Solving housing will be time consuming
The housing crisis has become the defining issue in Irish politics.
It has been brewing for years. Solving it will likewise be a time-consuming business.
Failure to address the problem in a timely fashion could have huge ramifications, both business and political.
The battle to secure broad-based ownership of the land, including security of tenure, reshaped Irish political life almost a century a half ago.
In the early post-war years, priority was given to social housing but in the 1980s, a shift occurred in favour of the provision of tax incentives for private ownership in line with popular demand.
Much of the public housing stock was frittered away as we aped Margaret Thatcher’s successful vote-garnering right to buy schemes. Investment in new public housing began to tail off.
After 2008, many learned the hard way that possession of a private property, or several properties, on the back of a loan or loans granted by financial institutions did not equate with ownership in the true sense of the word.
Another impact of the crash began to be felt when the economy began to recover after 2013. As jobs were created, demand for housing soon rose in its wake.
The political system has only gradually responded.
Taxes and charges applying to home building are arguably too high, taxes on built properties and in particular, unused development land, too low.
The banks, still financially fragile and now much more risk averse, have also failed to rise to the challenge.
Now we are greeted with a blizzard of political initiatives, some useful, some not.
What is required is both crisis management leading to speedy provision and longer term thinking.
Public land needs to be made available for social housing — if legislation and tough intervention is required to speed the way, so be it.
Planning laws and administration could be changed to increase residential provision in Irish town centres where vacancy rates are unacceptably high.
Robin Mandal, architect and former president of the Royal Institute of the Architects of Ireland (RIAI), has warned that builders here continue to provide too many three to four-bed homes yet “we are heading for a
European city norm where only 27% of households are made up of families”.
He calls for much greater flexibility when it comes to building standards.
As he put it: “Design matters more than area size. A well-designed boat is far more livable than a badly-designed home.”
We could learn a lot from our European neighbours, particularly when it comes to long-term planning.
Take the Netherlands. The Dutch used much of their natural gas windfall for investment in new housing. In recent decades, the focus has shifted towards renovation of the housing stock.
Some 35% of Dutch homes are managed by social landlords while just 12% is privately rented. Just over half are owner occupied. Two decades ago, local authorities moved away from directly managing this stock to a supervisory role. Housing associations play a prominent role.
Budgetary tightening has forced them to adopt a much more business-like approach. In return, there is real commitment.
Facilities have greatly improved.
Between 1995 and 2000, the proportion of homes with doubled glazing rose from 51% to 63% with a similar increase in roofs being insulated.
In the Netherlands, France and Sweden, social housing is provided for people on all incomes, not just those on low incomes. Dutch housing associations are much larger and better
financed than their UK and Irish equivalents. In Sweden and the Netherlands, these bodies are now net contributors to the national coffers.
In France and Denmark, a broader approach is adopted by social housing providers many of whom have pioneered the development of mixed communities and are heavily involved in urban regeneration, economic as well as physical.
France is one country where investment in social housing held up even during the financial crisis, though the country does face huge problems with run down estates in the suburbs
encircling its cities.
Across much of Europe, the social housing stock has been in decline, but at a much slower rate than in the
1990s when privatisation was in vogue, particularly in Eastern Europe.
But most of the countries of Western Europe have avoided the UK and Irish mistake of heavy dependence on sometimes grasping private landlords, many of whom provide a poor return for the huge state investment in financial support for struggling tenants.
A key lesson from countries such as the Netherlands and Denmark is that housing associations offer a viable
alternative to landlords or old-style public estates, which often suffer from neglect.
Financing arrangements need to be in place, with backing from central government. Large social housing providers should be able to borrow at very competitive rates in the expectation that rental income will begin to flow once the schemes are completed.
Well-run corporate landlords such as Kennedy Wilson are set to play a part, but mutualisation of housing provision also offers a real way forward.
Irish credit unions and agricultural coops have shown the way. There is no reason why we cannot build property equivalents over time.
The Government is right to try and put short-term measures in place, but now is the time to act strategically with a view to reshaping and upgrading home provision in the coming years.
