Tackling the housing shortage
Sir, – Praise the Lord, the Irish economy is surging back to rude health, with the ESRI telling us that Ireland can expect no less than 3.4 per cent growth this year (Business + Technology, August 7th) making our country “the fastest-growing economy in the euro sector”. Does anyone remember when we heard this before? Well, about a decade ago. However, every silver lining has a cloud and it seems that, according to the Construction Industry Federation and its spokesperson, Tom Parlon (Progressive Democrat and Minister in the FF/PD coalition that banjaxed the Irish economy in the first place) Dublin is experiencing a “crisis” with an “urgent” need for new houses to be constructed. Mr Parlon explains that construction is a “no brainer” (arguably recent history has proven that) and that if only the funding and legislation were in place we’d be entering another era of milk and honey with masses of jobs and billions flowing to the cash-starved exchequer. Finally, the ESRI is concerned that house prices are undervalued by up to 27 per cent. Examining statistical models from 1981 to 2013, it finds prices languishing well below their “fundamental” values. My understanding is that the intrinsic value of any item, including property, is a value in constant flux and dependent purely on the prevailing market situation at a given time. So please, what on earth is the “fundamental” value of a house? Yours, etc,
Sir, – If there is a shortage of houses in Dublin, and houses are lying empty in other parts of the country, as stated by the ESRI, then the building of more houses in Dublin only addresses one aspect of the problem. Towns and villages in Mayo, Sligo, and Roscommon will continue with the blot on their landscape of empty houses and apartments until 2021 and beyond.
What about an alternative that encourages people to move out of the major urban centres and breathes life back into those areas still struggling to recover from the most glaring errors of the building boom? Technology has moved leaps and bounds in recent years, but instead of using this technology to encourage employee mobility and remote working, most employees are desk-bound in the cities, many of them with long commutes from rural locations.
While there are many jobs that would not be ideally suited to having employees off site, for some companies there may be benefits to not maintaining expensive office space for workers who could work efficiently from home. Central hubs in small towns where workers share facilities when needed could also be an option and could bring economic and social benefit to those towns. What about a tax break for employers who facilitate employees working from home? It’s time to question the notion of having employees on-site under the eye of bosses and begin to move towards smarter working that benefits employees, smaller towns and communities and brings life back into the ghost estates. Yours, etc,
The Old Distillery,
Sir, – Many groups are suffering to some extent in the current housing market – homeowners, first-time buyers, landlords and tenants. It would seem better to deal with each group’s difficulties on their own merits and to be non-judgmental and sympathetic to everyone’s circumstances, but all too regularly one group in particular is singled out for abuse. This time the attack on landlords comes from Paul Kean (August 7th).
Owners of investment properties purchased at the height of the boom are in considerable difficulty, at least some of this can be blamed on Government policies. Yet they get little sympathy because they are misrepresented as being foolish, imprudent and greedy.
Many ordinary people who invested in houses were indeed “not the sophisticated investors they thought they were” but most were trying to make investments that they thought would work out. We thought we were being prudent, but we were not. We too occasionally use the term “investment” in inverted commas by way of irony, and in lighter moments might refer to the property as an “asset” no matter how mired in debt it (and we) may be.
Some expenses that landlords face are indeed the Government’s fault, for example the portion of mortgage interest that is not recoverable as a tax expense, uniquely for a business expense and which means that many landlords end up paying tax on a loss. And there is a real point about the property tax. While Mr Kean notes that such a tax exists in every developed property market it is not often the case that the tax is payable wholly by the property owner. Usually the occupants of a house pay the tax (they, after all, are the ones receiving the local services that the tax is supposed to pay for).– Yours, etc,