Opinion: Ireland needs a clear national housing plan

Government intervention in the housing market on a large scale is required

 

Whatever shape our new government takes, most if not all our newly elected politicians agree that housing is a critical issue that must be tackled as an emergency. Many also agree on the main proposals for change. This provides an opportunity to agree a national housing plan – a common policy platform a majority of TDs can support so action is taken as soon as possible.

There are a great many similarities between the party manifestos on housing, and implicit in them is that effective housing policy needs long-term thinking. However, in the past, most governments have been extremely reluctant to commit to policies that won’t deliver until after they’ve gone (Social Housing Strategy 2020, a six-year plan, is an exception).

The main goal of Irish housing policy can be simply summarised as “decent, affordable housing for all”. A national housing plan would comprise broad principles and goals that would chart a path towards that overall ambition.

Before setting out what the main elements of such a plan might look like, it’s important to understand four fundamental rules of housing policy:

1. Housing is expensive. Even after falling by a third since the peak, the average new house or apartment costs about 6.5 times the average annual income. This underpins nearly all housing policy. 2. Because housing is expensive, many people can’t afford to buy. The National Economic and Social Council (NESC) estimates that between a quarter and a third of all households cannot afford to purchase their own home or pay a market rent in private rented housing.

3. It follows from this that if everyone is to have access to a decent affordable home, affordable rental housing needs to be widely available. To achieve this, government intervention in the housing market on a large scale is required. This includes funding for social housing and welfare benefits such as rent supplement and housing assistance payment.

4. Housing cannot be whistled up out of thin air. Housing supply reacts slowly to changes in demand. Starting from a green field site, it takes about four years to complete a housing estate.

These housing policy rules are pretty well immutable. If they are used as the foundation of a housing policy platform, it is likely to be a sustainable one. A national housing plan should include a number of basic principles and broad goals:

  • The state should not incentivise owner-occupation or promote it over other housing tenures. Policies such as incentives for first-time buyers or retention of mortgage tax-relief will further stimulate demand and only push prices upwards. It is absolutely essential that we avoid a return to steeply rising house prices. The Central Bank intervention which limits lending is a critical element in this and must be retained.
  • Most people should not expect to buy their own home until they are in their 30s or 40s. This is not a housing policy failure – it’s the norm in many countries.
  • It follows from this that rented housing must be a viable alternative to owner-occupation. That means increased security of tenure (people with children at school need to know they can stay where they are for at least 10 years); rent certainty (rent increases should be limited to the Consumer Price Index or agreed by a national partnership body as is done in some other countries); and better enforcement of improved minimum standards. Responsible landlords have nothing to fear from this; indeed professional landlords would welcome the stability that would follow.
  •  There is an urgent need to increase housing supply. We need to build about 25,000 new homes a year, for purchase and rent, which is roughly twice current output. Reducing standards will not significantly increase output and should be resisted. The planning process could be speeded up. Short-term incentives to developers should be considered.
  • The last government’s social housing strategy, which runs from 2015-2020, should continue to be supported and the overall targets of 35,000 new dwellings and 75,000 households in receipt of housing assistance payment should also be retained. In addition, a national social housing agency should be established which would build housing on behalf of local authorities and also administer funding for not-for-profit housing associations.
  • Social housing currently accounts for about 10 per cent of all housing in Ireland. This should be increased to 20 per cent over the next 20 years.
  • There is such a thing as a free lunch. When social housing has been paid for, it can be rented out at affordable rents with no government subsidy. But only if the houses are not sold off to tenants at a discount in the meantime, as has happened to two-thirds of all social housing ever built by local authorities.
  • The current very high levels of homelessness are mainly the result of a shortage of rented housing. In the circumstances of this shortage, those with the least power – people on low incomes – lose out. In the medium term, the solution is of course more housing. But in the meantime, a package of emergency measures that would enable people on low incomes to compete on equal terms with others for private rented housing is essential both to prevent future homelessness happening, and to provide housing options for people currently in emergency accommodation. Such a package would include increasing rent supplement limits; limiting private rent increases; and providing significant incentives to landlords who rent to people in receipt of rent supplement or housing assistance payment.

The potential for a consensus on housing exists, and a national housing plan is perfectly achievable. One of the advantages of an agreement of this kind is that it removes auction politics from the process of policymaking, and allows for the inclusion of elements that make good housing policy but may not be popular with some sections of the electorate.

Demonstrating a genuine shared commitment to tackling a national crisis in this way might also have the benefit of improving politicians’ standing, which is currently extremely low.

Simon Brooke is part-time assistant

professor at the school of social work and social policy at Trinity College Dublin, and head of policy at Clúid Housing

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.