Housing and the European Union

 

Sir, – Jennifer Bray quotes unnamed sources as claiming that subsidies for affordable housing developments on State lands in urban areas could fall foul of EU state aid rules (“How do Opposition party policies on housing stack up?”, Analysis, May 14th). This misleading argument is used by some to blame the EU for the lack of social and affordable housing here or to shut down the conversation on the role of the State in the supply of social and affordable housing, or both.

The European Commission has made it very clear that it is up to each member state to define its policy on services of a general economic interest (SGEI) into which social and affordable housing falls.

The only role the European Commission has is to ensure that the aid intended for social purposes is not misused to finance commercial activities.

In a recent report commissioned by the Irish Council on Social Housing, Prof Padraic Kenna of NUIG has pointed out that “the EU Treaties prohibit state aid which would distort competition, but some state aid is permitted to designated SGEIs. These are economic activities which deliver outcomes for the overall public good, that would not be supplied (or would be supplied under different conditions in terms of quality, safety, affordability, equal treatment or universal access) by the market, without public intervention. The explicit designation of an economic activity, with a public interest mission, as an SGEI, by a member state is recognised in EU law.”

The public interest mission for social and affordable housing in Ireland is set out in the 2009 Housing Act and in the Affordable Housing Bill 2020. Affordability is defined in the 2009 Act as representing 35 per cent of net income. It is a pity that the current Bill going through the Oireachtas sets affordability at 25 per cent of the market rent.

In a rental market that is clearly dysfunctional for those on moderate incomes a 25 per cent reduction in rent or, indeed, 35 per cent of net income, may be crippling. Nonetheless, linking affordability to income is critical. – Yours, etc,

ANNE BARRINGTON,

Director and Trustee,

Ó Cualann

Cohousing Alliance,

Glenageary,

Co Dublin.