Missed opportunity to address causes of homelessness or provide rent certainty
Budget 2016 analysis: Housing
Dublin needs about 10,000 new homes to be built each year. In the past year, about 3,300 were completed.
The Nama sites should provide about 4,000 homes next year, three-quarters of which will be in the “starter home” price range, which Minister for the Environment Alan Kelly said means “affordable homes costing €300,000 or below”.
The Nama initiative will probably bring some hope to first-time buyers, priced out of the Dublin market and hamstrung by the Central Bank’s 20 per cent deposit lending rules, however it will not do much for those on the lowest rung of the housing ladder: those reliant on social welfare.
“This is a major missed opportunity to achieve a much-needed social dividend from Nama,” said Simon Brooke, head of policy at Clúid, Ireland’s largest housing association.
Nama will be required to provide only the same number of social housing units as any other private developer, 10 per cent, or 400 of the homes to be built next year.
“In Clúid’s view, Nama should be required to include 20 per cent social housing and another 20 per cent affordable rent to meet the needs of people who cannot afford to buy or pay market rents. This would provide 8,000 affordable homes, four times as many as the 2000 that will be provided.”
“Government action to address the lack of supply of new homes in certain areas, particularly in Dublin, was sadly lacking in Budget 2016, ” she said. “While the commitment from Nama to build 20,000 over five years is welcome at this stage, there is no indication of the time frame in which that will happen.”
Perhaps the most interesting housing initiative, and one which is aimed at renters, is the pot of money from the Bord Gáis sale: €10 million, set aside for an affordable rental scheme.
This initiative will be aimed at people whose incomes are above the threshold for State rental assistance but who cannot afford private rents. The detail on the scheme and when it will be made available is slight.
What those representing the bottom rung of the housing market had sought, but was entirely absent from the housing budget, was any measure relating to rent certainty. When asked yesterday, Kelly said it “really wasn’t a budgetary issue” and discussions would take place on the matter next week.
Minister for Finance Michael Noonan won’t back the Labour proposal to link private sector rent increases to the Consumer Price Index for four years, fearing rent restrictions will have a negative impact on investment in the sector.
Announcing the social housing measures yesterday, Kelly said he was reversing the reliance on the private sector to provide social housing.
“We have returned local authorities to direct housing provision. Direct housing provision is what they should have been involved in for over a decade, and they weren’t, and in my opinion that’s the reason we ended up the situation we’re in today.”
“Most of the increase in social housing spending will be on Housing Assistance Payment. This is a subsidy paid to private landlords and is not social housing,” Brooke said.
Finally, the issue of Ireland’s homeless families. Budget 2016 provides for an additional €17 million for homelessness but, according to Focus Ireland’s director of advocacy, Mike Allen, this is tantamount to an admission of failure.
“The increase in the homeless budget will essentially pay for the cost of increased emergency accommodation due to the failure to act to cut the rising numbers of families and individuals becoming homeless,” said Allen.
“It does nothing to address the causes of homelessness and to help keep people in their homes.”