Local authorities have to get back into providing public housing
National housing policies may not be the best way to address what is a regional problem
Property taxes collected in Dublin today should be put to use specifically in Dublin to resolve the city’s housing crisis. Photograph: Getty Images
Delivering Taoiseach Leo Varadkar’s promises that “everyone should have a home” and that “every working person should be able to aspire to own their own one” requires bold actions and lots of money. The latter is in short supply, and the Government has not gone far enough on the former.
Working to ensure that every citizen should have a home is the least any government should aim for, particularly when there are more than 8,000 homeless people, including 3,000 children, and regardless of whether these figures are “low” by international standards, as our tone-deaf Taoiseach put it.
There is nothing normal about this level of homelessness, particularly in a country which has the EU’s fastest growing economy.
Holding out hopes that every working citizen could be able to become a home-owner is a more challenging promise, particularly in a property market with dwindling supply and soaring demand.
The most recent tea-leaf reading on the state of the market shows just how far out of reach home ownership will continue to be for people on low and middle incomes. The prediction from the State-funded think tank, the Economic and Social Research Institute, of house prices rising by 20 per cent over the next three years will make home ownership more of a fantasy than a hope for many.
And what’s worse is that the surging cost of renting will, where home-ownership is unaffordable, raise doubts about whether people can even be guaranteed the chance of finding a home. The latest report from property website Daft illustrates just how dysfunctional the market is: at the start of this month there were fewer than 3,400 properties available to rent nationwide, including just 1,300 in Dublin.
These figures make sense of others: more than 10 landlords in Dublin leasing properties on the online short-term rental service AirBnB are earning more than €100,000 a year from their properties. As Fiona Reddan’s report in this newspaper on Tuesday showed, the biggest earning property was a six-bed apartment in the south city centre that brought in €163,495 a year. With such spoils in a lucrative landlord’s market, why would you rent out your property long term?
Where will the homes come from?
For a Government that seems to struggle even to measure accurately the amount of houses being built and includes in its public housing targets “social housing supports” rather than actual homes, Varadkar should look back – long before a few clicks could find you a roof for the night – for some ideas.
The 1950s was the last decade when the number of social housing units built exceeded the number of new private housing – 52,740 in public housing as against 49,188 private homes, official statistics show – and there was even a Fine Gael taoiseach in charge for some of those years.
By the end of that decade waiting lists for housing were almost cleared, and the construction of public housing had slowed markedly as the supply was met. All this was achieved when the State was almost bankrupt.
There are parallels between then and now. Then there was a shortage of proper accommodation in urban areas, building costs had soared and city-dwelling middle-income householders were struggling to become owner-occupiers in sufficiently large numbers and continuing to rent privately, sometimes in poor conditions. There was also a shortage of development finance to meet the country’s housing needs. Sounds familiar?
A government white paper produced by the minister for local government in 1948 estimated that an additional 100,000 dwellings should be constructed over the following decade. The housing demands were largely met by a combination of factors. As UCD social policy professor Michelle Norris, the current chairwoman of the Housing Finance Agency, points out in her 2016 book Property, Family and the Irish Welfare State, people found homes largely due to a marked increase in public spending on housing, particularly on home-ownership subsidies and government-provided mortgages.
Home-ownership rates increased from 52 per cent of households in 1946 to 61 per cent in 1971. The rate fell last year to its lowest rate since that period, according to last year’s census.
A 1964 housing white paper found that 85 per cent of capital spending on housing between 1948 and 1964 came from central and local government at a time of economic depression in Ireland, and when the labour force shrank by 13 per cent.
Contemporary Ireland is, of course, a very different country, and our more recent history warns us against government supports for lending and construction. Politicians in the 1950s were also dealing with a shrinking national population that had roughly the same number of people that now live in Leinster.
Yet the empowerment of local government during that period should be instructive; it meant a more focused approach by local authorities to address problems on their own doorsteps, raising money on their own municipal bonds, even if it did lead to constant fighting with government departments.
Where high rates gave local authorities greater financial wriggle room in the 1950s, property taxes collected today in Dublin should be put to use specifically in Dublin to resolve the city’s housing crisis.
The current crisis is largely concentrated in the greater Dublin area, Cork and Galway, which means their local authorities have to get back into the business of providing public housing, like in the 1950s.
With limited Government money available – either centrally or locally – public-private partnerships seem the best and quickest modern means to provide affordable housing to meet the shortfall of up to 50,000 units a year without lumping further debt on the State’s account.
Involving private players fills the public sector gap in experience on big-ticket projects. The 2008 collapse of a council deal with builder Bernard McNamara to develop five sites around Dublin seems not to have discouraged local authorities to return to the drawing board, with new PPP developments recently unveiled in the city.
This is a good start, but more targeted focus and investments are required at a local level. National housing policies may not always be the best way to address what is essentially a regional problem.