Irish housing policy aggravating homelessness, says EU Commission

Brussels says rising rents and insufficient construction behind more homelessness


The European Commission has strongly criticised the Government’s housing policy, suggesting rapidly rising rents, insufficient residential construction and a lack of affordable and social housing were driving increased rates of homelessnes in Dublin and elsewhere.

In its latest assessment of country-specific challenges across the bloc, the EU’s executive arm said the shortage of housing had triggered a 23 per cent jump in rents since 2015, which it said was the highest in the EU.

It also noted that, while demand for social housing stood at approximately 72,000 units, there were just 10,000 planned for delivery in 2019.

While a further 17,000 people are to be assisted through the various rent support schemes, this risks exacerbating rent increases in the already supply-constrained private rental market, the Commission said.

It also suggested a large number of social homes, particularly in the Dublin area, were unoccupied “thus further aggravating the situation”.

The Commission said house prices in the Republic have been growing “at a rapid pace for a number of years but have slowed down recently”.

It said price growth here was largely a function of supply constraints but that there was no evidence house prices were overvalued despite suggestions that many workers are priced out of the market.

The commission’s analysis comes amid a slowdown in property price growth nIn its latest winter assessment, the Commission said half of EU member states, including Ireland, were experiencing economic imbalances albeit for different reasons. In particular, it highlighted the high ratio of non-performing loans in banking sectors here and elsewhere, and the high level of public and private debt.

As economic growth slows, “challenges vary significantly across countries and call for appropriate and determined policy action”, it said.

Thirteen states were rebuked for their economic imbalances, two more than in last year’s assessment. Of them, Italy, Greece and Cyprus were found to have “excessive” shortfalls that would require swift corrective action.

Bulgaria, Germany, Ireland, Spain, France, Croatia, the Netherlands, Portugal, Romania and Sweden also have imbalances although less acute than the three Mediterranean states.

It said Irish economic growth remained robust, noting real gross domestic product (GDP) grew by 7.5 per cent year-on-year in the first three quarters of 2018, well above the euro area average, but was inflated by multinational companies. Some of these companies were still using the State’s tax rules for what it called “aggressive tax planning structures”, albeit some steps were being taken to limit such practices.

The Commission also noted Irish economic growth and greenhouse gas emissions were “yet to be decoupled”. “The Government still needs to define a technological pathway and the policy and investment needs to ensure environmentally and socially sustainable development,” it said.