were built in 2018, missing the target of 4,409. However, it was an increase on 2017 numbers when just 2,297 were constructed.

Now, rather than increase the property tax and use it to fund more badly needed social houses for the 10,000 homeless, the Government has decided to put off its decision on the future of the tax for another year in a move that smells like an election bribe. Property owners will pay the same in 2021 as they did in 2013, despite an ever-worsening crisis.

Government policy over the past few decades discouraged local authorities from building social and affordable housing. The effects of a Fianna Fáil pledge to abolish domestic rates during the 1977 election campaign are arguably still causing chaos.

Opposition parties at the time accused Jack Lynch of buying votes, and the new Fianna Fáil government did go on to scrap rates for householders in April 1978. It promised councils they would not lose out but lots of local authority officials today would argue that life has never been the same since rates were limited to commercial properties.

With austerity, local authorities had to cut delivery of homes even further. Ever since 2011, we started sourcing most new social housing from the private rental sector via the Rental Accommodation Scheme and later the Housing Assistance Payment.

In Rebuilding Ireland, just 15pc of social housing until 2021 are new builds by local authorities and housing associations.

  • Any government approach to housing that ignores the supply side will ultimately run into a problem. If there aren't enough homes to go around, someone must lose out.

It's not all about supply either - it is about the type of supply. The Government points to an increase in private house construction as evidence that policies are slowly working. But lots are being sold or rented at unaffordable prices for those of us looking to rent and buy.

Last month, a UN special rapporteur on housing sent a letter to the Government saying it had facilitated housing financing through "preferential tax laws and weak tenant protections among other measures". The report was very critical of Ireland for allowing vulture funds buy up properties, resulting in sky-rocketing rents.

The Government seems to still believe that the private sector alone can fix the crisis. A real solution would no doubt involve both private and public sectors contributing, but driven from the top.

If more homes were available to rent and buy, there would be no housing crisis. The answer to our crisis is simple: build more houses, all kinds of houses, without letting politics get in the way.

Irish Independent

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