The government states that its housing plans and policies, including its main flagship policy Rebuilding Ireland, are working and they just need more time. But while the housing crisis results from a number of factors, government policies have been a major factor in causing and failing to address the crisis. The crisis is not intractable and can be solved with a shift to alternative policies but, given the regulatory capture of policy makers, a civil society social movement is required to bring about a major change.
The strongest indication that current policy has failed is the worsening housing crisis that has extended across Irish society. This includes low income families and individuals made homeless; "Generation Rent", where most young people growing up in Ireland will never be able to afford to rent or buy their own home; adult children forced to live at home with parents or couch surfing and students sleeping in their cars and commuting long distances.
The real scale of the crisis is underestimated by policy makers. The level of housing need and distress is over three times the current waiting lists. If you include those homeless, on housing lists, in receipt of Rental Accommodation Scheme (RAS) and Housing Assistance Payment (HAP), home owners in long term arrears and renters with unaffordable housing costs and in buy-to-lets in arrears, it is a total of 270,000 households (likely to be over half a million people). When policies continue to deny and underestimate the real scale of need they are clearly going to be ineffective.
From RTÉ Radio One's Morning Ireland, Emma O'Kelly speaks to a young homeless student "Amanda" who is struggling with life in a hotel room
While the government points to an increase in private house construction as evidence that policies are working, this is not necessarily an indicator of increased housing affordability. Much of the new supply is being sold or rented at unaffordable prices for a majority of those seeking homes. An increased supply of private market house building does not necessarily lead to reduced prices and rents. Therefore, it is not all about supply – it is about the type of supply.
Policy is failing disastrously in the area where the government plays the most important role in addressing the housing crisis - the provision of affordable and social housing. In the first six months of this year, local authorities built just 364 homes across the entire country, while housing associations built just 113. Dublin City Council built just 16 homes. That is a total of just 475 new social homes built in six months in the midst of the housing crisis. In terms of homes for affordable purchase or rent, there were none built (aside from those done by the Ó Cualann Cohousing Cooperative) and there is no scheme for such affordable housing provision.
It was surprising to hear ministers blaming local authorities for their inadequate response to the crisis, given that policy within government over the last two decades has actively discouraged local authorities from building social and affordable housing. The period of austerity saw local authorities have to cut much of their capacity for delivery. Since 2011, this anti-social house building policy was intensified with the shift to sourcing the majority of new social housing from the private rental sector via RAS and, since 2015, HAP.
HAP is very poor value for money as the state is handing over almost €750 million a year to private landlords and gets no asset in return
In Rebuilding Ireland, 85 percent of the total new social housing to be provided until 2021 is to be supplied from the private rental sector (e.g. 83,000 from the Housing Assistance Payment), Part V or leasing from the private sector. Just 15 percent are new builds by local authorities and housing associations. Disappointingly, the Department of Housing has been using PR spin to hide this this reality. For example, it claimed 25,000 social housing "solutions" were provided in 2017. Yet 18,000 of those were via the private rental sector through HAP and less than 400 were actually built by local authorities.
I show in the current edition of Administration that HAP should not be considered a form of social housing as tenants are still in an insecure form of housing. Furthermore, it is very poor value for money as the state is handing over almost €750 million a year to private landlords and gets no asset in return, as the recent Department of Public Expenditure Report also highlights. And it adds a further demand within the rental sector pushing up rents, which worsens the crisis.
Rebuilding Ireland also set out to use public land, to "incentivise" the private housing market and not for a major social and affordable house building programme. This involves various forms of public private partnerships with developers and financiers where the state makes an agreement with a developer to build private market units (that they profit from) on the land in return for providing a limited number (usually 20 percent) of social and affordable units on the site.
From RTÉ Radio One's News At One, housing minister Eoghan Murphy tells Sharon Tobin that "too many" are in insecure accommodation
This has been attractive to government as it gets social housing built without the state spending any money, though the state is transferring a huge valuable asset to the private sector. This is the same approach being used in the new Land Development Agency. This approach, as I detailed in my 2011 book on Public Private Partnerships, is a high risk strategy, that is riven with delays and problems and more often than not fails to deliver, as the collapse of PPPs in Dublin social housing projects in 2008 showed. Furthermore, it leads to the majority of housing being built on public land being unaffordable private market housing.
Another flaw in Rebuilding Ireland is that it accepts that a majority of new households will not be able to own their own home and will rely on the private rental sector. We are thus moving closer to the European housing model with much higher levels of renting and lower levels of home ownership (Ireland’s rate of home ownership has fallen from 80 percent in the 1990s to 67 percent).
However, our private rental sector does not have the tenant protections, lifetime tenancies and affordable rents that are the European norm. As our housing system shifts to a greater reliance on the private rental sector, more households are pushed as a result into housing distress. That is why measures to strengthen tenant protections such as lifetime leases, rent affordability and restricting landlords' ability to evict tenants are required to ensure tenants can make a long term home in the private rental sector.
We can see now that these policies have contributed directly to the crisis with vulture funds hoarding land purchased from NAMA
The housing crisis has also been caused by wider government policy from 2010 to encourage the entry of global investors and vulture funds (via various tax incentives, lobbying and fire sale of assets) into Ireland in order to offload toxic loans from NAMA and the banks. Rising house prices and rents post 2013 were also viewed positively and were promoted as an enticement to investors, while rising prices and rents were also viewed positively for rehabilitating the balance sheets of the banks, a core aim of all policy post 2008. The impact on the housing system was not considered an issue, despite myself and others highlighting the potential problems.
We can see now that these policies have contributed directly to the crisis with vulture funds hoarding land purchased from NAMA. Vulture funds are more likely to repossess houses in mortgage arrears and raise rents on buy to let properties (for example, Ireland's biggest landlord Ires Reit has raised rents substantially). The increase in investors purchasing homes means they are competing with potential home owners. We need to cool off this speculative inflow of investors into our housing system (investors bought up to a fifth of all homes in 2017) and extend the vacant sites tax to derelict property and increase it further to force either sale or development.
The impact of global investors and vulture funds is being seen increasingly in the mortgage arrears crisis, which the government has failed to address. This is causing huge stress and trauma to those in arrears on their homes, but also to tenants who face increasing rents or even evictions when buy-to-let properties in arrears are put in to receivership or repossessed.
From RTÉ Radio One's Drivetime, Michael Lehane and Ruth Coppinger discuss the launch of the government's Rebuilding Ireland plan
The rate of repossessions of principal dwelling houses (homes) in 2017 was double the level in 2012 (increasing from 602 in 2012 to 1,417). There are 35,272 households in arrears over 360 days and 20,000 in front of the courts. The ECB is putting pressure on the banks to dispose of these non-performing loans and, as house prices rise, it becomes more attractive to lenders to repossess homes.
5,900 buy-to-let properties have rent receivers appointed with tenants likely to have been affected and some forced into homelessness, according to Threshold. There are 22,000 buy-to-let properties in arrears and tenants in these properties are very vulnerable. So potentially we have 35,000 home owners and 22,000 tenants – 57,000 households - that could be affected by repossessions and evictions in the coming years.
Government policy is ignoring this potential tsunami of repossessions and appears content to allow the "problem" to be outsourced to the vulture funds. Of note here is that the banks hold 3,600 empty properties that have been repossessed. These could house a significant proportion of homeless families if there was political interest in doing this.
This new supply will not relieve the student accommodation crisis
The recent increase in student accommodation is another example of the way in which this influx of global real estate investors is reshaping our housing system and making it more unaffordable. It also a useful example of the point that an increase in the supply of housing does not lead to an increase in the supply of affordable housing.
Much of the new student accommodation is being built as Purpose Built Student Accommodation by Irish and global property investors, but the rents being charged are unaffordable for the average student. It is targeted at high end and international students, who are generally fee paying and thus attractive for underfunded universities.
This new supply will not relieve the student accommodation crisis. This form of accommodation, and the huge profits being made from it by real estate investors, is also being subsidised and encouraged by government policy that allows the investors pay little tax. Furthermore, they don’t have to provide a Part V social housing obligation and the units are much smaller than normal apartment regulation size.
From RTÉ News, how a shortage of rental properties is impacting on a rural town like Dingle, Co Kerry
Importantly, the new units are exempt from the rent cap and so set a new higher market rent which embeds a permanent unaffordability into Irish student accommodation. This shows that government policy has a strong influence supporting speculative, unaffordable, housing provision. We can see that it is the nature of the supply that really matters - is it affordable or unaffordable supply and who is it for?
Unless there is a radical change in the direction of housing policy, this crisis is going to continue to deepen and worsen. But many solutions do exist. They are outlined by the new broad civil society alliance, the Raise the Roof campaign, and were detailed in the opposition motion which was passed by a majority of TDs in the Dail last week.
The core solution is for Ireland to do what the successful housing systems do in Europe, such as in Austria and Denmark, where social housing is provided for a broad range of incomes and anyone is entitled access social housing and municipalities and not-for-profits are supported by the state to borrow and build significant numbers of housing every year. In these countries, between 25 percent and 40 percent of their total housing stock is non-market, not for profit or social housing. In Ireland, just 10 percent of our housing is social housing.
The government should set out a housing policy that involves using the massive state land bank to provide a new form of social and affordable housing
This is what should be done in Ireland. The government should set out a new housing policy that involves using the massive state land bank to embark on a major provision of a new form of social and affordable housing. Let’s call it public affordable housing. This new public affordable housing would be available to all incomes, including those on social housing waiting lists and middle and higher income workers and families. These would be excellently designed and planned and environmentally sustainable with different housing types ensuring high quality living for a range of households including workers of all incomes, families, students, the elderly, and those with disabilities.
Local authorities should be given the overall responsibility for design, planning and delivery via mechanisms such as cost rental housing, traditional social housing and affordable purchase under the cooperative housing model. The new units could be allocated in each development on the basis of a third of housing for those on waiting lists, a third for cost-rental for those earning above the current social housing limits (approximately €30,000) and a third for affordable purchase for those seeking to buy their home.
The local authorities should be financed and resourced sufficiently to build 20,000 of these public affordable homes per annum, including being allowed to access borrowing on the markets, and a major enhancement in capacity in terms of skilled personnel (architects, engineers etc) to deliver the programme and reform in management approach. They should bring in housing associations and cooperatives (such as Ó Cualann) to co-deliver and manage the programme and contract private builders to build the housing.
From RTÉ Radio One's Drivetime, Jack Horgan Jones, Chief Reporter with the Sunday Business Post, reports on how the state is paying market rates to buy back properties sold to vulture funds at a discount
There are a number of proposals along these lines that have been made at local authority level including the St Michael’s Estate cost rental plan, the Shanganagh Urban Village Cooperative Housing Scheme, the Damastown Social and Affordable scheme, O'Devaney Gardens and others in Cork and elsewhere. These need to be immediately funded, expedited and scaled up across the city and country.
To fund this, Paschal Donohue's budget should allocate an additional €1 billion in capital to the annual housing budget, on top of planned allocations, to enable local authorities to start rolling this out. In the planned housing budget of €1.8bn, almost half of this is current spending, mainly to private landlords via HAP, leaving the capital allocation for new social house building (and purchase) at only €800 million per annum.
This proposed increase would provide a guaranteed supply of secure affordable homes unlike the private rental and HAP delivery which is insecure and expensive. The additional capital would also enable local authorities to make compulsory purchase orders on derelict properties and refurbish them to provide an immediate increase in supply. There is also a requirement for an emergency state-funded expansion of funding to get tradespeople into apprenticeships and ensure we have the various skilled workers required.
Over the last three decades, housing policy in Ireland has consistently failed to address people’s housing needs
There is the fiscal space in the Budget to allocate to allocate this additional capital funding for public house building. By using all the fiscal space available, allocating the rainy day fund to housing (€500million), and reducing its planned taxed cuts.
But over the last three decades, housing policy in Ireland has consistently failed to address people’s housing needs. It has been over reliant on a private market approach and treated housing as financial asset in policy and not primarily as its main function as a home. We need a national conversation about housing, about whether we should treat it as a home or an investment commodity. A referendum could provide that important public sphere for deciding how we as a country want to approach housing.
It is very clear that the present government is ideologically fixated with current policies and suffering from regulatory capture by the real estate and developer investor lobby. It has refused to shift away from failed policies and implement alternative, rights-based, policies that have been proposed.
From RTÉ Radio One's Drivetime, Della Kilroy reports on last week's Raise the Roof protest
Many grassroots activist groups such as the Irish Housing Network, the Housing and Homeless Coalition, trade unions, homelessness NGOs and charities have been working for a number of years to organise and mobilise both those directly affected and the wider public around alternative policies to try to pressure the government and state to act. We have seen the housing protests grow in size in the last year, with 10,000 marching in the Homeless and Housing Coalition protest in April, the occupations of Take Back the Cityand 15,000 attending the recent Raise the Roof Rally.
What has been significant with Take Back the City and Raise the Roof has been the involvement of new groups, particularly young people. These protests and movements have played an important role in articulating alternative policies and building a public concern and consensus. It was very a significant achievement of the movement to get all the left-wing opposition parties to work together and propose a common motion on the housing crisis and then pressure Fianna Fail into supporting that motion last week.
As a result of this campaign a majority of elected representatives in the Irish parliament have voted for the housing crisis to be declared an emergency. This calls for increased funding for local authorities to build social and affordable housing, emergency measures to stop evictions and a referendum to enshrine the right to housing in the constitution.
Housing is central to people’s fundamental sense of well-being
If the housing movement continues to grow in way and with coordinated advocacy of clear policy alternatives in a similar way to the Together for Yes and Right to Water movements, they can play a very influential role in the coming months and the general and local elections in maintaining pressure on the government and Irish state to implement much needed changes. These campaigns empower people to believe that a change is possible. They pressure the system to respond and can reach a point where citizens can also be further engaged in implementing housing solutions, such as housing cooperatives and community supportive for new local housing plans.
Housing is central to people’s fundamental sense of well-being, but this have been undermined and replaced by its treatment under decades of neoliberal housing policies in Ireland (and worldwide) as a financial asset which places its primary value as its use as commodity exchange for investors. The Irish housing system is failing to provide an affordable secure home to hundreds of thousands of households and is marked by deepening inequalities and housing exclusion.
It is time to change direction and ensure everyone has a right to housing, and that that right is met for everyone in this country. The crisis is going to continue to worsen, but we have an opportunity to mark an end point to this social catastrophe and start the change now. This moment of devastation could become the turning point, a moment of hope, the time when we started implementing policies that ensure everyone has an affordable secure home and we never end up here again.