Unaffordable Housing

The high cost and limited availability of housing have become a threat to our long-term economic prospects and social cohesion…

The high cost and limited availability of housing have become a threat to our long-term economic prospects and social cohesion. Speculative and private investment have fuelled inflationary tendencies in the property market and the single greatest challenge to the adoption and stability of the new national agreement was the rising cost of accommodation. In that light, a suggestion by the Irish Congress of Trade Unions that a small group of developers controlled a large proportion of re-zoned land in the Dublin region was worrying. Few would deny developers a generous profit but cartels must be guarded against.

The Government has a duty to ensure that home-buyers, and those who rent accommodation, are not exploited. The Government has embarked on a number of initiatives in recent years designed to increase the housing stock while slowing the rate of price growth. Measures suggested in the Bacon report formed the basis for much of this action. But the steps taken appear to have had only a temporary effect and house prices have continued to rise strongly. The number of first-time home buyers has remained flat in recent years, even as home completions increased significantly, which points to a high level of speculative investment.

At the same time, rents in the private accommodation sector increased by an estimated 40 per cent over three years and the Minister of State for Housing and Urban Renewal, Mr Molloy, arranged for a review of landlord/tenant rights and security of tenure.

The issue of affordable housing has a particularly destructive effect at the lower end of the market where the level of homelessness is growing. The Simon Community estimates that the number of homeless people has doubled over the past three years to more than 10,000 and it suggests there is considerable underreporting of the scale of the problem by local authorities. At the same time, local authority housing lists have also doubled as young people find themselves no longer able to afford homes of their own. The latest official statistics, compiled last March, showed that 39,176 households were in need of local authority housing, compared with 27,427 in 1996 - an increase of 43 per cent.

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The seven-year National Development Plan, 20002006, envisages an additional 35,500 units being built by local authorities, of which 26,000 homes will be in the eastern and southern regions. The voluntary sector will be encouraged to increase its annual output from 500 homes in 1998 to 4,000 this year, which is a very ambitious target. But the most contentious measure involves a provision under the Planning and Development Bill whereby local authorities may insist that up to 20 per cent of private, residential development land should be used for social or affordable housing. This measure, which has yet to be enacted, has been fiercely resisted by the Irish Home Builders Association on the grounds that it could add up to 24 per cent to the cost of private houses.

Such special pleading and figure-juggling should be ignored by the Government. A similar scheme for social housing has operated successfully in Britain for ten years. The development of mixed housing estates here should be welcomed, in terms of social cohesion. And the Government should speed up its planning and re-zoning procedures in order to rein in an overheating property market.