Political focus pivots from pandemic to a housing crisis with ‘no quick fix’

Analysis: Many voters blame Fianna Fáil and Fine Gael for policy failures behind housing shortage

Even those with stable employment and decent salaries are findng  that rising house prices and tough rules on how much banks can lend result in  unbridgeable gap between what they can afford, and what the market offers them. File image: PA

Even those with stable employment and decent salaries are findng that rising house prices and tough rules on how much banks can lend result in unbridgeable gap between what they can afford, and what the market offers them. File image: PA

 

It didn’t take long. According to the Taoiseach on his way into Cabinet this morning, housing - not the pandemic - is now the Government’s “number one priority”.

As the vaccine rollout gathers pace, hospital numbers continue to fall and deaths from Covid-19 are all but eliminated, the pressure on the Government from the housing issue rises in inverse proportion.

Many Government and opposition politicians have expected this for a long time; but they have still been taken aback by the speed of the transition.

And the issue is even more politically pungent for the coalition. However dissatisfied voters might have been with the Government handling of the pandemic - polls show they were very happy with it last year, but their view changed drastically after Christmas - they hardly regard the advent of the pandemic itself as the Government’s fault.

But many voters blame Fianna Fáil and Fine Gael for the long series of policy failures on housing which have led to the current shortage of housing.

This is not a 2021 problem - over the last decade, home ownership has collapsed to its lowest level since the 1970s.

Younger people, many of them squeezed by insecure employment on one side and rising rents on the other, see home ownership as an unrealistic prospect.

Even those with stable employment and decent salaries find that rising house prices and tough rules on how much banks can lend leave an unbridgeable gap between what they can afford, and what the market offers them.

And the rents they pay are higher than ever.

The ESRI report this morning, which found that a combination of stagnant wages and higher housing costs have left young workers in Ireland financially worse off than their parents, only told politicians and younger people what they have known for a long time.

The shortage of housing that is at the root of their difficulties is going to get worse before it gets better, many people in Government fear, as the economy restarts and young people seek to move out of their parents’ homes.

Deposits saved during lockdown will push up prices further - and that’s even before competition from investment funds weighs in. There is something of the perfect storm about all of this.

Today the Minister for Housing Darragh O’Brien will brief the Cabinet on plans to limit the role of investment funds in the market, though there is reportedly much work to be done before proposals are ready.

But O’Brien will be telling his Cabinet colleagues what many of them know already - there is no quick fix to the housing crisis. The politics of that are plain to see.

Some people in Government worry - and some in the opposition foresee - a sort of generational political uprising on the issue of housing. It is an issue which, for obvious reasons, is heavily influenced by age.

This morning’s ESRI figures show that while more than 60 per cent of those born in the 1960s lived in a home they or their partner owned by age 30, this had fallen to 39 per cent for those born in the 1970s and 32 per cent for those born in the early 1980s.

Those born in the 1980s are staring at 40 as their next big birthday. Most of them would have expected to own their own homes by that landmark. Those born in the 1970s are staring at their 50th birthday: they will feel the sting even more acutely. And they will focus on the politicians and the policies that have led to this.

At last year’s general election, voters said that health was the most important issue, according to the exit polls. But housing wasn’t far behind. And among younger voters, housing was by far the most important issue.

Not surprisingly, current political opinion polls bear out this generational fracture: Sinn Fein, the opposition party that most “owns” the housing issue, enjoys the support of 43 per cent of the 18-24 year-olds, according to the most recent Irish Times/Ipsos MRBI poll; among the 25-34s, it’s at 41 per cent.

Those in Government acknowledge they are confronted with a pressing social crisis that is going to become more acute in the coming months.

They are also facing a political challenge of daunting proportions.