Solving the housing crisis a test of this Government
Housing mess is a chance for the parties in power to show ‘new politics’ can work
Minister for Housing Eoghan Murphy: At the Customs House yesterday, he hosted another emergency summit on homelessness. Nobody will be surprised if there will be yet more. Photograph: Cyril Byrne
The last great problem to cleave Irish politics will end with the soft landing of paper on hall floors, and the short clack of the letter box as the postman goes next door to deliver the same solution.
The economic crisis upended politics as voters took their anger out on one party after another, with water charges the totemic issue that finally crystallised that anger. As usual, the protest came when the worst of the crisis had passed and people felt freer to voice their outrage. Parties previously in favour of charging, such as Fianna Fáil, suddenly were against it. Others were destroyed, notably Labour, which suffered for implementing a policy it knew would do untold damage to its own prospects.
But water was always possible to fix quickly in political terms, even if it took more than a year since the last general election to stage manage it. The longer-term consequences of the fix are another matter.
The Government hopes the arrival of water refunds in letter boxes before Christmas will settle the issue once and for all. However it is now faced with the defining issue of its term, and likely that of the next government, and one that cannot be waved away so easily.
If water charges showed the confidence and supply arrangement at its worst – with squabbling over minute details taking up endless time and energy – the housing crisis is a chance for the parties to the minority government deal to show that “new politics” can work. If we are in for a series of minority governments, housing will transcend administrations led by Fine Gael and Fianna Fáil. If anything calls for consistency in policymaking, this is it.
At the Customs House yesterday, Minister for Housing Eoghan Murphy hosted yet another emergency summit on homelessness. Nobody will be surprised if there will be yet more, with this winter expected to see numbers seeking help continue to rise.
When Leo Varadkar took over as Taoiseach, he said the housing crisis would not be solved within the lifetime of this Government, a position echoed by Murphy.
Notwithstanding the fact that Fine Gael have been in government since 2011 and underestimated the challenge at the outset of its first term in office, nobody can seriously disagree with them. But there is now a chance to settle on a definite policy approach and allow it take its course.
The changing plans and ministers have already been well documented, from the Construction 2020 strategy launched in 2014 by Enda Kenny and Eamon Gilmore to Simon Coveney’s Rebuilding Ireland, via Alan Kelly’s initiatives.
Tinkering with policy
Nor is Varadkar entirely innocent when it comes to tinkering with housing policy. It was only last October that Coveney unveiled his Help to Buy scheme for first-time buyers of new-build homes. By May, during the Fine Gael leadership contest, Varadkar was hinting that it could be scrapped, although it now seems a rethink on this position is under way in Government. The scheme could be retained in the budget, albeit in amended form.
Policy ideas to solve the housing crisis come and go, and despite the back and forth between Fine Gael and Fianna Fáil this week on the issue of VAT cuts in the construction sector, there is common ground between the two.
In fact, they often advocate the same policies, albeit at different times. Just last year, Fine Gael distributed a discussion document during its government talks with Independents, and it contained the following, familiar-sounding proposal: “We will introduce a temporary reduction of the rate of VAT from 13.5 per cent to [9 per cent] on new houses and apartments delivered within a set period of time.”
Micheál Martin has called for more social houses to be built and more money to be made available to do so. Varadkar has committed to a significant investment in social housing in the capital investment plan to be announced later this year.
Barry Cowen, Martin’s housing spokesman, has called for Nama to take on more responsibilities to allow it raise finance and build social houses; the idea of a new agency has been discussed in government circles.
Michael Noonan’s decision in 2012 to grant a capital gains tax exemption for investors who bought property by the end of 2014 and held the property for seven years has been criticised by Cowen. That policy, too, is understood to have fallen out of favour among some in Government as concerns over land hoarding rise.
The similarities, like so much between Fine Gael and Fianna Fáil, are there to see. It is not too much of a stretch to imagine that they could, within weeks, agree a common approach to housing that would last for years and avoid the endless policy relaunches and resets.
It would require generosity on both sides, of course.
Murphy has said ideology will not be an issue in his efforts to tackle the crisis. Counterintuitive policy for a Fine Gael Minister, such as changing Noonan’s policy and aggressively tackling land hoarding, would prove that to be true.
Cowen says the housing problem is now so acute that he is willing to engage with Fine Gael. Leaving behind the tit-for-tat that has characterised exchanges between Fine Gael and Fianna Fáil would speak volumes.
Not only is solving the housing crisis a test of this Government, it will be a test of the next, and it calls for a consistency in policy that will span the two main political parties.