Ireland’s housing crisis will not be solved by the private sector
Ireland cannot trust private property developers to once again take on the role of providing housing stock to the country. The last time it was left to the private sector to house the Irish, they failed catastrophically, taking the country’s economy down in flames with them. It is the Irish citizens who are paying for this crisis through austerity and new taxes who will lose out again if the provision of housing is left to the private sector.
With the average salary Ireland now at €35,000, most workers are priced out of the prospect of ever owning their own private home at current prices. The shortage of affordable housing has led to an increase in demand on the rental sector, with the now all-too-obvious consequences of this apparent: expensive rents, unaffordable to many, for property which is in many cases maintained to a very low standard. When the housing crisis became one that could no longer be ignored, Minister for Housing Simon Coveney outlined his proposals to deal with the housing crisis on the 19 July. As many suspected, we cannot count on the existing government to bring forward plans that help the majority of citizens, and the plan involves helping developers instead than helping potential homeowners or tenants. The government is going to open up public land for private developers to build on, and subsidise private developments by spending €200m on infrastructure to ‘open up’ sites. Effectively the developers that played a role in sinking the economy the last time round have been offered a few treats by the government in an effort to get them building again.
You do not house a population by subsidising for-profit private developers. Private housing, built and sold for profit, will not be available to the market at prices affordable to the majority of workers in Ireland. If the government is going to be funding the infrastructure that enables housing to be built, then clearly it makes sense for them to build the housing too using public funding.
It has for a long time been fashionable to some to stigmatise those who live in council housing; a divisive attitude which makes little sense. Elected government has the responsibility to ensure citizens are homed. Sadly, we heard the repeated snobbery in the wake of Coveney’s plan last month on the issue of mixed-tenure housing — the idea that someone who buys a private house with a mortgage would not want to live next door to someone in the same house who is there as a social housing tenant. This attitude and stigma needs quickly to become a thing of the past. Given current trajectories of wages and house prices, it will soon be the majority of the adult population who are not in a position to afford a private family house in or near Irish cities.
What is interesting to note is that in the government’s “Rebuilding Ireland” literature, Coveney’s team themselves acknowledge that the private market cannot be trusted to take responsibility for delivering housing: “left to its own devices, the market would not ensure all households are housed appropriately or at all”. After admitting how unfit for purpose the private sector housing market is, the report goes on to do little beyond engaging the market in future housing needs.
What Ireland needs is a public house-building programme: one where a profit motive is not being put before people’s need for a house. Only this way can housing be provided in a sustainable way for the next generation of Irish families. This would not be anything new: in times of crisis, countries have often engaged upon large public housing programmes. The British Labour party has for example announced that if elected they would build 1,000,000 houses in five years.
Fine Gael’s 2016 campaign ran with the slogan “Let’s keep the recovery going”. It’s unlikely that most families are yet experiencing any kind of ‘recovery’ — but if there is to be any sort of sustainable recovery for the majority of Irish citizens, this will need to start with affordable housing. Even IBEC have even called upon the government to invest in public housing, because of concerns that businesses may in the future no longer see Ireland as a country where their staff will be able to afford to live. Aside from the needs of business, we should consider that in the absence of a public housing programme, many families will be unable to live with financial security. Left at the mercy of the private market, first-time buyers will again risk ending up in negative equity or facing the threat of repossession.
To put it more bluntly: the well-being of Ireland’s next generation depends on there being a well-funded, sustainable, public housing programme. Private housing developers have had their party — they have more than proved themselves to not be interested in the health of Irish society. Any set of politicians who do not take this seriously, or who have not learnt from the past, should not deserve to govern Ireland.