The current Housing crisis is a result of greed and an ideological belief in capitalism. A house is for some a necessity (a place to live) However for many others a house is an investment opportunity. The landlords would prefer if instead of you buying a house to live in (accumulating wealth and passing it on to your family), that you would rent a house from them, (so that they can accumulate wealth and pass it on to their families).
The Financial institutions would also prefer if you rent a house, after all if they give you a mortgage (a loan) to buy a house, they get a reducing return (interest) for perhaps 30 years, whereas if they use that money to invest in the property rental market and rent the property to you it provides a permanent return on their investment.
In 1973 (when we joined the E.E.C.) A three bedroom house in Dublin cost the equivalent of 3 years average annual salary. Today the same house will cost the equivalent of 10 years average annual salary, and home ownership for many is a fading dream
Could the Government solve the housing crisis;
The Government could solve the housing crisis by declaring a ”Housing Emergency” allowing them to compulsorily purchase apartments and houses which are currently vacant, and renting these at an affordable rent to those homeless and those on the housing waiting list. However this is not going to happen because;
- By relieving the pressure on the housing market the value of all existing properties would be reduced and this could result in a rise in the number of homes in negative equity and the rise in negative equity could impair the balance sheets of the Banks and the taxpayer could be forced into another ”Bank Bailout”
- Increasing the housing stock could result in diminishing rental incomes adversely affecting landlords and property owners, leading to a reduction in property investment and pension funds invested in property would be adversely affected.
According to the Dept of the Environment & Local Govt. The aim of Irish housing policy is “to enable every household to have available an affordable dwelling of good quality, suited to its needs, in a good environment, and, as far as possible, at the tenure of its choice”. Despite these noble aspirations There are still many families homeless, or living in substandard accommodation, Much of this is due to the collapse of the “Celtic Tiger” The collapse of the building sector, the eviction of tenants by unscrupulous landlords and “vulture funds”,
A major rethink on the manner in which the state provides for the housing needs of those who cannot afford to purchase a home, needs to be undertaken. The construction of local authority housing projects, such as happened in the past must cease. These projects only serve to separate and create disadvantage for those who live there.
Ending the Waiting lists;
- First the establishment of a single National Housing Authority, removing from local authorities the role of “landlord”, and ending the interference by local councillors in the allocation of local authority housing units.
- The provision of social accommodation in mixed developments of owner occupied and “for rent” communities to provide for the citizens a place of residence, and to meet the basic human right to a place of shelter befitting a dignified human existence.
- In the meantime those seeking social accommodation should be offered homes where there are homes available. The provision of “ Houses ” is not the responsibility of the state. Persistent refusal of accommodation should result in the applicant being removed from the waiting list. (unless they have a compelling reason)
- A comprehensive program including, relocation, financial support, and community employment (if required). To encourage those on the waiting lists to relocate to areas where the infrastructure of schools, shops, recreation, and public transport already exists, would help to resolve the current housing crisis.
Solving the supply problems;
- To resolve the crisis of affordable housing requires a building program similar to those of the past. The combination of Public and Private partnership, and large tracts of land available within and on the outskirts of the cities, would make the process affordable now. There is no shortage of building land for the building of homes for the people. However land ownership is often fragmented, and available at the whim of the owner. Compulsory purchase of these sites (at current use values), amalgamation of sites,
- Many developers acquire land banks and then wait for a surge in demand before building homes on these sites. This type of land hoarding is detrimental to the good of Irish society. A property tax of 20\% of the lands market value, applied per annum, (after a two year exemption) would ensure there is no delay in converting acquired sites into communities.
- Many existing residential area’s are no better than slums, and are a breeding ground for social problems, including domestic breakdown, crime, and unemployment. Its time to relocate the victims of these estates, and send in the bulldozers. A major regeneration of all slum areas, should begin immediately, those who resist regeneration must be swept aside. Standards must be improved and implemented with vigour and fairness, A small scale example of this type of regeneration occurred in Ballymun, Dublin. Lessons learned in this development could be applied to future projects.
The Economic and Social benefits;
- Improving the attractiveness of Ireland as a location for Foreign Direct Investment (FDI) would be enhanced as staff find accommodation affordable.
- The easing of the upward pressure on wages, as workers constantly try to keep up with rising house prices, and rental costs.
- The burden on the State of domestic rent subsidies and income support for those on low incomes would be reduced.