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