Government urged to rethink housing policy as Brexit nears

The Government has been urged to rethink its housing policy in light of Brexit and “to apply more dynamic thinking” to solving the crisis.

A report by the Oireachtas Housing Committee criticises several aspects of Government policy, including its increasing use of rent supports such as Housing Assistance Payment (HAP), which, it says, is adding to rental pressure in the market.

The committee said it was concerned that current housing policy may not be sufficiently robust enough to withstand the potential impacts of Brexit and whether the Government's Rebuilding Ireland strategy "can remain as the current blueprint for tackling the issues of housing and homelessness".

Risk

It warned that the availability of skilled workers for the construction sector may be put at risk in the event of a no-deal Brexit, particularly if the process results in modifications to the Common Travel Area (CTA).

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In its evidence to the committee, Property Industry Ireland (PII), an umbrella group for the industry, said a minimum of 80,000 construction workers would be needed if the sector was to build enough homes to meet demand.

The committee also raised concern about the Government’s social housing policy, suggesting the targets laid down in Rebuilding Ireland may need to be be “reviewed and amended”.

It echoed concerns expressed by the Economic and Social Research Institute (ESRI) about the potentially negative impact of a “ Brexit-instigated downturn” on the Government’s capital budget, the chief source of funding for social housing.

The committee also warned that housing protections such as rent pressure zones (RPZs) may need to be strengthened in the event of a sudden increase in demand after Brexit.

While the committee’s report examined the potential impact of Brexit on the Republic’s housing market, it concluded that “most of the weaknesses highlighted exist regardless” and that the UK’s departure is only likely to worsen existing problems.

Issues

These issues need to be addressed if the State is to develop a robust housing sector capable of meeting current and future demands, it said.

The committee said it was next to impossible to predict the potential changes to the housing sector here from Brexit as the outcome of the process was so uncertain.

If Brexit leads to a shrinkage in Irish economic performance this could result in lower house prices, it suggested. Equally if the UK’s exit results in a decrease in immigration house prices could also fall. “However, if Brexit results in increased immigration to Ireland this will exacerbate demand and most likely increase housing costs as a result,” it said.

It recommended the Department of Housing draw up contingency plans for the short- to medium-term impacts on housing in the years following Brexit and “that a formal review process should be put in place to ensure that future housing plans are likely to remain relevant, notwithstanding shocks to the sector”.

“Priority should be given to ensuring the minimum level of disruption to construction material supply chains and cross-border labour,” it said.