Where do we stand on solving Ireland’s housing crisis?
Ireland’s housing crisis is gravely affecting the nation, with dreadful headlines splashed across the media on a daily basis, telling us all just how bad things have gotten. Thousands of people are without homes, (Focus Ireland reported that 85 families became homeless last month) desperate and wondering when their government will step in to help amend this abhorrent situation. The country is waiting with baited breath, in hopes that this next year will see an improvement in this escalating issue. The following article will explore the solutions which have been posited and what is currently being done to solve Ireland’s housing crisis.
What has the government done?
The lack of available houses is the main cause of this current housing crisis. The growing population rates of Ireland mean at least 25,000 new homes would have to be made per year, which is a stark contrast to the measly 7,000 that commenced building in the first 10 months of 2015. In an Irish Examiner article, DKM economic director Annette Hughes writes, “It is widely acknowledged that the lack of supply is the key issue preventing restoration of a fully functioning market.” She suggests that, “In the public sector, we need to see upfront construction of new units under the social housing strategy,” and, “In the private market, the necessary finance to progress planning permissions needs to be urgently sourced.”
In May 2014, Construction 2020 was published as the government’s first real response to the crisis. However, the plan was criticised for being more of a “strategy for strategies, recommending the setting up of taskforces and working groups.” With no definitive commitments for action, it still left much to be desired.
In October 2014, two reports were published following, “a comprehensive assessment of the private rented sector for the Private Residential Tenancies Board by DKM Economic Consultants, the ESRI and Ronan Daly Jermyn, supported by surveys of tenants, estate agents and landlords by Red C.” These reports analysed the options that would help guarantee the “future sustainability of the private rented sector.” To be precise, 34 recommendations were made within the document and a “small number” of these were introduced one year later by Alan Kelly (Minister for the Environment, Community and Local Government), as part of his “package of measures to deliver rent certainty and boost housing supply.”
Other proposals taken on board by the government are mentioned here. Surveys show that although these are steps in the right direction, not all tenants are aware of their rights and this becomes a “serious issue” and one by which the new plans could blunder. Furthermore, the Irish Times reports that, “The measures won’t make a dent in existing rents, and it’s far from certain that they will make renting a viable long-term option.”
Though the DKM report mentioned above did not favour the changing of the rent review period from 12 months to 24 months, calling the case for it “relatively weak”, the government implemented the freezing of rents for a full two years. This has been met with mixed feelings and general scepticism, given the fear that landlords may “overcompensate by front-loading rent increases in advance of a rent freeze being put in place.” Therefore, it’s most likely not coincidental that “Daft.ie reported the highest three monthly increase in rents in the third quarter of 2015 since early 2007.”
Where do we go from here?
Alan Kelly is “opening the discussions” as the latest figures show an increase in homelessness and continuing difficulties across the board. Various organisations have posited their ideas for improvement, notably the Simon Communities, which circulated its recommendations at a “homelessness forum” held March 31st. The national charity works to provide services and support to those either experiencing homelessness, or at risk for homelessness. Their four-step plan calls for “an increase in rent supplement, more security for tenants in the private rental sector and measures to ensure people can stay in their homes.” Additionally, the plan includes, “a proposal for the State to encourage financial institutions to sign up to the best practice agreement drawn up by the Private Rental Tenancies Board (PTRB).”
It has yet to be confirmed which of these proposed points, if any, will be applied. Niamh Randall, national spokesperson for the Simon Communities says, “Action is needed now. These issues need to be addressed immediately.” Furthermore, a piece published today in the Irish Times quotes Alan Kelly, who states Ireland’s current housing crisis “cannot wait for a new government to be formed.” Here’s hoping something effective will be done—and fast.
IPAV, the Institute of Professional Auctioneers and Valuers, has also developed a proposal, entitled Tackling the Housing Crisis. The document was recently issued to all Dail electives to “serve as a working paper to our new Government; providing feasible, workable and sustainable solutions to tackle Ireland’s now urgent housing crisis.” The organisation believes the only way to truly solve the dilemma is to “build more houses.”
The measures within the plan are outlined here, which include a call for the government to “incentivise small and large builders by making building finance available at interest rates of between 1pc to 3pc.” The IPAV is also asking for the “Department of Environment, Community & Local Government to be empowered to provide such finance to builders who may wish to participate in an Agreed Price Building Scheme (APBS), which would be in the region of €100 per sq. foot, excluding site costs and works.” The full document can be found here. The IPAV has communicated to its members via email that so far they have received positive feedback and are hopeful for further progress in the coming weeks.
It is clear that something needs to be done about Ireland’s housing crisis, and with so many organisations rallying in support of a solution, we’re hoping tangible, positive results are made quickly. What do you think our government should do?
Featured image via rte.ie
