Two reports this week underlined the extent of the housing challenge facing whichever parties form the next government. Figures from the Construction Industry Federation estimated that just over 8,000 of the 21,000 homes completed last year were made available for sale to the public. Meanwhile data from EU agency Eurofound estimated that more than 47 per cent of Irish young people aged between 25 and 29 were living at home in 2017, up from 36 per cent 10 years earlier.
Notwithstanding the fact that household formation generally happens at an older age now than in the past, this is clear evidence that many young people have no choice but to stay living at home. The percentage doing so in Ireland is well above most other EU states, with around one quarter of UK people in the same age group living at home and significantly lower figures in most other northern European countries.
There have been some recent signs of increased housing supply and stabilising prices – and the latest CSO figures show a monthly fall in private rents in January, with the annual rate of increase now 3.9 per cent. But much more remains to be done.
Whoever goes into government will realise that their term may, in large part, be defined by what they do about housing
Structural problems remain in both the rental and housing markets – and both are, of course, connected. The vast bulk of apartments are being sold to investors, leaving few available for private purchase. Developers say this is the only profitable route for building these units. While long-term institutional investors – as opposed to those looking for quick profits – should have a place in the market, there should also be apartments available to purchase, and rent, at a reasonable cost.
In the housing market, too many younger families are being priced out of city centres and forced into long commutes and a car-based lifestyle. The outgoing Government has plans to address the shortage of supply in urban areas, built in part around a new Land Development Agency designed to use State land holdings. This would appear to be at least part of the solution.
Local authority building at a more rapid rate – and building by other housing agencies – will also form part of the way forward, particularly for social and affordable properties requiring an element of State subsidy. But overcoming the shortage of builders and other skilled workers will be a key challenge. And a way needs to be found to streamline the delays in the planning and legal process and get all the agencies and arms of the State working clearly in the same direction.
Whoever goes into government will realise that their term may, in large part, be defined by what they do about the housing and homelessness crisis. It won’t be solved quickly, but what is required is a clear and funded strategy and a realistic approach to what needs to be done.