From top: the Committee on Housing and Homelessness launching the Report of the Committee on Housing and Homelessness in Leinster House today; Dr Rory Hearne
Further to Nama Wine Lake’s analysis last night.
While the focus is on an ‘off-balance’ sheet mechanism to fund social housing we could be facing a situation where there are over 3,000 homeless by this time next year.
Dr Rory Hearne writes:
There is a lot of criticism of the political system in Ireland, and particularly the elected TDs and how the Dáil goes about its business, for being ineffective and a waste of time.
The newly formed Committee on Housing and Homelessness has shown what politicians can achieve. The committee was only set up two months ago, in April, “to review the implications of the problems of housing and homelessness, and to make recommendations in that regard”.
And this is vital and urgent work. The Dublin Regional Homeless Executive provides regular updates of the homeless figures in Dublin and the most recent ones from April show this crisis is just getting worse.
Their infographic below reveals that in April, there were 888 families with 1,786 children in homeless accommodation in Dublin. The number of children is almost double what it was just a year earlier.
At this rate of increase in homelessness we could be facing a situation where there are over 3,000 homeless by this time next year. A shocking prospect.
The Committee on Housing and Homelessness has had presentations over the last two months from a broad range of organisations, groups and individuals involved in housing.
These included the housing charities (Peter McVerry Trust, Focus Ireland, Simon Communities of Ireland, Threshold), also representatives of excluded groups (Irish Refugee Council, Pavee Point), the Irish Mortgage Holders Organisation, the Residents of Tyrellstown affected by evictions from the vulture funds.
The policy decision makers and funders also presented including the National Treasury Management Agency (NTMA), the Department of Finance, NAMA, the Housing Finance Agency, the Minister for Housing and the Minister for Finance, and the Irish Property Owners Association, the Irish League of Credit Unions and the Construction Industry Federation.
Interesting individual experts such as the Master of the High Court Edmund Honohan, Professor PJ Drudy, and the Mercy Law Resource Centre also presented.
There are groups who are very active at a grassroots level – such as Housing Action Now and the Irish Housing Network – who do not appear to have presented to the committee which is unfortunate given their ‘on-the-ground’ experience of supporting those most affected by the crisis and their innovative ideas on potential solutions.
The quality of debate at the committee meetings was very high and there was a substantial amount of really important information provided on the facts about the housing crisis, the different groups affected and potential solutions to the crisis.
All the submissions and the discussions at the committee are very interesting and you can read them all on the Oireachtas website here.
For example, during its hearing on May 31, the NTMA and the Department of Finance made a presentation on the issue of our ability to borrow (while staying within the EU fiscal rules) in order fund the provision of much-needed social housing.
The NTMA (the National Treasury Management Agency) manages our National Debt and various funds such as the Infrastructure Investment Ireland Fund (which is what used to be the National Pension Reserve Fund) and borrows on behalf of the Government.
The NTMA explained that Ireland’s debt levels (the debt to GDP ratio) have fallen from 120% to 94% but our absolute level of debt, at over €200 billion, is four times what it was in 2007.
And the annual interest that we must pay on this debt is close to €7 billion (which was just €2 billion in 2007).
European fiscal rules require Ireland to reduce the debt-to-GDP ratio by roughly 5% per annum.
But due to our economic growth rates we are achieving this and therefore, there is ‘fiscal space under the debt-reduction rule’ that could allow us borrow more while staying within the EU rules.
But the debt is only one of three rules.
The other two relate to government expenditure benchmark and the ‘balanced budget’ rule. This means that if we borrow to spend or invest directly by the government (or local authority which is considered a state agency), for example in social housing, it affects our public spending limits.
But if we borrow and invest it through a non-government body on a commercial basis it does not affect public spending limits as it is considered by EUROSTAT (the European agency that defines if we are breaking the rules or not) to be ‘off-balance-sheet’ spending.
This is why pretty much the sole focus of the Department of Housing, Finance and Government has been trying to find ‘off-balance’ sheet mechanisms that allow investment not affect the rules.
But there is a very obvious issue here that requires clarification. If you increase spending on an area, like social housing, and fund this through an equivalent increase in taxation, then surely nothing changes in terms of the budget deficit?
Now if the planned abolition of the USC was going to cost us approximately €4bn then surely that could be paused which would then leaves a number of billions that could be invested in social housing provision and not require borrowing or lead to a breaching of EU rules?
The committee will present its final report today.
It will be well worth a read to see what’s in it.
Dr Rory Hearne is a policy analyst, academc, social justice campaigner. He writes here in a personal capacity. Follow Rory on Twitter: @roryhearne
Yesterday Nama Winer Lake Writes
keeping the landlords recovery going, eh?
And thank god.
your god of profit before people
profit before people?
Buy a house, pay a mortgage (or rent), then watch a large slice of your income go in taxation to pay for someone else’s house, someone who can’t be bothered keeping the place clean, doing minor repairs.
It’s not my gaff, let the corpo fix it.
Time to put manners on the so called working class. Take some responsibility for your life.
Exactly, I’m sick of people moaning about the cost of rent. Buy a house if you don’t want to rent.
your hared of the unwaged is noted
Landlords provide housing for those who can’t afford their own. Give it another 5 years and there will be no landlords , no rental stock and a worse crisis than there is now.
Face it, government has no intentions of building social housing, therefore landlords are necessary.
hopefully, rents will remain high for a long time to come.
Landlords provide housing for those who aren’t yet eligible for a mortgage, for a profit. Affordability has nothing to do with it. They’re not a public service.
So the tenant is paying someone else’s mortgage.
Landlords provide nothing. They buy up more housing than they need, thus making it unaffordable to others. They acquire debt in order to do so. The cost of the housing, plus the cost of the debt, plus an additional surplus, is paid by the tenant. The landlord enjoys the equity of housing he didn’t create and doesn’t pay for. This is not an efficient or sustainable system; and to pretend it’s the only possible system is a failure of imagination.
Could have put it better. Well said!
“They buy up more housing than they need, thus making it unaffordable to others.”
Absolutely. And they want the privilege of tax breaks on the income for doing so.. go away out of it.
Couldn’t*
Moronic thinking which assumes that if one party didn’t buy something the price would go to zero.
There will always be prime costs. This place is where intelligent thinking goes to die.
That’s a bit simplistic – what about when a person moves to a new city and wants to try it out for a year or so? They’re hardly going to buy a house straight away; landlords provide a service. The housing crisis in Dublin is down to an insufficient number of house being built; it isn’t due to the existence of landlords.
“The housing crisis in Dublin is down to an insufficient number of house being built; it isn’t due to the existence of landlords.”
Landlords charging exorbitant rents for sh*tholes are exploiting the housing crisis though and contributing to it.
Landlords are currently evicting paying tenants, including families with children, in order to rack up the rents. This isn’t a service. It’s pure greed.
Landlords wouldn’t be able to charge exorbitant rates for sh*tholes if the supply of housing would increase sufficiently, and there wouldn’t be as many families evicted if there were long-term leases. Neither of these issues are the responsibility of the landlords; it is the fault of legislators.
The legislators and landlords are the same people in this country.
Ok then
I agree with you there Rob.. but why hasn’t that been done? Tenants haven’t been protected in any significant way, and there are continuous excuses as to why social housing isn’t being built -off balance sheet nonsense.
Thank Pig Kelly for the bin charges aswell
Thanks Rory this is a great informative article.
There are emply houses all over the country. There are small towns struggling becase of a lack of population.
We need to open up housing the homeless on a national basis, not just local authoriteis.
It won’t be everyone’s cup of tea but surely if you are stuck in a cramped hotel room with small kids, a small town, with open spce, a local school that is kept open, real neighbours etc would be a better option for some?
Half homeless people are single, so in theory there’s no other family consideratons like moving schools etc stopping it.
+1
There are often stories on this site of families ‘homeless’ because rent allowance won’t get them an apartment in Dublin 2, 4,6, or 8. People renting privately or buying property often have to make compromises on location; I’m not sure why people on rent allowance should be treated any differently.
The ones in hotels long term rather than houses!
With NAMA brimming with properties.
The cost is huge.
I cannot understand.
ask Dan, he believes that those people deserve to live there
That’s not what I said.
What’s the alternative in your opinion dav? Huge council estates like Ballymun, Darndale, Moyross?
We live in a capitalist society. If you don’t like it feck off somewhere eels or change it.
I believe in rewarding people for their hard work, not paying people to loll around all day moaning because their accommodation needs to be cleaned.
Sad faces pointing at mouldy walls caused by lack of cleaning and drying clothes on the radiators. Try a bit of bleach and opening a window every now and then.
Take responsibility for your own life. Get your missing partner to cough up for your rent, not me.
Also if our idiot local councillors stopped appeasing the housed population by cutting property taxes, it would help to raise extra revenue.
SF run Dublin city council have forfit millions over the past few years.
+1
+2
But if we borrow and invest it through a non-government body on a commercial basis it does not affect public spending limits as it is considered by EUROSTAT (the European agency that defines if we are breaking the rules or not) to be ‘off-balance-sheet’ spending.
I don’t understand this.
The money is still being borrowed…
“invest it through a non-government body on a commercial basis ”
This is just privatisation of government functions, for private companies to make profit.
Can someone explain the ideology of this off balance sheet malarky to me please?
The money is still being borrowed.. whether it be invested directly by the government, or invested through a non-government body on a commercial basis.
If invested directly by the government, it means less public spending, but not if invested through a non-government body/for profit? Cos it’s just the rules?
Does that have the affect of encouraging the privatisation of government functions?
It appears to be an well-implemented ideological policy – keep all the plebs in-line with the heavy sword of homelessness hanging precariously over everyone – work 50 hours a week, 15-20 hours per week commuting, childcare-mortgage and house mortgage to pay, pi$$-poor health infrastructure, pi$$-poor building standards, criminality in NAMA etc….if you make any type of a fuss – you’re fkt. – Welcome to the Irish Precariate, schlubs.
there are different types of homelessness:
Those who work hard but can’t afford a home need the most help.
Those who couldn’t be a r s e d need to be left to fend for themselves.
Those who need support (mental health issues, addiction issues) need to get support, but if help is rejected they need to be left to fend for themselves.
There are different kinds of homeowning:
Those who are content with enough space to live in.
Those who buy houses as assets. In order to exploit those who cannot afford homes, they need for homelessness to a serious and realistic threat. As such they support an economic system based on the unnatural fiction that the right to live somewhere must be “earned”.
They second kind should be given support to learn the human values of contentedness, sharing and empathy, but if help is rejected they need to be left to fend for themselves.
How, in your socialist utopia, do you get to decide who gets to live where? There will always be certain places more popular than other places; under your proposed system, how will you allocate the houses in the popular areas?
I saying people who cling to more than they need should not be held up for admiration. They should be despised for their greed.
And I’m saying sharing is a normal activity, essential for society. You don’t have to act like it’s an unwanted burden imposed on us by the feckless, uncaring poor.
So no, you don’t have an alternative system – righto.
During the Irish famine there was enough corn in this country to feed the starving. The government hesitated to distribute it because this would lower the price of corn on the free market and hurt the wealthy landowners. This wasn’t a failure of the system, it was a failure of humanity.
During this housing crisis we have the means to provide stable homes for everyone. The government refuses to take action because this would lower the free market rent prices and hurt the wealthy. Same crap, different century.
After the second world war the British government built tens of thousands of temporary houses for people who had been bombed out. They were broke but they did it because they decided they ought to. It didn’t lead to communism or the end of free trade.
to reside in the utopia of civil servant land, you must be first be checked to confirm you do not have a humanatarian bone in your body, 99% devoid of emotion, and maintain a level of apathy which is unattainable by most, possessing the ability to drive those you are tasked with severing into an apathetic shock with
” computer says no ” is a bonus, to suicide a guaranteed residence
The rental model in Ireland is broken. We don’t need to build thousands of LA houses, other countries don’t and it has proven to be a disaster here in the past.
What we do need is a proper system of long term rentals where landlords and tenants can both be happy with the arrangement.
I have a rental property, I charge way under the going rate. In return the tenant doesn’t ring me when the light bulbs are broken or the extract fan filter needs to be replaced. When the vacuum cleaner broke they bought a new one.
I don’t cover all my expenses with the rent but any money I have to put towards the property reduces the mortgage so that’s ok with me.
” it has proven to be a disaster here in the past.”
Local authority housing has not proven to be a disaster in the past by any means.
Here –
http://www.irishtimes.com/opinion/fintan-o-toole-opposition-to-social-housing-is-matter-of-ideology-not-economics-1.2397695
What you state ‘what we need’ benefits you and your ilk funnily enough..