Dr Hearne was interviewed on Today with Seán O’Rourke earlier today.
Rory Hearne: “My analysis is that the Government’s policy and strategy, up to this point, has been inadequate in terms of social housing or even new forms, and what I propose is, and support others, like the Nevin Institute, towards the idea of an affordable rental housing company. That the Government is not doing enough to directly supply itself and what it has done is it’s over-focussed on incentivising private sector.
And by doing this incentivisation, whether that’s reduction in apartment sizes or it’s the Help To Buy scheme to try and introduce demand, that it has in actual fact inflated rents and inflated house prices and contributed to the crisis.
You may recall how yesterday new figures from the Central Statistics Office (CSO) showed the national average house price rising by almost 11% in the year to February.
Some economists have blamed the Government’s Help To Buy scheme for fuelling the sharp rise in prices.
Further to this…
Architect Maoilíosa Reynolds wrote an article for the Sunday Business Post in which he raised serious concerns about the Department of Housing’s seemingly disingenuous methodology when it comes to calculating house building figures.
He explained that official house completion figures are based on connections to the ESB network. To this end, the department says 14,932 new homes were “delivered” in 2016.
But, he said:
“There are significant problems with this. When a dwelling has been vacant for two years or more, the ESB network requires the owner to apply for a new connection (MPRN). This is a safety measure designed to make sure vacant units are safe and wired correctly. Using this method, existing completed Nama vacant units, part-completed ‘ghost estate’ units and local authority refurbished voids, when re-connected to the grid, are all classified as new completions. In the five-year census period, almost 20,000 existing houses have been re-connected and therefore officially reclassified as new builds.”
Mr Reynolds also raised concerns about how commencement figures are calculated – and crucially inflated – for large housing estates.
“In larger, estate-type projects, the established practice is to lodge one commencement notice for an entire scheme which may not be completed for several years. A 400-unit estate which begins building today may only deliver 50 units in 2017 – but all 400 will be counted as commenced this year. As a result, estate commencement numbers are inflated.”
As for residential planning permissions, he wrote:
“Up to 40 per cent of residential permissions do not get built for various reasons – lack of finance, ‘value-add’ exercises or extensions to existing permissions.”
Bizarrely, Mr Reynolds explains that one metric can be trusted and that’s the Department of Housing’s own detailed database called the Building Control Management System (BCMS).
“A presentation by Department of Housing representatives to Engineers Ireland last month disclosed BCMS completion figures – not published on the Department’s website – for 2016. According to the presentation, there were just 3,505 certificates of compliance issued for all building types (not just residential).
In some instances, a single certificate of compliance covers more than one unit, so it is thought that the true number of homes represented by completion certificates could be as much as 30 per cent higher. But the reality is we don’t know.
Assuming the 30 per cent figure is correct, this means that certificates of compliance may represent 4,556 units delivered, a figure that includes 243 local authority and 400 units for conversions of existing non-residential to residential (Department’s own estimate). Add in average figures for one-off housing commencements at 2,972, a maximum delivery number of 7,528 is reached, or just 50.4 per cent of the official figure of 14,932.
This is best-case scenario. The number is likely lower, as BCMS tracks all building types, but does not disaggregate residential from other activity.
This means that in 2016, new-build output was half the official figures and a minimum of 7,404 existing vacant, refurbished voids and ‘ghost estate’ units reconnected to the grid were double-counted as new completions.”
Keelin Shanley was speaking to the Minister for Housing Simon Coveney on RTÉ’s News At One this afternoon when she raised the matter of Ireland’s official housing figures.
Keelin Shanley: “If you want to solve a problem, the very first thing you have to do is quantify that problem and know exactly what you’re dealing with. There has been discrepancy over figures that are coming out. We see 4,400 new home transactions over the last 12 months, comparing to a figure of 15,000 coming from the department. Can you explain the difference here? Because a number of experts have tried.”
Simon Coveney: “No, look, we measure new house completions that same way now as we have done every year since the 1970s. It’s based on ESB connections so , in other words, when somebody comes into a house, they put in place an ESB connection to actually insure that that house has been lived in, that is what determines new completions. Last year, it was over 15,000. The year before just over 12,000. This year the anticipated figure will be about 19,000. And so…”
Shanley: “So, ESB connections, rather than new homes put in place. These can be homes being brought back in or…”
Coveney: “I can only, like, you know, I mean, if we, you know, if figures were showing a different result, you’d ask me a different question. All I can do is use the same methodology that we’ve always used. To measure new completions, so that we can see improving trends. And we are seeing a dramatic increase in house building activity in Ireland, mainly around the cities. It’s only starting in other…if you look at Co Galway, one of the biggest counties in the country, only one housing estate built in the last six years. If you look at a county like Tipperary, not a single housing estate built in the last five or six years. And we’re about to have 200 houses built outside Clonmel. So we are seeing increases. It is ramping up quickly but it will take time for that to turn into new homes, good quality communities and housing estates and significant [inaudible] needed in city centres.”
Talk over each other
Coveney: “Planning applications, for example in Dublin, for apartment complexes is up more than 200%. So the willingness is there. But look, we can’t…”
Shanley: “There is a lag..”
Coveney: “…ignore the fact that, but over the last six or seven years, we had a broken economy and at the heart of that was a broken construction sector we had a banking sector that didn’t function, many, many developers and builders went out of business. 200,000 people lost jobs on building sites. In the last 12 months there’s an extra 13,000 people working on building sites so we are rebuilding literally from a very, very low base. It is going to take some time to deliver a response on that, but it’s happening.”
Shanley: “Minister, nobody disputes that, we’ve seen it. And that’s fair enough. I think everybody accepts that there is a lag. But even so, over the last 12 months, that figure of 4,400 new home transactions or 15,000 completions from the department, it’s still a very long way off from what’s actually needed and that’s with time. You know, they’re the most recent figures….”
From top: The Nevin Institute paper on the housing emergency; Dr Michael Byrne
Further to calls yesterday by The Nevin Economic Research Institute (NERI) for the creation of a semi-State company to become the main supplier of rental housing
Dr Michael Byrne writes:
Sometimes as a tenant it can feel like the problems are coming from all angles. Rents have increased 60% since 2010 while wages have been more or less stagnant. Evictions – or ‘terminations of tenancy’ – are very common.
Landlords can boot tenants out if they decide to sell or if they would like the property for family use. But many landlords are also forced to sell by their bank, due to arrears, or have receivers firms appointed to their properties who invariably put them straight on the market.
In both cases tenants lose their home to facilitate the sale of the property.
Meanwhile when you do lose your rented home it is extremely difficult to find a new one. And finally, bad property management and low standards are the norm across the sector.
These are all issues which can and should be tackled. But in a path-breaking research paper published yesterday, the Nevin Institute have made a startling point; if there are so many problems in the system maybe it’s because the system itself is broken.
They argue that nothing short of a revolution in rental accommodation is required. T
Their proposal is radical, but simple. It works like this. The government should establish a new semi-state company (which the Nevin Institute have dubbed the Housing Company of Ireland).
This company would borrow from a variety of sources (everywhere from Credit Unions to pension funds) and use the money to build rental accommodation.
Crucially, rents for this accommodation would be based on a ‘cost rental’ model. This is the magic ingredient to all the best rental sectors in Europe; Denmark, Austria and the Netherlands have all used them for decades.
Cost rents are pretty much what they sound like. Rent is set at a level that covers the cost of providing the accommodation (usually calculated over a 30 year period). Essentially, you take the total costs (construction, design, land, property management) of a development divide by the number of houses and spread it out over 30 years.
This means that as a tenant you pay a rent which covers the cost of providing your home, but nobody makes a profit from you. Cost rents ensure that the Housing Company of Ireland would have plenty of revenue to pay back its loans.
To get this system set up would take a significant initial investment. But once it is up and running it will be virtually self-financing.
But the system has many more advantages. Firstly, by setting non-market rents it frees tenants from the blackmail we are currently subjected to.
Today we hear that if we want more supply of housing we need to accept sky rocketing rents (in reality rents go up but the supply never seems to quite materialise).
By taking control of the supply of rental accommodation out of the hands of landlords we would no longer face a trade-off between affordability and supply. Secondly, tenants would enjoy the efficiency and effectiveness of a large, professional landlord.
Many of us are familiar with landlords who treat fixing a washing machine like a major logistical operation. Imagine renting from a company which managed thousands of units and hired dedicated property managers and maintenance professionals.
Finally, and perhaps most importantly, this system can deliver something tenants can currently only dream of: full security of tenure. You pay your rent, you don’t get kicked out.
No moving every year or so; no rearranging your life every time your landlord feels like it; no constantly feeling that the place you live can never really be your home.
Luckily, we don’t have to speculate about whether such a system can work in practice. The evidence from European countries is overwhelming.
In Austria, for example, the cost rental system has delivered between 14,000 and 19,000 units every year since 1994, making up 1/3 of all housing output over the period. And this is high quality, energy efficient and environmentally sustainable housing.
This is a crucial part of the overall stability of the Austrian housing system and one of the reasons they saw neither out of control house prices during the boom nor a disastrous housing crisis afterwards.
Check out this graph (above), which shows percentage changes in house prices in Ireland and Austria between 2000 and 2014. As you can see Irish house prices are all over the place while Austria’s are perfectly stable (for more on this have a look at this paper co-authored with Professor Michelle Norris).
The obstacles to the Nevin Institute’s model are political ignorance and political will.
Politicians, for the most part, are incapable of understanding what life is like for renters. They still live in a fantasy land where home ownership is the norm and all renters are students.
In terms of political will – and this is the big difficulty – our current government are opposed to any major intervention in the private housing market. They view the tiny minority of people who make money from property in this country as an important part of their political base.
To challenge both political ignorance and political will we need to build a tenants’ movement that can change the political climate.
The Nevin Institute’s proposal provides a powerful tool for that movement.
Dr. Michael Byrne is a lecturer in the School of Social Policy, Social Work and Social Justice and participates in the Dublin Tenants Association. Follow Michael on Twitter: @mickbyrne101
People’s basic needs, in terms of human rights, if we look at social needs, in terms of housing, health care, childcare, jobs decent-quality jobs – are not being met.
If we just take the housing crisis for example. We have almost 7,000 people homeless in this country, record numbers. There was almost 500 children homeless in 2014, we now have over 2,000 – that’s a four-fold increase in that space of time.
We have almost 100,000 families and individuals on the social housing waiting list… the facts are that there is 8,000 social housing units, that includes local authority and housing associations, that are in some stage of planning. There’s only 1,800 – that’s a quarter of that number – actually on site that is likely to be built in the next two years.
There was about 500 local authority, plus housing association, 500 social housing units built last year. At that rate we will be 200 years before we meet the housing waiting list. [Minister for Housing Simon] Coveney Rebuilding Ireland plan and the Government’s housing plan is not actually going to deliver the social housing and the housing that’s needed…
There are between 800 to 1000 families homeless in Dublin and, at the same time there are 20,000 vacant homes, vacant houses, according to the CSO. So that’s 20 empty houses per each homeless family. And it’s just illogical that we have this situation where housing/property is treated primarily as an investment, as an asset, rather than a home and a need.
And, you know, I think this underlies part of why we’re in this crisis. Because we have vultures buying up property, we have Real Estate Investment Trusts coming in. And we’ve the Government just sitting there – yet the Government could be building, you know, 10,000 affordable rental homes every year, if it took on models like the European cost rental model – which provides, using public land for a mix of incomes – Austria does it, Denmark does it. These countries provide much more levels of affordable housing than us.
But there’s this real, I’d describe like it’s an unwillingness to change things radically. And what is really disappointing … in the last election, there was a very clear message of people wanted investment in public services – they wanted a more equal Ireland – that was the message back.
It was a rejection of the idea of the recovery and yet, rather than taking that energy that’s there and we saw it, the same in Apollo House recently, where we had thousands of volunteers being involved and saying ‘we want to address this crisis’. And that’s what’s really disappointing.
The people still believe in the idea of a fair Ireland, they want to get involved in helping it. Yet, what are our politicians and our Government doing? It’s like they’ve given up on the idea of an equal republic. All they are focused on is their party and them getting one better on each other.
The disconnect between politics and between people’s lives, I think, has got to the point where it is just disgusting.
…The mainstream politics and main media discussion about politics is all about personalities and about competition for the spoils of power rather than actually ‘are we dealing with the issues that affect people’?
But if you talk to the people on the street – what do they want politics to be about? They want it to be about ‘are you dealing with the housing crisis, are you dealing with those awful, awful stories of children who are waiting months and years for health care? That’s what they want politics to be dealing with.
Dr Rory Hearne speaking on Tonight with Vincent Browne last night.
From top: Housing Minister Simon Coveney at the Rebuilding Ireland launch last December; Dr Rory Hearne
The latest social housing and homeless figures are frightening and show a crisis that will worsen significantly in coming years
Dr Rory Hearne writes:
The latest figures included in the government’s Social Housing Status Report and the January 2017 Homeless Figures are frightening, in terms of the worsening housing crisis and the inadequacy of the government’s response to address it.
Dublin City Council will be building just 560 new social housing units in the coming two to three years based on current plans.
At this rate it will take at least 30 years to house those on the Dublin City housing waiting lists. While only 604 social housing units started on-site in 2016 in Dublin City, just five in South Dublin and there were no local authority housing units started on site in Cork City last year.
While the homeless crisis continues to worsen. There were 7,167 homeless people in January including 4,760 adults and 2,407 children which is the highest number of homelessness on record. Dublin is worst with 3,247 adults and 2,046 children homeless.
According to Focus Ireland 87 families with 151 children became homeless in Dublin in January, which their Director Mike Allen, explained “means that shockingly a child became homeless every five hours in Dublin during the month of January.”
Minister Coveney’s Social Housing Status Report is deeply worrying from a number of perspectives.
Firstly the plan claims that, “a rich construction pipeline is in place, which will see over 8,430 new social houses being built over the coming years”.
Yet 652 houses of this new ‘pipeline’ are already completed, as they were built last year, and should not be included.
But most worrying is the fact that only a fifth (1,829) of this new pipeline are ‘on site’ already. That means that the majority of the new social houses in the plan will not be built until 2019 or 2020 on current building schedules.
What this shows is that there is no way the government will meet its targets for new social housing construction (it claimed it would construct 26,000 by 2021), and so we are likely to see around 1000 new builds in 2017, perhaps reaching 2,000 in 2018 and 2019.
That is no where near sufficient to address the level of housing need. We need at least 10,000 new build social housing units delivered per year.
Unfortunately Rebuilding Ireland and the Department of Housing do not provide aggregate numbers of housing units being delivered by the different organisations and areas.
In order to get a picture of what is happening in reality on the ground in terms of delivery in the key areas of social housing need I have gone through the social housing projects and timelines outlined in the Status Update delivery for the four Dublin Local Authorities and Cork City and created this table below.
From this we can see that most worryingly only 604 social housing units have started on-site in 2016 in Dublin City, just five in South Dublin and there were no local authority housing units started on site in Cork City last year.
In total just a third of the new social housing units outlined for these key areas started on site in 2016.
These figures also show that a significant proportion (37% across these areas, and 48% in Dublin City) of new social housing units are not being built by local authorities but by ‘Approved Housing Bodies’- housing associations, like Respond, Tuath, Cluid and so on.
At a national level just 75 local authority housing units were built in 2015 and there were only 161 new local authority houses built by September 2016. This shows the national 652 ‘new build’ figure itself is misleading as it is likely to be mostly AHBs.
The issue here is that it is local authorities are state authority responsible for meeting housing need and that have the capacity to upscale and deliver large numbers of social housing units.
Housing Associations can play an important role in delivery but their capacity is much more limited to provide new units on a large scale. They are not-for-profit (so far) but are private, not state, organisations.
What this table also shows is that in Dublin City, a third of the new build local authority housing units are ‘regeneration’ units. These should not be counted as additional new units as they are replacing existing social housing units in areas such as Dolphin House and O Devaney Gardens where residents are planning to return once building is complete.
Furthermore, we can see from this that while there is a social housing waiting list of almost 20,000 in the capital, Dublin City Council will be building just 560 new social housing units in the coming two to three years based on current plans. Including Voluntary Housing Bodies, this number increases to 1,255.
At that rate it will take at least 30 years to house those on the housing waiting list (that doesn’t include people who become newly homeless, in need of housing etc).
A major reappraisal of financing, delivery mechanisms and time-frame targets are required for social housing delivery if we are to address this crisis.
For example, local authorities should be allocated an additional €500 million to directly build, a new state housing authority should be set up to provide 10,000 mixed income affordable rental housing units per annum, and NAMA should be directed to provide the 20,000 housing units it is planning to build in the coming years for mixed income affordable rental housing.
Dr Rory Hearne is a policy analyst, academic, social justice campaigner. He writes here in a personal capacity. Follow Rory on Twitter: @roryhearne
The Central Bank of Ireland has released the residential mortgage arrears and repossession statistics for the third quarter of 2016.
The Central Bank writes:
The number of mortgage accounts for principal dwelling houses (PDH) in arrears fell further in the third quarter of 2016; this marks the thirteenth consecutive quarter of decline. A total of 79,562 (11 per cent) of accounts were in arrears at end-Q3, a decline of 3.1 per cent relative to Q2 2016.
The number of accounts in arrears over 90 days at end-September was 56,350 (8 per cent of total), reflecting a quarter-on-quarter decline of 2.1 per cent. This represents the twelfth consecutive decline in the number of PDH accounts in arrears over 90 days.
Buy-to-let (BTL) mortgage accounts in arrears over 90 days decreased by 2.4 per cent during the third quarter of 2016. At end-September there were 14,518 BTL accounts in arrears over 720 days, with an outstanding balance of €4.3 billion, equivalent to 18 per cent of the total outstanding balance on all BTL mortgage accounts. There was an increase of 5.4 per cent in the number of BTL accounts where a rent receiver was appointed; this follows on from an increase of 1 per cent in the previous quarter.
In Saturday’s New York Times, Liz Alderman reported:
The Tobun family never missed a rental payment on their modest brick rowhouse in eight years. But in February, the couple, who have two young children, received a letter warning that they would be evicted when their lease expired. Forty of their neighbors got the same notice.
When they went to investigate, the tenants, in the working-class suburb of Tyrrelstown, discovered a trail that led all the way to Wall Street.
After Europe was ravaged by a financial and economic crisis, the giant investment bank Goldman Sachs snapped up huge swaths of distressed debt in Ireland, including the loans of Tyrrelstown’s developer in 2014. The developer [brothers Rick and Michael Larkin, of Twinlite] now wants out of the rental game and is selling the properties. As the owner of the loans, Goldman will reap a large portion of the proceeds.
Goldman has nothing to do with the possible evictions here. But because American banks have played such a large role in Europe’s housing recovery — and have made huge profits in the process — they have become the main target of a growing backlash among homeowners and renters.
“Somehow, these funds have gotten involved in our community,” Funke Tobun said. “They’re profiting, but it’s the people who are being made to suffer.”
Wall Street has become the biggest new landlord in Europe, as American financial firms have swept into cities, suburbs and towns to take to advantage of the fallout from the worst economic downturn since World War II. In the last four years, Goldman Sachs, Cerberus Capital Management, Lone Star Funds, Blackstone Group and others from America have bought more than 223 billion euros’ worth of troubled real estate loans around Europe, nearly 80 percent of the total sold.
The firms have made the usual calculation: buy distressed investments on the cheap during tough times, betting that the outlook will eventually turn and riches will follow. And the firms are paying little or no tax, by employing complex strategies that often involve subsidiaries with no operations or staff.
The huge profits and dubious tax strategies have made Wall Street a major object of frustration and anger, as people grapple with evictions and higher mortgage payments. In some cases, the Wall Street firms are passive players, the money men behind the landlords, developers or banks that are exerting force. In other cases, they are direct participants taking action.
…Ireland is now enjoying a robust recovery. But growth has been fueled partly by financial maneuvering, and the real underlying gains are far from even. More than 5,000 people have been left homeless by the crisis, with the government subsidizing many in shelters.
Mrs. Tobun does not have many options. She does not want to move farther out, since it would mean changing schools for her son who has special needs. A nearby rental is too expensive. Rents in Ireland have risen around 20 per cent since the crisis as home construction dried up after the bust.
…Like other Wall Street players, Cerberus came into the country quietly, creating a local subsidiary under a different name and setting up a complex and extensive web of interconnected businesses.
There are the 13 subsidiaries in Dublin, all with Promontoria in their names. They have no employees and no offices. They are all registered to the same address on Grant’s Row, a letterbox near Parliament. Those subsidiaries, in turn, are subsidiaries of holding companies in the Netherlands, more than 110 of which had the Promontoria name.
The structure has helped Cerberus profit in Ireland…
Minister for Finance Michael Noonan in the Dáil, on October 11, delivering his sixth budget speech since 2011
Minister for Finance Michael Noonan has delivered six budget speeches since 2011.
On October 14, 2015, in relation to Budget 2016, he said:
“There will be no return to the past where tax incentives for developers drove supply.”
On October 11, 2016, in relation to Budget 2017, he said:
“There is an acute shortage of new houses being built in Ireland and I am introducing a Help to Buy Scheme to address this problem.”
Further to this…
First-Time Buyer writes:
No one would deny that we have a housing and homelessness problem. However despite house prices increase ranging from 20% to 50%, there has been very little increase in output.
So what is the problem?… Land hoarding.
Brendan McDonagh recently told the Housing and Homlessness Committee that since the start of 2014, NAMA has sold land that could provide up to 20,000 units – but just 5% of that has so far been delivered in new homes.
In addition, local councils have zoned enough land to provide for 16 years’ demand but many of these sites are not being developed because owners are holding onto sites in the expectation that prices will rise, allowing them to maximise profits.
Unfortunately, councils have no legal powers to force owners of zoned lands to build, even if planning permission is in place and demand for homes is high.
The 3% annual level on unused development land that was introduced in the Urban Regeneration and Housing Act does not take effect until three years after the land is identified as being suitable for housing and the earliest owners will have to pay is 2019.
Furthermore, the CGT exemption that was brought in 2012/2013 allows people to buy land, hold it for seven years and not pay any tax on its sale. So, rather than selling the land people are sitting there waiting until 2019 before they’ll release it to the market.
Even at an individual level, the Government has ensured that properties are passed from one wealthy generation to the next rather than be placed on the open market.
The Government increased the inheritance tax threshold by 11% to €310,000 and Noonan has refused to close an openly abused loophole which allows parents gifting homes worth €1m or more to their children and avoid tax.
So, rather than address the supply side issues, the Government has decided to introduce a Help To Buy Scheme. This will do nothing to address the supply side constraints and, according to Davy’s economists, will simply push up house prices next year and the following year.
The best part though is that in 2015 the same Government commissioned an ERSI report entitled “Tax Breaks and the Residential Property Market” in which they concluded that “tax breaks aimed at stimulating house and apartment building should be avoided”.
The Governor of the Central Bank, Philip Lane, is one of the many critics of the new Help To Buy Scheme and has said that it will end up serving as a subsidy for builders…
End of local authority housing as we know it, three quarters of council land to be privatised, no challenge to EU rules and rocketing rents to remain.
What’s not to love?
Ruth Coppinger writes:
The government’s Action Plan on Housing sadly repeats the failed focus on incentivising the market through increasing the profit of developers and landlords.
The market caused the crisis, now this neoliberal government turns to it to resolve it.
Given the scale of the housing emergency, the poverty of ambition is startling, considering also the much-lauded economic growth. The aim is to house only one-third of those on current lists by 2021.
Presumably the rest can just wait another 10! The figure of 47,000 ‘social houses’ is a mix of new-builds, refurbishments, acquisitions and leasing, the latter often impermanent. It falls short of even the Housing Committee target and adds on another year.
As I pointed out with the Housing Committee Report, funding and delivery is dependent on keeping within strict EU fiscal rules.
The Plan confesses that while the housing emergency has been raging, the Dept has scandalously spent two years trying to come up with a workable off-balance sheet model to do this.
If implemented, this will mark the end of local authority housing as we know it. Not alone will ‘additional social housing provision (be) a combination of building, acquiring and leasing’, but councils will not be directly funded and allowed to fully build on their own land.
They will be forced to hand over 75% of it to private developers. A new form of housing estate will be created on public lands: only 25% will be council housing and the rest private mortgages and affordable/’cost rental’ where tenants will pay up to 80% of the market rent, rather than a differential rent based on their income.
The key to resolving the housing emergency is to use council and Nama lands, for councils to directly employ labour and build on public lands on a large scale, cutting out the private developers cut (often 11-15% ) and keeping costs down.
The document is laced with stigmatising phrases about council housing, such as ghettoisation and not repeating ‘mistakes of past’.
But if social housing is limited to 25%, we would have to build 560,000 houses to clear the 140,000 on the council’s lists!
Local authority estates can be highly successful if well planned with facilities and open space. The income eligibility could be raised allowing more workers avail of affordable mortgages or council rents.
But there is never a concern for ‘tenure mix’ in Killiney or Malahide.
The real reason for the ‘tenure mix’ is to have a rental funding stream to achieve the neo-liberal ‘off balance sheet’ rule.
For the 6,000 people in emergency accommodation, there is little except more overpriced modular or transient housing. The emphasis is on forcing people onto HAP or private rental, potentially miles away from the family’s choice of area.
Despite the Private Rented Sector being the cause of homelessness, the government promotes it, extolling it’s virtue of supporting “a mobile labour market, as renting households may more easily pursue job opportunities.” It ignores the interests of workers and families who want to live in a fixed community.
Instead of rent controls to stop the huge hikes which are making people homeless, the Plan proposes no measures to curb profiteering on rents, it defends and promotes landlord interests by continuing the use of the private sector as a substitute for public housing, alongside introducing a new range of tax breaks to ‘incentivise’ landlords. No moratorium either on repossessions.
Rather than driving down the cost of housing to affordable levels, a ‘help to buy’ initiative for first time buyers would end up in the pockets of developers.
Michael Noonan told the Housing Committee ‘we do not have a shortage of money’. He is right. €5.4 billion is sitting in the Irish Strategic Investment Fund – the remnants of the pension reserve fund after it bailed out the banks.
But he admitted that EU fiscal rules prevent us actually spending it on public housing. It must be ‘off balance sheet ‘ and involve the private sector or be self financing. The same goes for the €2.4bn cash reserves Nama has left.
Neither do EU fiscal rules prevent taxation on wealth being used to finance housing. So, a millionaire’s tax could be introduced. The headline rate of corporation tax could be immediately imposed and increased to house our homeless.
The government could stop its opposition to Apple repaying €17 billion in back taxes to this country. There is vast untapped and untaxed wealth that could be used to fund affordable and secure home building.
Only a government that is willing to challenge and breach those rules can end our housing emergency.
That government is not this government.
Ruth Coppinger is a member of the Socialist Party and an Anti Austerity Alliance TD for Dublin West. She has occupied Nama housing with homeless families. Ruth is a member of the Housing Committee and has published her own housing Minority Report. Follow Ruth on Twitter: @ruthcoppingertd
In addition, it has published commencement statistics only for the month of May 2016.
In the month of April 2016, 1,149 residences were completed nationwide, of which 296 are in Dublin. Completions are measured by reference to first connection to the ESB.
In the month of April 2016, commencement notices for 784 residences nationwide were filed, of which 242 are in Dublin.
In the month of May 2016, commencement notice for 1,223 residences nationwide were filed, of which 412 are in Dublin.
When you want to start building a residence, you need to notify the Building Control Authority in your local council 14-28 days before you actually start building, and building needs to commence within 28 days of providing the notification.
It takes 3-6 months typically to build a residence, so commencement statistics give a forward-looking indication of future housing supply.
How many new residences do we need a year?
There are different views. In 2014,the ESRI estimated we need 25,000 new residences a year up to 2030. Government departments have adopted this research by the ESRI’s David Duffy, and it represents the official position.
(1) if annual housing need isn’t met in any year, then the shortfall will be passed on to the following year and in 2014, we completed just 11,016 residences and, in 2015, we completed 12,666 units.
If you accept the ESRI analysis, then in 2016, we started with a 27,000 deficit from the previous two years before consideration of the 25,000 units we need for new demand in 2016.
(2) there are other views as to how many units we need annually. Based on the assumption that Irish households are shrinking by 0.04 a year (there were 2.68 people in the average Irish household in Census 2011, but the number has been declining by an average of around 0.04 a year over the past two decades, as we near the European norm of around 2.4 people per household), we need around 17,000 units a year for fragmenting households.
We also need units to replace obsolete stock. The ESRI estimate obsolete replacement need at 5,000 units a year (that’s included in their 25,000 analysis). Other sources suggest international obsolescence rates are 0.5%, which would equate to 10,000 units a year in Ireland, which had, according to Census 2011, 2m residential units.
And, based on April 2015 population estimates compared with April 2014 (the latest available), and assuming 2.52 people per household, the annual housing need is closer to 50,000 units, of which 23,000 would be in Dublin.
NAMA, for instance has told an Oireachtas committee that over 20,000 units a year are needed in Dublin alone.
So, what do today’s published figures mean for the housing crisis?
With 25,000 units needed a year, according to the official position, equivalent to 2,087 a month, and with just 1,149 completed, it means the housing crisis has gotten worse to the tune of 938 in the month of April 2016.
With 10,000 units needed in Dublin, according to the official position, equivalent to 866 a month and with just 296 completed, it means the housing crisis in Dublin has gotten worse to the tune of 570 in the month of April 2016.
The housing crisis got crisisier in the month of April 2016.
Do today’s figures give any guidance about the future?
Yes, the commencement statistics should point to completions in 3-6 months time.
Alas, assuming the average commencement-to-completion duration is 6 months, the commencements indicate that in 2016, just 8,514 residences will be completed in the first 11 months of 2016, or which 3,193 will be in Dublin.
If the housing crisis is getting worse, what does that mean?
More people won’t be able to live in suitable accommodation in their preferred location and a greater proportion of household income will be spent on rent or house purchase.
The number in emergency accommodation (hotels, hostels, B&Bs) will increase. There were 6,100 in such accommodation at the end of April 2016, of which 2,100 were children.
The numbers sleeping rough on the street, in parks or in cars will increase.
The hidden homeless sofa surfing or staying in unsuitable or cramped accommodation will increase.
The 130,000 households on the waiting list for social housing will have to wait longer. Last Monday night, Vincent Browne estimated that these households equate to around 500,000 people.
Rents inflation (presently running at 9% per annum, and 20% per 24-month period) will continue to outstrip general inflation (presently 0.0%) and wage increases (presently 1.1%) and that will lead to lower disposable household income for renters.
From November 2016, there will be substantial number of tenancies each month which are subjected to a 24-month rent review and the trend in rent inflation suggests reviews will be in the 20-25% range, that is, a €1,500 monthly rent will be increased by €300-375.
Basic supply and demand principles will keep house price inflation elevated above general inflation.
Were it not for the mortgage rules, residential inflation would probably be 10-15% per annum, but even with mortgage rules, residential inflation is 7% for the 12 months to April 2016.
There will be lower disposable income for house buyers.