Generation Rent and home ownership
Sir, – I believe that the views expressed by Rory Hearne are indicative of a failing on the part of Irish housing advocates to pursue constructive, realistic policy goals (“Generation Rent locked out of home ownership”, Opinion & Analysis, April 18th).
Mr Hearne argues that, “ . . . Irish and international experience shows that only non-market . . . providers guarantee a sufficient supply of affordable housing”. This is not so. The non-market housing system is vital to ensure universal housing provision and should be expanded.
However, it can only function well when the mainstream housing market (private rental and home ownership) is functioning too.
Otherwise, it will be swamped with demand from people who would otherwise have been able to secure an affordable tenancy in the private market, which is precisely what is happening right now.
Ireland’s central problem, after years of crash-related underbuilding, is insufficient housing investment in new private rental supply.
Why then does Mr Hearne lament the fact that “investors bought one-fifth of all homes in 2017”?
He depicts this type of investment as “speculative property and financial investment” that adds to demand but neglects to mention that, particularly when new stock is purchased, it also adds to supply.
And who is going to provide the additional rental stock in the private market if not investors?
Buy-to-let investment in almost every comparable international housing market is driven by small investors who play a vital role in ensuring the rental market is supplied.
For Mr Hearne, this is a “rentier class” whose “interests have been prioritised over citizens”. In fact, they are mostly mum-and-dad investors looking to create a nest egg who, in the process, provide a home for their tenant.
Mr Hearne makes some salient points about supply side issues in the housing market, but instead of spending more time on how those barriers ought to be removed to get builders building, he reverts to arguing for a programme of social housing expansion which, even in the terms he outlines, has no chance of meeting total demand for housing in the community.
As someone who has been involved in social housing policy development at a senior level in Australia for many years, I would urge Mr Hearne and other Irish housing advocates to keep banging the drum for more investment in social housing, but to desist from perpetuating the misleading impression that a major expansion of investment and supply in the mainstream housing market is not also vital to deliver affordable housing for Irish citizens. – Yours, etc,