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Can these six ideas help fix Ireland’s housing crisis?

Taoiseach says he wants 2023 to be a ‘year of inflection’ in the housing crisis

Taoiseach Leo Varadkar says he wants 2023 to be a “year of inflection” in the housing crisis – having called a housing summit today as a “point of reflection”. But what are the ideas discussed today, can they work, and if so, how quickly?


This seems to have been the biggest focus of the day. Sources at the meeting said that there was a major push from some of the property and development companies there to overhaul some Government schemes aimed at making stranded apartment blocks viable.

Largely because of changed financing conditions and higher interest rates, some builders cannot complete units with planning permission because the financial models underpinning them no longer stack up. They’re asking for subsidised funding to kick in at the start of the development process, rather than the end, with two of Minister for Housing Darragh O’Brien’s flagship schemes, Croí Cónaithe Cities and Project Tosaigh, in their sites.

Afterwards, Varadkar also spoke about purchasing large quantities of homes in advance, guaranteeing a certain price for a percentage of a development and hence “derisking” it. With a shortfall in housing commencements, the aim is to convert permissions into units in 2024, when the drop-off is predicted to bite.


Spending more

There is obviously a relationship between the money available for housing and the level of outputs – O’Brien consistently points to significantly bigger capital budgets for housing compared with previous years, and how the Coalition is recovering from a decade of underinvestment (although the Minister insisted today this isn’t a dig at his Coalition partners). Varadkar today insisted there was no barriers to spending growing “so long as the economy is strong and so long as the public finances can support it”.

“Of course we’re willing and want to spend more money resolving the housing crisis.” However, it’s not that straightforward. As the Department of Finance has previously flagged, there are constraints in the economy around sourcing enough workers, materials and the capacity of the planning system which can’t be solved with fistfuls of cash.

Sourcing more workers

Since 2019, rules governing trades like bricklayer and plasterer have been relaxed – removed from the list of occupations ineligible for employment permits. Many construction sector workers from outside the European Economic Area are eligible for a general employment permit. However, the Economic and Social Research Institute has called for construction trades such as carpentry and plumbing to be added to the State’s critical skills list.

There is also an upturn in the number of people taking up apprenticeships, but the legacy of the crash, which tarnished the sector for a generation of young people and saw many tradespeople emigrate, still has a big impact here. The Taoiseach said today that Ireland is facing this challenge at the same time many other countries are competing for skilled labour, meaning the country may struggle to attract people in, no matter what reforms are adopted.

Emergency homeless measures

The eviction ban hasn’t been successful in stemming the flow of people into homelessness – at least not yet – with record figures released before Christmas. It is due to expire at the end of March – leading to fears that whatever impact it is having on suppressing new homelessness will evaporate and make the situation worse. O’Brien has been slow to call for an extension, mindful that doing anything seen to force small landlords from the market will not help his cause.

Varadkar confirmed it was discussed at today’s summit, but he conceded there wasn’t unanimity on the issue. Other steps discussed today included prioritising people in emergency accommodation for social housing, but the Taoiseach again said some had warned of the “negative consequences of unintended consequences” arising from such a step.

Expanding measures for renters

Budget 2023 saw the introduction of an annual €500 in tax relief for renters. The measure does little to solve the underlying problems in the rental market but it does address, to an extent, some of the affordability issues renters face, even if it is not the step change they need. Politically, it’s seen as a bulwark against losing more and more younger voters, so more measures like this, or an enhanced version, could prove politically popular.

Tax breaks

Probably the most politically contentious, if only because the Opposition will salivate at the prospect of attacking a Fianna Fáil Housing Minister for introducing tax breaks to encourage property development. Nonetheless, it was discussed today, the Taoiseach saying that “nothing is off the table”.

O’Brien has been guarded in his public comments, but behind the scenes proposals have been under development for some time. The theory goes that Michael McGrath may be more open to the idea than his predecessor in the finance brief, Paschal Donohoe. Targeted tax breaks for apartment development in urban areas, capital allowance tax reliefs or a cut in VAT are all under consideration, as are tax breaks for smaller landlords to encourage them to stay in the market.