A political analysis of the housing crisis in Ireland and how it can be resolved

Read the first article in this series – Click Here

Written By: Patrick Prizeman 

Contemporary Irish society faces many issues that are imperative to the future of the state and none are more pressing than the current housing crisis. “Everyone agrees Ireland has a huge housing crisis. The housing “market”, if one can call it that, is completely dysfunctional.” (Regan, 2016) Aidan Regan said it best in his blog post that followed the release of the government’s Action Plan for housing. Rent rates are at an astronomical level, along with the price of houses and in turn this has led to a dramatic rise in the number of people that are homeless throughout the country…especially in Dublin (Regan, 2016).

There is an estimated 6,000 homeless people in Ireland at the moment, with over 4000 of them being in Dublin. (Homelessdublin.ie, 2016) There are literally thousands of empty properties around Ireland… and plenty of space that should encourage the production of housing… However, there is a very clear obstacle in the way to fixing the problem of homelessness throughout the country and that is the lack of supply or construction of houses (Regan, 2016). This has not gone unnoticed by the population either.

The ‘Home Sweet Home’ campaign that has effectively housed many individuals and families over the Christmas period, has shed light on the government’s failure to tackle the problem surrounding homelessness. A group of activists and actors, who were led by famous musicians such as Glen Hansard and Christy Moore… managed to successfully occupy Apollo House  (a property owned by NAMA that lay vacant) (Cullen, 2016), in order to provide a stable base for homeless men, women and children to wash/feed themselves and to take refuge from the brisk holiday weather. However, this act was met with disapproval from the receivers of Apollo House… who brought the issue to the High Court in order to have the building vacated. (RTE.ie, 2016)

Although the government released the ‘Action Plan For Housing and Homelessness’ in July of 2016, it is plain to see that the population want to see action taken at a much faster pace. The government addresses this argument and even accept that they have not acted promptly enough with regards to the construction of new housing… or the use of existing housing to its full potential… admitting that they ‘have not delivered a response of the scale and speed required to fix the housing crisis’ (Government of Ireland, 2016).

Failure to act immediately may cause further embarrassment for the Irish government as it has become evidently clear that the citizens of Ireland are extremely unimpressed with the attempts to rectify the concerns surrounding vagrancy, and are not afraid of taking matters into their own hands (in the form of peaceful protest). If this is not handled quickly, then the current Fine Gael and Independent coalition could face the consequence of losing further support from the Irish public, which would be extremely detrimental to their hopes of retaining their place in office.

There is a very obvious problem and that is a lack of supply.  Basic economic principles of supply and demand show that the smaller the amount of a good (in this case houses) produced, then the higher the demand, driving up the price in the meantime. One of the main obstructions to the increase in the number of houses that can be supplied is that the banks are no longer lending in the same manner as before and… it is no coincidence… “It is an outcome of incentives” (Regan, 2016).

The ‘rebuilding of Ireland’ through the action plan fails to acknowledge the main problem with the housing market and that is the fact that the banks hold all of the power… through the control of the supply of mortgages and loans for development. Quite frankly, it is not in the banks’ interest to increase supply… as a fall in price could potentially expose “the underlying debt dynamics of the bank’s balance sheets” (Regan, 2016).  So a key question that must be asked here is, if Ireland built large public housing schemes over many decades when it was still poor, why does it rely so heavily on the market to provide housing now? And how can we increase the supply of housing as soon as possible with/without the help of the banks?

Another hindrance to improving the current housing market instantly, is the fact that foreign companies are buying up the land and buildings that are being put up for sale by NAMA (National Asset Management Agency)… The reason that this is an obstacle in the way of solving the hosing crisis is because of the fact that NAMA would rather choose to “fatten the vulture funds”, over supporting a young couple that are trying to purchase a house… seeing as their aims are to maximize commercial return to the state (Hearne, 2015). What we need to do, is guarantee that these buildings and houses stay under the control of the government or its citizens. There is a massive conundrum within the Irish housing market at the moment and it is a lack of first-time buyers/buyers in general as well as an abundance of renters. It is important to get back to the position of being a ‘home owner society’ (Norris, 2013)… ‘Where a dwelling was rented and a home was owned’ (Norris, 2013)…‘the truly authentic vision of the house was the one owned by its occupier and it was by this vision that housing policy and home making were fashioned.’ (Norris, 2013)

apollo_house_occupation

        The necessary criteria of a successful policy proposal for the housing crisis must be to offer cheap (in severe cases temporarily free) attainable housing for all. In order to achieve this, either the adequate funding must be made available or current funding must be utilized in a more productive and efficient way. Additionally, the policy proposal must show how quickly it can achieve its goals. If there is no way of attaining the funding needed, then the proposal must aim to utilize any amenity that could be harnessed to help lessen the cruelty of the situation. The success of a policy proposal can also be measured by how effective it is in being able to get homeless individuals back into the work force and back paying taxes. Finally, any propositions will be judged on how well the policy proposal manages the price of housing. It is essential that the Irish government do not allow house prices to rise to a level that would be reminiscent of the Celtic Tiger. 

It’s easy to see why this is such an urgent issue. In Dublin your average rental price for an apartment is over €1200…. While the average rental price of a house is over €1300 (DeBuitleir, 2015). One option to improve this could be the introduction of a housing grant. This grant could be given over a short period of time to buyers who are on relatively low income but want to take their first step onto the housing ladder. By giving grants to first time buyers and citizens on low incomes, you are encouraging them to buy now and in turn, inspiring the tenant to enable themselves within the work force in order to fully own the house. It wouldn’t be the first time that grants have been issued in order to improve the amount of home owners… having brought the Irish housing market to an impressive super-normal level in the 1980s/90s (Norris, 2013) that had earned the government at the time much praise domestically and internationally.

Although it is not in the banks’ interests to rapidly enhance the source of housing available to our citizens, we must find a way bypass their wishes. One way of doing this would be to protect the Irish citizens by enshrining the right to some form of housing into our constitution. Surely the citizens of the state along with their safety and security should be placed above the desires of our banks and corporations. Just look at Iceland who decided not to bail their banks out and to place the livelihood of its people above the survival of its banks and it seems to be working for them. The right to a home should be the absolute bare minimum expectation for the citizens of our modern society.

Sadly, there is much ambiguity surrounding the issue of the right to accommodation. “Around the world, the right to housing is included in 81 constitutions”… Some European examples include Spain, Belgium, the Netherlands, Portugal and Finland… (Regan, 2015) What this would mean, is that judicially, the Irish citizens would now be protected by the courts. This would enforce the state to take into account the each citizens’ claim to housing when considering policies regarding homelessness… Consequently, this would allow the courts to interfere with government policy if it felt that the right to housing was not protected (Regan, 2015) or if funds were cut too low like they were prior to 2012.

The right to a home should be universal within society and by protecting this right within the constitution it would be made far easier to allocate the necessary funding towards  offering cheap accommodation. The government would be obliged to ensure that all citizens have a right to social housing, at the least. A home provides the required base for an individual or a family to decide what they want from life. Let us think for a moment, what it would be like trying to get by in our advanced society without a foundation for planning and rest. I understand that the argument may be raised for those that would abuse the generosity of what is being proposed, by not activating themselves within society and thus wasting the tax-payers money. However, in theory I believe as long as the individual or family are doing their utmost to either rejoin the workforce, or at least begin the process of getting back to education – then it is the government’s duty to support them. If in certain circumstances some citizens take advantage of the proposal that the policy would put in place, then actions would be taken in order to warn the person/s that they need to show signs that they are working to become a progressive, productive member of society and not just a leech on the system, to put it harshly. 

 I firmly believe that the establishment of the right to housing within the constitution would have countless positive impacts on our society. It would enforce the government to try and fix the problem quickly, while also taking the power out of the banks hands – which is the main issue. This would improve the measures of public health by taking families out of cars and off of the streets and placing them in a temporary home at the very minimum so that they can at least take their kids to school and feed them.  By improving the standard of living for these families, I believe we would also see an improvement in the long run for student achievement. By supplying citizens with a home, the opportunity to focus on integral issues such as education, becomes a lot more realistic. Instead of worrying about where they are staying, they can instead worry about school and potentially even university. As well as improving public health and education, we as a nation would also profit economically in the long run. This would be achieved through a more active work force, due to more citizens having a steady base to operate from. While the initial policy goal would be to improve the current housing crisis, it would also additionally improve society in many ways as stated above.

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Another possible solution to the housing crisis would be to place more power in the hands of the minister for housing, planning, community and local government… which the Irish Times suggested in this edition (The Irish Times, 2016). The government could also consider implementing a minister for just housing on its own. The minister would need the adequate funding necessary to conduct real change and planning. But if the funding was made available and the basic human right to housing was legitimized within our constitution, then this would equip the minister with the power necessary to make a huge difference. Firstly, they would have the backing of the courts. Secondly, the minister would have the potential to entice construction companies to help build more housing, creating jobs in the process. Some of the funding for this could be achieved through the removal of ‘funded emergency accommodation’ in hotels and hostels etc and instead, negotiating a deal to occupy vacant buildings throughout the country while the necessary building is conducted.

The homeless that occupy these vacant buildings can continue to avail of the voluntary services that are made available by many charities and supports such as Home Sweet Home and St Vincent de Paul. Funding for building could also be raised by taking a more open minded and creative approach. For example, it is believed that the Irish League of Credit Unions offered €5billion to help fund the production of houses…. (The Irish Times, 2016) This could go a long way to helping the government fix the crisis.

A combination of the three proposed policies (a grant for low earners/first time buyers, more power in the hands of the minister for housing and finally the preserving of a right to housing in our constitution) would massively aid the problematic challenge that is the housing crisis. All policy proposals would work together to safeguard the government and the population. It would mean a massive step in the right direction for the Irish government and its people. There should be an incentive for our youngest and brightest, as well as the rest of our Irish citizens to want to stay in the country, to help us improve. The suggestion of the grant for low earners and first time buyers would offer those stuck in the renting market a way out and the possibility to own a home rather than spending years trying to save for your first step onto the housing ladder (which would be extremely unlikely given the current rental prices discussed above).  

The protection of the Irish citizens through their national, human right would also spur these citizens off of the streets and towards possible outlets to help find them a home. Finally, the minister for housing would offer the support necessary that goes into the planning. The backing of the courts through the constitution, would grant some like Simon Coveney who is the current minister, with the correct tools necessary to conduct a complete overhaul of the current housing situation. I predict that by taking control of an extremely precarious issue, the government would be met with overwhelming support from the Irish public (something that is sorely needed right now).

It would address the underlying narrative where many Irish citizens justifiably feel as though the Irish political regime sacrificed the wellbeing of the people in order to save the banks and show that they are dedicated to placing the safety and security of the people at the forefront of their planning. In the words of Niamh Hardiman; “The Irish banks rescue has been exceptionally onerous for the Irish state. The total volume of public funding that has been channelled into the banking sector, amounts to about €65billion… or 45% of GDP” (Hardiman and Dellepiane, 2013), so let us not feel anymore sympathy towards the banks or fear the EU, we must act quickly and drastically in order to fix these grave injustices that have occupied our society for too long.

Some may argue that this approach would be slightly radical and I admit at first, it would be. But this is what we need, those at the bottom of society have suffered for too long and it is the obligation of the government to protect and support these people in their time of need. Initially, it would take some hard work to plan these policy proposals, but I predict in a time span as short as one year, we would be able to not only drastically lower the rates of homelessness, but also lower the price of housing and renting, in turn creating a more stable housing market for the Irish people to act within. And while I admit that more research would need to be conducted in order to effectively initiate these proposals, I still feel as though this is a realistic, attainable goal.

The rising homelessness records would come to a dramatic, immediate end. And although my estimation is only theoretical, within 1-2 years (if not sooner) I believe the problem would be solved not temporarily, but permanently. Future generations would be tempted into the housing market and those in the most severe of circumstances would be assisted by the mass production of social housing that would be warranted by the constitution. Some may find the far-reaching goals of these housing proposals to be too naive or romantic, but let us take inspiration in the fact that the Irish nation has the power to make real change within our international system. As we achieved through the legalization of gay marriage, I believe we could yet again encourage the developed and developing nations of the world to place emphasis and focus on the standard of living for their inhabitants and away from the demands or wants of banks and corporations.

Bibliography/ References – 

Cullen, P. (2016). Apollo House protesters to meet owners over occupation. [online] The Irish Times. Available at: http://www.irishtimes.com/news/ireland/irish-news/apollo-house-protesters-to-meet-owners-over-occupation-1.2910660 [Accessed 1 Jan. 2017].

DeBuitleir, D. (2015). Rental Costs in Ireland : The Evidence. [online] Public Policy, Public Expenditure & GNP. Available at: http://www.publicpolicy.ie/rental-costs-in-ireland-the-evidence/ [Accessed 10 Jan. 2017].

Government of Ireand, (2016). Action Plan For Housing and Homelessness. Government of Ireland, pp.1-83.

 The Irish Times. (2016). Grappling with the housing crisis: Fresh approaches needed. [online] Available at: http://www.irishtimes.com/business/economy/grappling-with-the-housing-crisis-fresh-approaches-needed-1.2586066 [Accessed 8 Jan. 2017].

RTE.ie. (2016). High Court action to have Apollo House vacated. [online] Available at: https://www.rte.ie/news/2016/1220/840244-apollo-house-high-court/ [Accessed 4 Jan. 2017].

Homelessdublin.ie. (2016). Homeless Figures | HomelessDublin.ie. [online] Available at: http://www.homelessdublin.ie/homeless-figures [Accessed 5 Jan. 2017].

Norris, M. (2013). Varieties of home ownership: Ireland’s transition from a socialised to a marketised policy regime. UCD Geary Institute, pp.1-10.

Regan, M. (2015). Why the right to housing should be enshrined in the Irish Constitution. [online] The Irish Times. Available at: http://www.irishtimes.com/opinion/why-the-right-to-housing-should-be-enshrined-in-the-irish-constitution-1.2327427 [Accessed 8 Jan. 2017].

Regan, A. (2016). The housing crisis is all about the politics of debt. [Blog] Available at: http://www.irisheconomy.ie/index.php/2016/07/20/the-housing-crisis-is-all-about-the-politics-of-debt/ [Accessed 1 Jan. 2017].

Hearne, R. (2015). Nama is more likely to fatten the vulture funds than provide affordable housing for young couples. [online] Journal.ie. Available at: http://www.thejournal.ie/readme/nama-social-housing-2494173-Dec2015/ [Accessed 12 Jan. 2017].

Hardiman, N. and Dellepiane, S. (2013). Building on Easy Money: The Political Economy of Housing Bubbles in Ireland and Spain. [online] pp.1-32. Available at: https://poseidon01.ssrn.com/delivery.php?ID=8211220960020800661191050050250960770260330260840010281041110180061160130280640780970210291230610201131140951120030110000871270460730060360591260041251260940120960560770540780650051180860991240720800641

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One thought on “A political analysis of the housing crisis in Ireland and how it can be resolved

  1. I agree with most of the points made here. I would however suggest that this is a somewhat modernist (build more new houses) and financial (grant aiding) approach to a problem that has (I would suggest) a parallel solution but one which require command-and-control intervention not just incentives and taxation.

    The city/county and the national state could benefit substantially from the right (and the duty) to compulsorily purchase vacant land and vacant buildings at fixed prices. Look at our towns. Satellites of Dublin are collapsing (take Dunlaoghaire and Bray for example). We see the same in almost all rural towns in Ireland. Even worse, this is the case in the inner city where we see abandoned buildings falling apart (many of which are part of our cultural heritage even though, behind the preserved facade, saved by a protection order) there is only a carpark or a rotting building — the roof vandalised by some speculator for a quicker collapse.

    We need to make these habitable and we need to bring back the shopfronts (which will require reduced rates and zero cost public transport for shoppers).

    Bring our town centres back to life with people living on the main streets and close the suburban shopping malls and you have living cities that use public transport and a beautiful place to live where speculation and sitting on land whether it is done by speculators in or out of NAMA will stop. What has been done already is delayed and luke-warm; instead we have a delayed small (future) tax on these vacant properties. That is not enough; take them back rebuild them and release them as community rentals at fixed prices to bring up availability and bring down the price of housing and rents to half the current rates for Dublin city and county.

    I also wrote a solutionist piece on openDemocracy which might be of interst https://www.opendemocracy.net/can-europe-make-it/tony-phillips/dublin-s-housing-cultural-revolution .

    Tony Phillips

    Liked by 1 person

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