‘The Housing System In Ireland Is Dysfunctional’

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Dr Rory Hearne, from Maynooth University, on RTE’s Six One last night

Yesterday, the Housing Agency released a report entitled the National Statement of Housing Supply and Demand 2014 and Outlook for 2015-2017.

It claimed that over 20,000 new homes per year, over the next three years, will need to be build in order to satisfy  demand.

In response to this Dr Rory Hearne, a lecturer in political and economic geography at Maynooth University, spoke to Sharon Ní Bheoláin to lay out his criticisms of the report and the Irish Government’s approaching to housing in general.

Sharon Ní Bheoláin: “60,000-odd new homes over the next three years. It doesn’t sound overly ambitious but you were saying our entire approach, the entire housing provision model needs to be completely overhauled?”

Rory Hearne: “Yeah, I think if you look at the report, it analyses that there’s going to be 20,000 houses required, additional houses required, from new household formations over the coming years. But  I think what’s missing in the report is a lack of ambition, a lack of appreciation of the wider housing crisis that’s there and it does identify it within the report. Issues like the mortgage crisis, the rental crisis. But, within it, it still focuses and a lot of debate focuses, on the private sector and we’ve seen the private sector developers, you know in the property industry sector coming out and looking for VAT reductions. And I think what it doesn’t analyse enough is the role in which that private model, that speculative, the home ownership, mortgage model failed, led to the cause  of the crisis and a lot of people simply won’t be able to get mortgages or afford their housing. And I think what’s in it, the supply, the 20,000 units, there’s not an explanation enough: what type of units are required in that, are they social housing? Are they rental? Are they home ownership? But there’s an assumption that there’s just private development we need. Rather then looking at, I think in particular, the government could address through additional local authority housing, a lot of this demand…”

Ní Bheoláin: “OK, so this over-reliance on mortgages and private development is contributing to the various crises we hear day after day in terms of affordability, in terms of the squeeze on the rental market, that the Government really needs to start looking at building it’s own units as well.”

Hearne: “Yes, it does. It has to look at alternative housing model. The housing system in Ireland is in crisis, it’s dysfunctional and if we look at, in particular, how the Government is responding to the crisis; the use of NAMA for example, is a good example of where they have just followed the same speculative model. We see NAMA now bringing in new vulture funds to buy up residential property. In fact NAMA has enough land and residential property to develop 25,000 units over the coming three or four years. I would argue that the Government should change NAMA’s remit to actually become a housing delivery agency, focusing on need rather than…”

Ní Bheoláin: “NAMA of course was set up to deliver the best return for the taxpayer and that’s why they’re selling off massive portfolios to these big international investors.”

Hearne: “Yeah and I would argue that is a completely short-termist perspective because, while the taxpayer is getting a certain amount in return, what’s happening is we’re bringing all this property investment into the Irish market which is fuelling rents, fuelling, and the other issue is NAMA is concentrating on building offices – we don’t need more offices, we need housing units.”

Ní Bheoláin: “We need housing units, and we need smaller housing units, according to today’s report.”

Hearne: “We do need smaller housing units and that also comes to another issue of vacant properties. There’s a huge issue  in particular of, and the housing need that’s identified in the report, it’s around Dublin, Cork, Galway, the big cities, there’s a huge issue of vacancy, derelict properties that need to be looked at but I think the bigger issues is our housing model in Ireland. What this report really lacks and analysis, a critical analysis and pointing to alternative solutions that are there, that could move away from…for example, if we look at Ireland. Ireland only has 9% social housing or local authority housing..”

Ní Bheoláin: “How does that compare with Europe?”

Hearne: “England, for example, has 17%, the Netherlands, 33% and this is why we’re seeing 1,000 children in emergency accommodation, we’re seeing 90,000 households on the housing list. Through the last ten years and, in particular, over austerity the budget for social housing has dropped dramatically.”

Ní Bheoláin: “And yet we had this massive housing strategy announced by the minister [for the Environment Alan Kelly] not so long ago. You seem to be very, very critical of our approach to this, the lack of creativity, innovation and joint-up thinking.”

Hearne: “Yeah I think what’s happened is the Government is over focused on the issue of the banks and developers and rather than actually looking at the housing system and what is the purpose of the housing system, it hasn’t put it together. And I would argue that in the hierarchy of the housing system, housing need, housing shelter, people’s requirement for affordable housing should be put first before the property development industry and before international finance and sorting out the banks and, in many ways, the banks have been prioritised over people. And I think as well, what has happened with the Government is that they haven’t really significantly increased invested in purchasing social housing. Within the housing strategy, three quarters of the new social housing is going to be through the new private rented sector. That’s not a sustainable model and I think that we need a radical change that would actually address housing need.”

Watch back in full here

21,000 new homes a year over the next three years needed to meet demand (RTE)

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46 thoughts on “‘The Housing System In Ireland Is Dysfunctional’

  1. Clo

    Just wondering – the assumption seems to be that all these new units need to be built from scratch. But everywhere I go there seem to be tons of vacant properties that presumably could be fixed up for use more cheaply than it would cost to build anew. Why are there no strategies for returning these to use? Even a higher property tax on vacant buildings might encourage owners to think about what they’re doing with them.

    1. Dubloony

      Totally agree with you.
      Between derelict site, ghost estates, old shops in villages that aren’t coming back, there’s tons of back fill that could be done. Especially true in areas where supporting infrastructure is already there.
      We also need to go up rather than out.

      1. Kieran NYC

        Definitely this.

        People also need to give up their ‘must have’ of a three-bedroom semi-d with front and back garden.

        Get over it.

        1. Anne

          Yeah..3 bed semi.. notions about themselves altogether.
          Card board boxes are sufficient in the slums in India shur.

    1. scottser

      he’s not a founder of the AAA, he’s a defector from the old SWP, failed to be elected for PBP and now has a cushy NUI job to spout his socialist credentials from. please get your facts right before you start your hatin.

    2. donal

      Shooting the messenger much?

      He makes one basic point: the housing policy of the government only seems to be directed at the private sector building houses. If they aren’t building houses, and the government knows we need houses, why is the government not building houses? It’s not as though we don’t already own (via NAMA) sh*tloads of zoned and suitable land.

    3. Mr. T.

      So what Miko?

      Fine Gaelers are simply the other side that fence, spouting their unchecked capitalism ideology.

      1. Miko

        But Fine Gael aren’t using “academics” to put forward their policy critiques… NUIM has become another brand for SWP

      2. JT

        @Mr T, I fear your fascination with the blue shirts, stems from a rather unhealthy Smurf fetish.

  2. Al

    I’ve a relative living term in a nursing home, as she has no kids or spouse her South Dublin 4 bed has lied empty for 4 years. When I enquires if we could rent out the house to help pay for the nursing home costs we were told if we did then the house would be liable for CGT. So instead of housing a family it lies empty, such a waste.

    1. scottser

      so pay the tax. the owner still gets an income, the HSE will take their few quid anyway when the house is sold and you or some other tenant gets a house to live in. everyone’s a winner.

    2. Mayor Quimby

      I take it as a liberal leftie Broadsheet reader you’d agree with the principle of eliminating the CGT exemption for PPRs?

      Nah, thought not

      Alternatively she could just sell the gaff…

    3. Mayor Quimby

      It would only be liable for CGT for the time it was rented out. Pro rata’d per year of ownership..

      Get some proper tax advice

    4. Clo

      Again, tax would be one answer. Make it more uneconomic to have the house empty. At the moment such a house is exempt even from property tax as the owner is in a nursing home. Also houses worth under E100,000 pay only a pittance in property tax, so no incentive to rent those that are empty to recoup the cost (someone I know has two such properties, completely empty, new, very little upkeep, in part of a southern county where it’s difficult for people to find rental property -doesn’t rent them because of the hassle, just wants assets: should be taxed to concentrate the mind!)

      1. Al

        she cant sell it as he has dementia and no direct relatives, children, husband, sisters or brothers who can sell it either.
        As her fair deal rep I have limited powers as to what I can do.

        The idea of renting it out meant that the state would have to pay less through fair deal, but by having to pay CGT the state is getting extra tax and paying less through fair deal, having their cake and eating it

    1. scottser

      i thought it was just me. either my comments just don’t appear at all, or i get messages to ‘slow down’. imagine, asking me to ‘slow down’ – if i went any fukn slower i’d be backwards.

      1. Dόn Pídgéόní

        Recent comments only seem to show up for me after about 10-20 minutes. How can I have passive-aggressive internet fights with people under these conditions?!!

          1. Kieran NYC

            Has anyone found Don’s earrings?!

            Broadsheet, I know you don’t normally do this, but…

      2. Anne

        Ah jazus, why didn’t someone say this earlier… I thought I was banned again.. Or maybe I am and ye are too. Haw haw!

  3. Bort

    Why do I always feel when I read demand for housing it sounds like a demand for more free house for people on the scratcher. I rent, i work, I can’t afford a house, I’m not demanding one. If they build 200 new social/affordable housing units what have I got to gain? Zilch!

    1. Dόn Pídgéόní

      You know that “affordable” doesn’t actually mean affordable – its still linked to market rates, so if property is expensive, the affordable properties will be too. There should be social housing, much much more of it and it shouldn’t just be for people on low income. It should be an alternative to buying from developers.

  4. Bort

    More social free gaffs for those on the scratcher, 20% down unaffordable mortgages and sky high rents for the working not so rich.

    1. scottser

      you can apply for social housing support if your income is below 35k per year net as a single person.

  5. Lilly

    Why doesn’t the Government appropriate all those empty apartment blocks Nama are sitting on, presumably waiting for some US vulture fund to swoop in and buy heavily discounted, before renting them out at exorbitant rents to our citizens? Come on FG, it’s a no-brainer.

    1. Miko

      What empty apartment blocks? They are all sold out in Dublin. You mean apartment blocks in Roscommon where there are no jobs?

      1. Lilly

        No they’re not, get your facts right. Elmfield in D18 is vacant for starters, and a nice development it is too.

  6. pedeyw

    Yep. my Mum lives in Leitrim. There’s an apartment block in the small town near her. Who the hell wants an apartment in a small rural town in Leitrim?

  7. Jake38

    “,,,,,,,,,this property investment into the Irish market which is fuelling rents………………..” Clearly this clown has no understanding of the law of supply and demand.

    1. Lilly

      Maybe he could have added the word ‘artificially’ as in artificially fuelling rents, but his overall position is valid. It is a dysfunctional way to live, spending the lion’s share of one’s income on accommodation.

      1. Jake38

        That makes no sense either. Investing and increasing supply reduces prices, such as rents. It does’t “fuel” them, “artificially” or otherwise.

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