Developers and the housing crisis
Sir, – As Fintan O’Toole points out, there appears to be an assumption in the proposed Land Development Agency that building development companies, set up to maximise dividends to private investors, will behave differently this time around (“It is insane to look to developers to solve housing crisis”, Opinion & Analysis, September 18th). There is no evidence for this assumption.
However, Fintan O’Toole makes his own assumption that when it comes to housing local authorities will behave differently to the way they have behaved in recent decades. They have sold off vast amounts of housing stock and the management of the stock they retain requires radical reform.
A third option exists that has operated in other countries for many years but which still seems to be off the radar here, the option of social business. A social business operates for profit but does not pay dividends, instead reinvesting profits in the business or in other social initiatives. A well-run social business has the high operating standards, creative energy and desire for growth shown by many of our best for-dividend businesses but it is all channelled into social benefit. It pays competitive wages and hires the right talent but attracts people who are motivated by good as well as by gain.
The genesis of the Land Development Agency provides the perfect opportunity for Ireland to discover the social business model. The thousands in need of housing will be the immediate beneficiaries but ultimately the nation will be the winner in the creation of a new third sector. – Yours, etc,
Sir, – Taking Dublin as an example, the private sector Irish residential letting market has since the 1950s and until fairly recently met the needs of a fairly narrow group in Irish society, ie students and younger people seeking their first job. There were exceptions to this but broadly speaking the objective of most families was owner-occupation or a local authority house.
Against this background the notion that the private sector should have a role in housing families who in another era would have qualified for local authority housing is insane.
The mentality of landlords generally was formed during a period when tenants had few rights. From a landlord’s viewpoint the accommodation is being lent for a limited period. Landlords dislike long-term tenants, hence the norm is a 12-month letting. What sort of life can people make for themselves in terms of putting down roots and becoming part of a community in the face of the reality that they have no security of tenure? How badly this compares to the situation in Germany where residential letting agreements do not specify a term. Other than in exceptional circumstances tenants can live out their lives in a rented house or apartment, provided they satisfactorily discharge their obligations as per their letting agreement.
In the absence of some serious legislation governing the sector, and in spite of the availability of rent supplement assistance, the private letting market will continue to represent an inhospitable environment, particularly for lower-income families.
Home ownership is in decline. In 2004, home ownership hit an all-time high of 81.8 per cent. By 2014, the figure stood at 68.6 per cent. Is it an unannounced policy of Government to encourage renting rather than owner-occupation, or is the fall in home ownership another unintended consequence of ideology-driven policies, or perhaps the absence of any policy other than a blind faith in the private sector? – Yours ,etc,
Sir, – David Ryan correctly points to the large-scale disposal of council houses at knock-down prices (September 20th).
Following on from that, how often have we seen some of these former council house being privately sold at auction for enormous prices? – Yours, etc,
Sir, – Letter writer Mick Tracey says we cannot go back to building local authority ghettoes because, “This congregation of the poorest section of society led to severe social exclusion and the social and human outcomes in these ghettoised areas were and are problems to this day – high unemployment, lower than normal educational and health outcomes, early school leaving, crime and imprisonment, antisocial behaviour and drug addiction” (September 20th).
This is conflating multiple problems which have very different causes. Certainly, housing policies aggravated them when some local authorities decided to make certain estates dumping grounds for problem tenants. But those problems were not created by building local authority homes for people who could not afford to buy or rent their own, and that remains the case today. The vast majority of families in local authorities benefitted enormously from this forward-thinking policy, as did society as a whole.
The main reason we stopped building local authority houses in the 1980s was to cut public expenditure and reduce taxes. It was aggravated by selling off existing stock at knock-down prices, a policy fuelled by the same mindset. Now the populist policies of thirty years devoted to winning votes by reducing taxes, deregulation and slashing social infrastructure is being paid for by the next generation. – Yours, etc,